DeepSeek leads the revaluation of Hong Kong stocks, rising over 15% in a single quarter. The IPO market is warming up, and brokerages are taking advantage by promoting "AI assistants."

DeepSeek Leads Hong Kong Stock Value Reassessment, Surging Over 15% in a Single Quarter as IPO Market Warms Up, Brokers Push for "AI Assistants" Hong Kong stocks have fallen for four consecutive years since 2020, but rebounded in the second half of last year due to a series of policies launched in mainland China, ending the decline with an annual increase of over 17%. Entering the first quarter of 2025, the momentum continues to be strong, with the Hang Seng Index rising over 15% for the quarter and the Tech Index even increasing by 20%. This reflects that after the emergence of DeepSeek, several chip stocks and AI application stocks have surged, leading a new wave of AI enthusiasm and a reassessment of Hong Kong stock values. The new stock market has also warmed up, surpassing India in the first quarter to become the world's second-largest IPO market, marking the first time since the second quarter of 2021 that it has regained this position. Futu Securities Chief Strategist Lu Bingjun pointed out in a recent interview with Sing Tao Daily that AI has performed well in the past few years, and "with the concept of DeepSeek emerging, Hong Kong stocks have benefited." According to Bloomberg data, the funds raised from IPOs, block trades, and stock placements in Hong Kong in the first quarter surged 11 times compared to the same period last year, reaching $16.3 billion (approximately HKD 127.1 billion). Among them are star new stocks such as Bruker (325) and Mixue Ice Cream City (2097), with Mixue's IPO subscription exceeding 5,258 times, amounting to over 18 billion yuan. The Key of DeepSeek Lies in Efficiency Lu Bingjun stated that U.S. AI stocks have risen due to technological innovation in recent years, but the key to DeepSeek is not innovation but the improvement of efficiency, which can reduce costs and computing power requirements and can be used for commercial revenue, allowing Hong Kong stocks to benefit in this round. Specifically, due to the impact of Sino-U.S. relations, some chips cannot be imported, and the emergence of DeepSeek has precisely reduced the demand for powerful computing power and advanced chips. He believes that the U.S. will further tighten chip exports, thus benefiting many Chinese technology companies. In addition, China's chip manufacturing technology lags behind international standards, and related companies also benefit from DeepSeek, such as upstream chip stocks SMIC (981) and Hua Hong Semiconductor (1347); downstream application stocks, including large tech companies like Alibaba (9988) and Xiaomi (1810), also see benefits However, he believes that investors are more optimistic about stocks in the U.S. stock market, such as chip stocks NVIDIA (NVDA), AMD (AMD), and Intel (INTC). From an investment value perspective, he leans towards NVIDIA, as it still holds core technology that other chip stocks find hard to catch up with. Downstream application stocks include project management, data analysis, online education, cloud services, advertising, and marketing, among which Duolingo (DUOL) is considered a potential stock. The second half of the year depends on corporate earnings Looking ahead, Lu Bingjun expects that the Hong Kong stock market will perform relatively well in the first half of this year, with a high point potentially reaching 24,000 points, and optimistically up to 27,500 points. However, he is not very optimistic about the second half of the year and believes that "I think there is little possibility of replicating the U.S. trend in Hong Kong this year." He explains that AI stocks in China and the U.S. are different; the U.S. drives overall revenue growth more through innovative products, while China relies more on chip technology to drive business, such as WeChat mini-programs that can directly connect to DeepSeek. Users tend to use WeChat or other software rather than DeepSeek itself. "By the second half of the year, everyone may focus on whether there is a significant improvement in earnings and whether the degree of improvement can maintain such a high valuation level." Therefore, he states that in the short term, the market atmosphere may influence upward movement, but the second half will be more volatile. He also emphasizes that the Hong Kong stock market largely speculates on sentiment rather than fundamentals. If mainland companies continue to use DeepSeek and the results show they are not as impressive as expected, there is a high possibility of a decline. As for U.S. President Trump threatening to "declare war" on global trade partners by imposing "reciprocal tariffs" on April 2, Lu Bingjun believes that in the short term, tariff issues will definitely impact the sentiment of the Hong Kong stock market. However, at the same time, everyone may rely more on internal production and operations, forcing chip companies to better meet the domestic chip production needs, which could actually be beneficial for companies by reducing dependence on foreign sources. Two points to watch out for when using AI tools for stock selection Additionally, Futu announced this month that it has officially integrated DeepSeek-R1 and launched the "NiuNiu AI" assistant. In the future, it will also introduce AI stock selection features that can quickly filter suitable investment targets from millions of securities based on user-specified conditions for reference. Lu Bingjun points out that AI tools for stock selection analyze a lot of data and are more applicable for information gathering, making them a great tool for investors. They can provide analytical reasoning and offer analytical ideas for users learning to invest. However, investors still need to be wary of "black swan events," which are things that are not in the database and are difficult to predict. Furthermore, AI tools have not considered two points: one is the lack of the latest news, and the other is that AI tools do not account for market sentiment reversals. Li Hua, founder and chairman of Futu Securities, also reminds that the information provided by AI tools should only be used as a reference and to be cautious of "AI hallucinations." However, he describes that the emergence of AI can be likened to a knowledgeable and comprehensive private financial assistant that can provide many good suggestions, and this vision can be realized in a short time. Nevertheless, he believes that AI will not completely replace investment advisors, and people can inject their accumulated knowledge into AI, making its responses more akin to human performance