Net southbound capital sales totaled 66.37 billion HKD this week.
AIA Group receives southbound capital inflows
Net buy for 21 consecutive days
This week (10/12 to 10/16), major Hong Kong stock indices saw modest declines. The Hang Seng Index fell 0.1%, the Hang Seng Tech Index dropped 2.13%, and the HSI China Enterprises Index slipped 0.24%. According to data from Securities Times, southbound funds recorded a net outflow of 66.37 billion HKD this week.
Based on this week's list of most active HK stocks, 20 HK stocks were included. Tencent Holdings had the highest total buy and sell volume via Stock Connect, reaching 155.48 billion HKD; Alibaba-W followed with 143 billion HKD. Xiaomi Group-W, SMIC, and 5 other stocks each recorded a total Stock Connect transaction volume exceeding 100 billion HKD.
Based on net buy-in amounts, AIA received a net southbound inflow of 14.93 billion HKD and has topped the list for two consecutive weeks.
This week, southbound capital was primarily buying internet giants. Tencent Holdings saw net inflows of 14.34 billion HKD, Alibaba Group-W had net inflows of 7.34 billion HKD, and Meituan-W recorded net inflows of 2.78 billion HKD; Xiaomi Corporation-W experienced net outflows of 7.56 billion HKD. Among other Hong Kong stocks, SMIC and Yangtze Optical Fiber & Cable were net sold for 30.24 billion HKD and 24.51 billion HKD, respectively.
Data shows that AIA Group has seen net inflows from the Southbound Connect increase for 21 consecutive trading days. The company's profitability strengthened significantly in the first half of the year; according to the interim report, net profit reached $1 billion, up 69.46% year-over-year, marking a new high for this period since listing. In its announcement, the company stated that strong new business performance and rigorous management of the effective policy portfolio support sustained growth in recurring earnings. After-tax operating profit per share rose 13% in the first half. Consequently, the company expects to exceed the target compound annual growth rate (CAGR) of 9% to 11% for after-tax operating profit per share from 2023 to 2026.
Market activity showed a general decline in trading volume this week. Meituan-W led the gains with a weekly increase of 5.87%, followed by AIA Group, which rose 2.88%, and Xiaomi Corporation-W, up 2.7%. Beiostech Bio-Pharma-B recorded the steepest drop at 28.96%, while Yangtze Optical Fibre & Cable, and Sinogene Biotech fell 26.32% and 21.46%, respectively. In terms of stock performance, several innovative drug stocks declined significantly this week.
On 10 16, the Ministry of Commerce and the Ministry of Science and Technology announced a public consultation on revising the Catalogue of Technologies Prohibited or Restricted from Export by China. The consultation covers 40 key technologies in three proposed sectors: artificial intelligence, biomedicine, and photovoltaics. On the same day, A-share and Hong Kong stock markets saw significant intraday pullbacks in the pharmaceutical and biomedicine sectors, followed by a late-day rebound. A spokesperson for the Ministry of Commerce stated that technology platforms with independent intellectual property rights, including licensing to foreign entities and providing outsourced R&D and production services using such technologies, will not be subject to export controls.
Industrial Securities' research report states that regarding internationalization, which is a key market focus, the overseas expansion of innovative drug BD (business development) currently relies on securing overseas rights for specific assets. This approach serves as an optimal strategy to accelerate global market penetration when companies lack in-house overseas sales capabilities. Notably, Co-Co models (joint development and commercialization) are increasingly prevalent, reflecting the growing competitiveness and influence of Chinese innovative drug enterprises.
10 shares held by Southbound funds
Increased by over 15% compared to last week
Based on shareholding changes, 10 shares of Southbound funds increased by over 15% week-over-week this week (excluding stocks newly added to the Stock Connect since 9). Lead Intelligent ranked first with a 51.87% increase. Figure Eight, Changfeng Pharma, and Chow Tai Fook saw their holdings rank among the top for growth, with week-over-week increases of 31.76%, 24.48%, and 23.53%, respectively.
Lianzhong Intelligent: This week, its HK and A shares fell by 24.53% and 15.49%, respectively, while southbound funds increased their holdings at low levels. The company stated on the investor interaction platform that with the progress of new production lines by leading battery manufacturers both domestically and internationally and the accelerated industrialization of solid-state batteries, demand for battery production line equipment tenders is showing signs of recovery. Lianzhong's participation in bidding and solution alignment for both liquid and solid-state production lines continues to grow, driving an ongoing increase in its market share.
TuDatong released a voluntary announcement today, disclosing that total lidar shipments in Q3 reached approximately 26.89 million units, representing a year-over-year increase of about 217%. The Falcon series accounted for approximately 6.65 million units (up 26% YoY), while the Sparrow series totaled approximately 20.09 million units (up 530% YoY). With quarterly shipments exceeding 200,000 units for the first time, the Sparrow series marks a key milestone in the company's diversified product strategy.
Based on the proportion of HK Stock Connect holdings relative to total HK shares, among stocks with a weekly increase exceeding 15%, Lead Intelligent, Dajin Heavy Industry, and Huaqin Technology hold the top positions, at 19.54%, 11.83%, and 11.09% respectively.
Disclaimer: All information provided by Data Treasure does not constitute investment advice. The stock market involves risks; invest with caution.
Editor: He Yu
