On May 2, against the backdrop of the suspension of A-share funds and Hong Kong Stock Connect, the Hong Kong stock technology index soared by more than 4%.
The activity of Hong Kong stock fund heavy stocks was highly dependent on A-share funds, Shanghai-Hong Kong-Shenzhen funds, and for a long time in the past, if Hong Kong stocks were closed due to holidays, Hong Kong stocks performed embarrassingly, and now in the lack of A-share funds, Shanghai-Hong Kong-Shenzhen funds of the May Day holiday, Hong Kong stocks do not rely on the sharp rise of A-share funds or means that foreign institutions and QDII funds are vigorously covering their positions, and many Hong Kong stock companies have appeared before the May Day holiday, and institutions and overseas sovereign wealth funds have increased their shareholdings. Some fund managers emphasized that the data on the service industry and retail trade during the May Day period may become a perspective for foreign investors to observe China's macro economy.
lagging behind A-shares and U.S. stocks for a year, the AI large model sector of Hong Kong stocks has taken off
Hong Kong's Hang Seng Technology Index soared by more than 4% due to the overseas funds mining the AI large model sector of Hong Kong stocks in the depression, as well as the optimistic judgment of foreign investors observing China's economic recovery during the May Day period, driving the core AI varieties to take off across the board.
Although the speculation of AI large models in A-shares and U.S. stocks has lasted for a year, the AI large model sector of Hong Kong stocks has become the shadow of many public fund managers in the past year However, contrary to the expectations of fund managers, the Hong Kong stock market is not only indifferent to the global popularity of AI large models, but also the rare scene of a deep plunge in the opposite direction, which has led to many public offerings that go south to dig "authentic targets" in 2023 and the first quarter of 2024.
Now, when the AI model speculation in A-shares and U.S. stocks has come to an end, global capital, including A-share funds, QDII funds and overseas sovereign wealth funds, has begun to accelerate its inflow into the Hong Kong market, especially in the technology sector. On May 2, the technology stocks listed on the Hong Kong stock market, which were heavily reduced by public funds and underweighted in the early stage, rose across the board, showing the logic of institutional capital replenishment.
As of the close of trading on May 2, SenseTime, which was reduced by the fund in the fourth quarter of last year, rose by more than 36% on the same day, and the cumulative increase in 8 trading days was as high as 1.7 times. In the previous continuous decline market, Weimob Group, which has been heavily positioned by more than ten public funds to now has only one fund left, also rose 14.39%. According to the fund's first-quarter report, only the Harvest Hong Kong Internet Fund is currently left to hold this stock.
In addition, Kingdee International, an AI concept stock mined by public funds, rose more than 11% on May 2, Fourth Paradigm, which is as famous as SenseTime and UBTECH in the AI field, rose more than 14%, and Yidu Technology, which cooperates with Huawei and Tencent in medical models and artificial intelligence laboratories respectively, rose nearly 5%, and has brought 30% of the income to fund managers in 8 trading days. Stimulated by the three major concepts of industrial robots and AI large models, the innovative Qizhi that released generative AI industrial manufacturing models for the manufacturing track also soared by about 15% with the replenishment of institutional funds, and Yimaitong, which announced in the 2023 annual report that medical AI large models and generative medical AI have been commercialized for the first time, was also sold off by funds, and the stock rose nearly 5% on May 2 According to the latest fund first quarter report, with the support of the AI model, Yimaitong ushered in a heavy position of Guotai Fund's public offering products during the first quarter of this year.
A-share funds are temporarily away from Hong Kong Stock Connect during the holiday, who is covering Hong Kong stocks?
In the past year, each round of holidays due to the suspension of Hong Kong Stock Connect has led to the inability of A-share funds to go south, resulting in Hong Kong stocks in the lack of public Hong Kong Stock Connect funds, often become the target of the fall during the holiday, and now Hong Kong stocks in the suspension of Hong Kong stocks such a ferocious rise of the long force is who?
"We judge that the current Hong Kong stock market at the time of the suspension of Hong Kong Stock Connect is mainly due to the continuous longing of foreign institutions and public QDII funds. A fund manager in Shenzhen who has a heavy position in Hong Kong stocks through the Hong Kong Stock Connect believes that a large number of foreign institutions have begun to buy observation positions in the first quarter of this year, and the Hong Kong stock positions of QDII funds have been steadily increasing in the past three months, but because the Hong Kong stock positions are still low in many public QDII positions, this also means that there is still a lot of room for this increase in positions. Brokerage China reporters also noticed that the AI medical model company Yidu Technology, which has fallen from a market value of HK$60 billion to a market value of HK$5 billion, released a Hong Kong stock equity disclosure information on April 24, showing that the international sovereign wealth fund BIA increased its position in the stock to 53.6 million shares. The sharp rise of Weimob Group on May 2 was also due to the announcement made on the evening of April 30, Tencent increased its holdings in this technology marketing company transforming to the AI track by way of fixed increase, and made Weimob Group replenish about 900 million yuan of funds.
Obviously, in the context of the inability of A-share funds to go south through the Hong Kong Stock Connect during the May Day period, the strong rise in Hong Kong stocks implies that the current Hong Kong stock market is not only optimistic about the trend of mainland public offering institutions, but also the return of overseas funds is also consistent with that of mainland institutions. Feng Chencheng, manager of the Hong Kong Huabao Hong Kong Stock Internet Fund, believes that from the perspective of the pace of China's economic recovery, macro expectations are still the factors that disturb investor sentiment at the molecular end, and the data of the service industry and retail industry during the May Day period may become a perspective for foreign investors to observe China's macroeconomy.
Industry insiders also emphasized that the surge in the technology index during the suspension of Hong Kong Stock Connect on May 2 reflects that the risk appetite of Hong Kong stocks has begun to increase significantly, and it has shifted from unilateral optimism about the mainland public offering market to the consistency of A-share funds, Hong Kong stock funds, QDII funds and foreign institutions.
Regarding the Hong Kong stock market, especially technology stocks that have been falling for one or even three consecutive years, how do public funds view the long-overdue AI market of Hong Kong stocks?
In this regard, Wang Shicong, manager of the Southern Hong Kong Growth Fund, believes that the global AI cycle is still in the early middle stage, and AI will become a key factor in improving social productivity in the next 10 years. In terms of hardware, GPU is still the main line, the demand side, not only GPT, Claude, Sora, Gemini and other large models are still rapidly updated, the inference side also has more applications landed, NVIDIA released a new B series GPU at the GTC conference, performance and architecture have been greatly improved, especially suitable for inference applications, but also to the overall upstream industry chain brings major opportunities, most of Nvidia's upstream industry chain in Chinese mainland and Taiwan, China. In addition to servers, more end-side computing power will gradually follow the rise of AI mobile phones and AIPC, and may further accelerate from the second half of 2024 to 2025, and then drive a new round of replacement cycle in the next 2-3 years, At the same time, this also brings investment opportunities in advanced manufacturing, and it is expected that AI technology will be gradually applied to various vertical applications, and breakthroughs will be ushered in in 2024 in the fields of graphics, video, autonomous driving, recommendation algorithms, education, and databases.
Liu Jie, manager of Ping An Shanghai-Hong Kong-Shenzhen Fund, believes that the main factors for the trend of the equity market in 2024 include the domestic and foreign economic situation, the international monetary environment, and international trade relations. The medium-term trend of the domestic economic trend remains stable and good, and the external demand is currently better than market expectations, providing more opportunities for China's manufacturing industry to "go overseas" to find a new growth direction, and the fund is also trying to explore the subdivisions of China's manufacturing industry with global competitiveness and can go to the global growth and expansion; once the international monetary environment is opened by major countries to open an easing cycle, the global capital market valuation is expected to be marginally repaired, and the fundamentals will also improve marginally; international trade relations in this year's global "election year" It is believed that under the general trend of international division of labor and globalization, the international market will be an important growth and development direction of China's manufacturing industry. In 2024, the equity market is likely to remain somewhat fragmented. On the one hand, the market will continue to look for relatively certain cash return opportunities in low-valuation and high-dividend varieties with defensive attributes, such as utilities, big finance, transportation, and resource stocks, while at the same time, the long-term innovative growth direction represented by the digital economy, intelligent driving, robots, etc., will gradually emerge after the valuation of related varieties is fully adjusted.
Deng Xinyi, general manager of the research department of Sino Fund, also said that on the demand side of AI artificial intelligence, various applications are emerging in an endless stream, especially the recent iteration of domestic large models represented by KIMI, and we have seen the dawn of progress in the development of domestic artificial intelligence. AI PC / Mobile Phone / Hardware innovations such as MR are expected to further promote the positive feedback of AI into capability iteration. In addition, at the policy level, the government work report proposes the "artificial intelligence +" action, and the relevant policies and strategic layout also clearly put forward the requirements for accelerating the development of artificial intelligence. Therefore, with the continuous improvement of large model capabilities, it is expected to usher in explosive growth in computing power and application demand.
Editor-in-charge: Wang Yunpeng
Editor-in-charge: Tao Jiyan | Review: Li Zhen | Supervisor: Wan Junwei
(Source: Brokerage China)