On the morning of November 3rd, the three major Hong Kong stock indices opened higher collectively. The Hang Seng Index rose 0.36% to 25,999.17 points, the Hang Seng Tech Index gained 0.48%, and the Hang Seng China Enterprises Index increased by 0.33%. Across the market, most technology and internet stocks advanced, biotechnology stocks mostly rose, automotive stocks were active, Chinese brokerage stocks generally gained, while gold stocks broadly declined. After opening, the Hang Seng Tech Index turned lower. The largest A-share same-track ETF, the Hang Seng Tech Index ETF (513180), followed the index and fluctuated downward. Among its holdings, XPeng, NIO, Kingdee International, Bilibili, and Xiaomi Group led the gains, while Hua Hong Semiconductor and SMIC were among the leading decliners.

In its annual strategy, Guotai Haitong suggested focusing on Hong Kong technology stocks as the main investment theme in 2026. Looking ahead to 2026, against the backdrop of potential further valuation upside for Hong Kong stocks, high certainty of incremental capital inflows, and the expected continuous accumulation of high-quality, scarce assets, the Hong Kong stock market is poised to ride the momentum upward, with the bull market pattern remaining intact. Structurally, the institution believes that under the wave of AI, Hong Kong tech stocks will be the main market trend in 2026. Supported by industry progress and favorable policies, the fundamental performance of the Hong Kong tech sector may be stronger. Hong Kong tech stocks, characterized by reasonable valuations and superior fundamentals, are expected to see increased allocation from both domestic and foreign capital.

Public information shows that as of October 31st, the benchmark index for the Hang Seng Tech Index ETF (513180) had a latest valuation (PE TTM) of 22.85 times. This places it at approximately the 28.65% percentile of the index's historical valuations since its launch, meaning the current valuation is lower than over 71% of the periods in the index's history, indicating it is in a historically undervalued range. Looking forward, Hong Kong tech stocks stand to benefit more from the current industry trends represented by AI. Against the backdrop of potential Federal Reserve interest rate cuts, foreign capital returning might exceed expectations, coupled with sustained inflows from southbound capital, making the Hang Seng Tech Index promising in the fourth quarter. Investors without a Hong Kong Stock Connect account can consider using the Hang Seng Tech Index ETF (513180) for a one-click allocation to China's core AI assets. (Off-platform Link A/C: 013402/013403)