Wall Street's famous short-seller rarely turns bullish, institutions: Hong Kong stock tech opportunities may outweigh risks! Hong Kong Stock Connect Tech ETF (159125) rises over 1% against the trend during intraday trading

On the morning of March 16, the Hong Kong stock market showed a significant divergence pattern. The Hang Seng Index opened slightly lower today but then strengthened. Amid a generally weak market, the technology sector took the lead and became one of the few bright spots with gains. Coupled with positive news, the steady performance of the tech sector has injected strong confidence into investors.

Notably, Michael Burry, the “big short” on Wall Street, recently publicly expressed bullish views on the Hang Seng Tech Index. This legendary investor, known for accurately predicting the 2008 subprime mortgage crisis and famous for contrarian investing, clearly stated that the sharp decline of the Hang Seng Tech Index was driven solely by valuation and sentiment compression. The revenue and profits of its constituent companies are still steadily growing. This extreme divergence between valuation and fundamentals presents a historic investment opportunity. His statement further boosted market confidence in Hong Kong tech stocks.

As a representative focusing on Hong Kong Stock Connect technology leaders, the Hong Kong Stock Connect Technology ETF (159125) closely tracks the CSI Hong Kong Stock Connect Technology Index, covering core sectors such as internet, hard technology, and innovative medicine. It opened slightly higher following the sector trend and rose over 1% with stable trading. In terms of components, KE Holdings (BEKE-W) surged over 4%, JD Health, Kangfang Biotech, and BYD Electronics rose over 3%, while heavyweight stocks like Meituan-W and Xiaomi Group led the gains.

In comparison, the Hong Kong Tech 50 ETF (159750) demonstrated greater resilience. This fund tracks the CSI Hong Kong Technology Index, which includes 50 large-cap, R&D-intensive, and revenue-strong tech giants in the Hong Kong market. It opened up 0.87% in line with the index, outperforming the Hang Seng Tech Index. Among its components, CATL and Yingneng Bio-B surged over 6%, while Tencent, Xiaomi, NetEase, and Meituan also generally rose. The diversified layout highlights its potential as a preferred choice for investors seeking high elasticity returns.

Continued capital inflows further confirm the investment value of the Hong Kong tech sector. Recently, southbound funds have maintained net inflows, with domestic capital continuously increasing holdings in leading Hong Kong tech stocks, injecting ongoing liquidity into the sector. Looking at the two ETFs, the Hong Kong Tech 50 ETF (159750) saw a net subscription of over 30 million yuan in the past 10 days, indicating a clear willingness to buy on dips. The Hong Kong Stock Connect Tech ETF (159125) mainly attracted funds through oscillating accumulation, with institutional allocation steadily rising, and nearly 20 million yuan in net subscriptions over the past 10 days.

Industrial Securities stated that the medium-term opportunity in the Hong Kong tech sector may outweigh the risks, currently representing a value gap. On one hand, the rising expectation of Fed rate cuts will promote foreign capital inflows, and a stable RMB exchange rate will enhance the attractiveness of RMB assets, bringing liquidity improvement and valuation recovery for Hong Kong stocks. On the other hand, policies promoting new productive forces continue to deepen, the AI industry cycle is upward, and the “AI+” initiatives are being implemented, allowing the tech sector as a core carrier to continue benefiting from industry dividends.

Fundamentally, earnings expectations for segments like automotive technology and innovative medicine have been revised upward. Leading internet companies’ performance is gradually stabilizing, and subsequent earnings verification through financial reports is expected to release further profit elasticity.

In terms of valuation, the current Hang Seng Tech Index PE-TTM is about 21x, placing it in the 20th percentile over the past five years. The Hong Kong Stock Connect Tech Index PE-TTM is approximately 23x, compared to the Nasdaq 100 (33x) and ChiNext Index (41x), highlighting its cost-effectiveness advantage.

Risk warning: Funds are subject to risks; investment should be cautious.