Duan Yongping steps in to bottom fish Tencent's undervalued Hong Kong stocks, attracting institutions to flood in and buy up

According to Zhitong Finance APP, today, well-known investor Duan Yongping suddenly announced that he would no longer be active on Xueqiu for a considerable period. Previously, he had expressed optimism about the market multiple times, revealing that he had bottomed out on Tencent (00700) and other companies. Moreover, a large amount of capital has recently flowed into the Hong Kong stock market through ETFs and other means, with several ETFs reaching historical highs in share volume. Multiple institutions have stated that after recent adjustments, the valuation level of Hong Kong stocks is at a historical low, revealing long-term allocation value.

Just before Duan Yongping announced his "departure," he had shared his views and operations regarding the market. In the Hong Kong stock market, he was optimistic about Tencent. On April 8, he expressed support for Tencent by selling put options. Since the beginning of this year, Duan Yongping has frequently made moves in Hong Kong stocks, either by directly buying stocks or by selling put options to take a bullish stance.

In addition to Duan Yongping, southbound funds have also been continuously flowing into Hong Kong stocks. Since the beginning of this year, southbound funds have accelerated their inflow into the Hong Kong stock market, maintaining net purchases for 13 consecutive trading days. On April 9, southbound funds net purchased over HKD 35.5 billion in Hong Kong stocks, continuing a strong inflow trend.

As an important tool for capital allocation in Hong Kong stocks, related ETFs are favored by funds.

Taking the Hong Kong Stock Technology ETF (513020) as an example, this ETF mainly tracks the CSI Hong Kong Stock Connect Technology Index, with constituent stocks covering leading technology companies in internet, biomedicine, and new energy vehicles, including Alibaba, Xiaomi Group, and Tencent Holdings. On April 10, funds also flowed into Hong Kong stocks through this ETF, with the Hong Kong Stock Technology ETF surging over 6.5%, and trading volume continuing to expand.

Additionally, the Hang Seng Index ETF (513600) rose by 3.95%, with net inflow amounts ranking first among similar products. Against the backdrop of continuous capital inflow, several Hong Kong stock-related ETFs have reached historical highs in share volume.

Among them, multiple Hong Kong stock-related ETFs have seen significant volume increases, with clear signs of large funds sweeping in. Specifically, the trading volume of the Huaxia Hang Seng Technology Index ETF in the morning was CNY 8.844 billion, while the Huatai-PineBridge Hang Seng Technology ETF also exceeded CNY 8.7 billion in trading volume.

Guojin Securities stated that Hong Kong stocks are leading the global equity market, driven fundamentally by two points: first, Hong Kong stocks have a high "AI content," and AI-related technology assets are more "recognizable" than those in the A-share market; second, the liquidity and risk premium on the denominator side of Hong Kong stocks have shown "real improvements." The significant rebound of domestic M1 has led to a "spillover" of funds, driving substantial inflows of southbound funds into the Hong Kong market, combined with the stronger "momentum effect" of Hong Kong stocks, creating a positive feedback loop for incremental funds. From the structure of capital flow, technology assets have received consistent favor from both domestic and foreign capital, especially with the former showing more significant inflow.

CICC stated that the continuous inflow of southbound funds may come from the activity of individuals and private equity, as well as the ongoing allocation by public funds and insurance capital. CICC believes that the recent rapid increase in net inflow of investable Hong Kong stock ETFs from the mainland may primarily come from individual investors; the recent abnormal fluctuations in some small and medium-sized stocks in the Hong Kong Stock Connect are similar to the performance characteristics of some small and mid-cap stocks in the A-share market, indicating that speculative and private equity funds may be involved, including funds that previously invested in U.S. stocks quickly switching to Hong Kong stocks; some insurance funds are still continuously allocating high-dividend Hong Kong stocks and slightly increasing their allocation to the technology sector Mainland public funds have also significantly increased their allocation to Hong Kong technology stocks.

Specifically, among the top 20 stocks with the largest increase in public fund positions, 6 are Hong Kong Stock Connect targets, with a total increase of 52.211 billion yuan. Among them, Tencent Holdings is a long-term heavy position for public funds, highlighting the attractiveness of internet leaders in the valuation recovery.

The latest research report from Shenwan Hongyuan's strategy team indicates that amid significant market adjustments, Chinese assets have once again returned to a relatively good valuation position globally. The market may be approaching an important medium to long-term cycle low point, and they remain optimistic about mid-term investment opportunities after the subsequent pullback in Hong Kong stocks