Shares of Alibaba-W surged over 10% in afternoon trading, following a positive outlook from its fiscal 2027 first-quarter earnings preview. The report indicated robust profitability and a return to growth for its overall e-commerce business, encompassing China e-commerce and AIDC. Notably, the loss reduction for its flash sales platform, Taobao Deals, is progressing faster than market expectations, with the unit economics gap narrowing against competitors. Market share has remained stable throughout the subsidy reduction process.
The focus for Taobao Deals has shifted towards higher average order value categories like food delivery and non-food orders, suggesting further potential for unit economics improvement in the period ahead.
Additionally, Kuaishou-W and Xiaomi Group-W saw gains exceeding 7%, while Tencent Holdings rose over 3%. Bilibili-W and Meituan-W also followed the upward trend.
The Hong Kong Internet ETF Huabao (513770), which holds significant positions in leading internet companies, experienced a sharp, high-volume spike in its on-exchange price during the afternoon, climbing over 5%. This move was accompanied by a substantial premium, with the real-time premium rate reaching 0.72%, potentially indicating capital inflows positioning for a potential market shift.
Recent market activity in Hong Kong stocks has displayed a clear "rotation from high to low" characteristic. Capital appears to be shifting from the previously high-flying AI hardware sector towards lower-valued technology and internet stocks. Analysis suggests this trend reflects that AI-related trading has become crowded, raising sensitivity to negative news and prompting funds to flow into traditional internet leaders currently in valuation troughs.
The convergence of three factors—valuation bottom, improving liquidity, and a narrative shift away from AI—may create a window for a phased valuation recovery in Hong Kong's tech and internet sector.
Attention is turning to the potential value re-rating of Hong Kong's leading internet companies amidst the AI transformation. The Hong Kong Internet ETF Huabao (513770) and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings aggregate tech giants like Alibaba-W and Tencent Holdings, along with AI application firms across various sectors, highlighting significant leading advantages. The ETF offers intraday T+0 trading with good liquidity.
Investors are reminded that recent market volatility may be significant, and short-term price movements are not indicative of future performance. It is crucial to invest rationally based on individual financial circumstances and risk tolerance, with high attention paid to position sizing and risk management.
Data is sourced from exchanges including the Shanghai and Shenzhen Stock Exchanges.