Recently, Hang Seng Indexes Company announced the quarterly index review results as of September 30, 2025. This adjustment covered major flagship Hong Kong stock indices such as the Hang Seng Index, the Hang Seng China Enterprises Index, and the Hang Seng Tech Index. Simultaneously, the Hang Seng Composite Index, which directly determines the investable scope of Stock Connect, was also adjusted. All changes will be implemented after the market close on December 5, 2025, and take effect from December 8, 2025.

Regarding the Hang Seng Index, Innovent Biologics will be included as a constituent with a weight of 0.91%. No constituents were removed. The number of constituents after the adjustment increased from 88 to 89.

For the Hang Seng China Enterprises Index, China Hongqiao, Innovent Biologics, and Yum China will be included with weights of 1.30%, 1.21%, and 0.91% respectively; ENN Energy and New Oriental-S, among others, will be removed. The number of constituents remains unchanged at 50.

For the Hang Seng Tech Index, Leapmotor will be included with a weight of 0.98%; ASMPT will be removed, with a pre-removal weight of 0.66%. The number of constituents remains unchanged at 30.

For the Hang Seng Composite Index, FWD Group, Hesai Group, Aux Electric, Geek+, Kono Biotech, and Chery Automobile will be included as constituents. The number of constituents increased from 503 to 509.

On the same day, Hang Seng Indexes Company and Hong Kong Exchanges and Clearing announced the quarterly review results for the Hang Seng Stock Connect Hong Kong-listed China Enterprises Index as of September 30, 2025. The number of constituents for this index remains unchanged at 80. Among them, four stocks - China Hongqiao, Innovent Biologics, Yum China, and Naura Technology Group (002371) - were included, while four stocks - ENN Energy, Huaneng Lancang River Hydropower (600025), Inner Mongolia Yili Industrial Group (600887), and Haidilao - were removed.

Furthermore, Hang Seng Indexes Company also released the quarterly review results for the Hang Seng ESG Enhanced Index, Hang Seng ESG Enhanced Select Index, and Hang Seng HSCEI ESG Enhanced Index. Among these, Innovent Biologics and Zijin Mining Group (601899) were added to the Hang Seng ESG Enhanced Index, while CK Hutchison Holdings was removed. The Hang Seng HSCEI ESG Enhanced Index included CNOOC, Innovent Biologics, and Yum China, while removing ENN Energy, Haidilao, and New Oriental-S.

China International Capital Corporation (CICC) (601995) stated that according to the consultation results released by Hang Seng Indexes Company in March 2021, the number of Hang Seng Index constituents was planned to increase to 80 by mid-2022, ultimately fixed at 100. This increase to 89 constituents continues progress towards that goal, but the overall pace is slower than expected.

From a sector coverage perspective, CICC mentioned that after this adjustment, the weight of Healthcare and Industrials in the Hang Seng Index increased, while the weight of Financials and Consumer sectors declined. Specifically, referring to Hang Seng Indexes Company's industry classification, after this adjustment, the weight of Healthcare and Industrials rose from the current 2.9% and 8.8% to 4.0% and 9.1% respectively. Among these, the coverage of the Healthcare industry increased from 34.5% to 40.0%; Financials and Consumer sectors declined, falling from the current 33.6% and 27.4% to 32.9% and 26.4% respectively.

Meanwhile, as the aforementioned index adjustment results will officially take effect on December 8 (Monday), passive funds may choose to adjust their positions on the last trading day before the effective date (i.e., December 5) to minimize tracking error. CICC anticipates that the trading volume of related stocks might be significantly higher than usual at that time.

It is worth mentioning that this year, the Hang Seng Index has been rising driven by sectors like technology and pharmaceuticals. Recently, the Hong Kong stock market has experienced fluctuations, and its subsequent trend has attracted widespread market attention. Overall, several institutions hold an optimistic view on the later trend of Hong Kong stocks.

Huatai Securities stated that Hong Kong stocks are entering a strategic allocation zone, and the recent increase in market volatility is mainly due to liquidity, sentiment, and risk appetite. "We are not pessimistic about this." Huatai Securities said that regarding AI, relevant Hong Kong-listed companies are mainly focused on domestic computing power, models, and applications, with prospects closely tied to China's own technological development. Looking ahead, technological self-sufficiency and controllability is a medium to long-term theme.

"We are not pessimistic about the fundamental prospects of Hong Kong-listed companies. In our annual outlook, we forecast that the non-financial earnings growth rate of overseas Chinese stocks will further increase from 10% this year to around 15% in 2026, with continued improvement in corporate profitability being the main driver." Huatai Securities stated that this round of adjustment in Hong Kong stocks started earlier than A-shares, and the current position already offers good value.

Overall, Huatai Securities believes Hong Kong stocks are entering a strategic allocation zone and recommends focusing on sectors that have performed relatively poorly year-to-date, such as Consumer Services, Construction, Textiles & Apparel, and Home Appliances. Simultaneously, during the third round of revaluation since August, some sectors saw limited gains but recent declines have been relatively large, potentially indicating "undeserved selling," including Electronics, Pharmaceuticals, Automobiles, and Light Industrial Manufacturing. Additionally, the Hong Kong tech sector has experienced significant recent pullbacks and is expected to have revaluation opportunities after the liquidity environment improves.

Wang Zonghao, Head of China Equity Strategy Research at UBS Investment Bank, stated that factors such as development in innovative fields, supportive policies for private enterprises and capital markets, ample capital market liquidity, and potential fund inflows from domestic and foreign institutional investors will continue to support the market.

Looking ahead, Wang Zonghao said that with global economic growth improving next year, it is advisable to include some "overseas expansion" stocks. "We remain optimistic about technology and internet sector stocks. Currently, we have no preference between onshore (A-shares) and offshore (H-shares) markets, as both markets enjoy positive supporting factors: A-shares benefit from retail and institutional fund inflows and 'anti-involution' tailwinds, while H-shares benefit from AI exposure and sustained foreign capital and southbound fund inflows."