--- title: "Goodbye to Wall Street Bias: Why Returning to Hong Kong is the Starting Point for the Market Value Reassessment of Chinese Concept Stocks Vertical Champions?" type: "News" locale: "en" url: "https://longbridge.com/en/news/281992011.md" description: "Chinese concept stocks face dual pressures of liquidity and perception in the U.S. The liquidity of the Hong Kong stock market is expected to recover in 2025, with the Hang Seng Index rising by more than 28%. Chinese concept stocks are accelerating their return, with fundraising scale returning to the top globally, completing a transition from defensive discounts to reasonable valuations. The return of Chinese concept stocks to Hong Kong is no longer a choice for a safe haven, but a systematic project of the return of pricing power, reflecting the survival anxiety brought about by Sino-U.S. trade frictions and considerations of value home ground" datetime: "2026-04-08T07:06:10.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281992011.md) - [en](https://longbridge.com/en/news/281992011.md) - [zh-HK](https://longbridge.com/zh-HK/news/281992011.md) --- # Goodbye to Wall Street Bias: Why Returning to Hong Kong is the Starting Point for the Market Value Reassessment of Chinese Concept Stocks Vertical Champions? In 2025, the Hong Kong stock market welcomed a comprehensive recovery in liquidity, with the Hang Seng Index rising over 28% for the year. Driven by large IPOs and the accelerated return of Chinese concept stocks, the fundraising scale returned to the top of global exchanges. At the same time, benefiting from a significant rebound in market liquidity, returning Chinese concept stocks generally emerged from the lows of previous years, completing a transition from defensive discounts to reasonable valuations. **Looking back from 2020 to 2025, Chinese concept stocks have completed a "geographical migration" from the United States to Hong Kong. The outcome shows that there has been a "two-way rush" between Chinese concept stocks and the Hong Kong Stock Exchange.** Now, standing at the capital window period of 2026, one conclusion that can be drawn is that the return of Chinese concept stocks to Hong Kong is no longer a simple "safe haven" choice, but a systematic project about the return of pricing power. This migration stems from the survival anxiety triggered by Sino-U.S. trade frictions, with the endpoint being a deep reflection on the "value home ground." ## **The "Liquidity Trap" of Vertical Track Champions in Chinese Concept Stocks** Between 2010 and 2015, the core narrative of Chinese concept stocks listing in the U.S. was "Copy to China." The logic at that time was extremely simple and crude: whatever exists in the U.S., China must have a corresponding version. For example, when JD.com went public, investment banks labeled it as "the Amazon with its own logistics" to make it understandable to American investors, while Alibaba was packaged as a super combination of "Amazon + eBay + PayPal." This comparison was indeed effective during the "first half of the internet," as Chinese internet was in a stage of imitation. However, over time, this led Wall Street to develop a "benchmark dependency syndrome": **if a Chinese company cannot find a corresponding American benchmark in the U.S. stock market, analysts often do not know how to build a financial model.** As China's mobile internet entered deeper waters, unique local business infrastructures—such as a logistics system akin to capillary levels and nationwide mobile payment coverage—gave rise to a batch of local new species that broke away from the "American mother body." This left Wall Street, which was accustomed to "labeling," in a blind spot, often overlooking the endogenous logic of vertical tracks, leading to valuation misalignments. A greater upheaval occurred in mid-2021, with a series of factors including Sino-U.S. trade frictions, the introduction of the Holding Foreign Companies Accountable Act (HFCAA), the aftermath of Luckin Coffee's financial fraud, the heavy blow of the double reduction policy on education-related Chinese concept stocks, and stricter domestic regulations on antitrust and data security. These factors led American capital to indiscriminately sell off or even maliciously suppress Chinese concept stocks, especially non-core ones. Today, the U.S. stock market has become a typical "Matthew Effect" market for Chinese concept stocks. Apart from giants like Alibaba, JD.com, and NetEase that can obtain sufficient coverage, a large number of "vertical champions" with market values between $1 billion and $10 billion have long been trapped in liquidity traps. Bloomberg and Nasdaq trading data show that the average daily turnover rate of non-core Chinese concept stocks is far below the average level of Nasdaq 100 constituents. This lack of liquidity results in these companies lacking sufficient support when facing short attacks or macro fluctuations, leading to irrational valuation discounts of 15%-50% Taking Manbang Group as an example, it went public in June 2021, and it can be said that it "hit a cold winter right from the start." As the absolute champion in the domestic digital freight sector, Manbang has demonstrated extremely strong anti-cyclical capabilities over the past five years. By 2025, Manbang Group's total revenue reached 12.49 billion yuan, a year-on-year increase of 11.1%, with a net profit of 4.46 billion yuan, a year-on-year increase of 42.8%, and gross and net profit margins reaching 63.0% and 35.7%, respectively. Currently, Manbang's market capitalization is approximately 8.5 billion USD, with a price-to-earnings (P/E) ratio of 13.4 times. However, companies with similar gross margins (around 60%) and industry monopoly positions typically have P/E ratios of 20-25 times in the Hong Kong or A-share markets. Another example is AiHuiShou (WanWu XinSheng Group), which also went public in June 2021. As the champion in the domestic second-hand recycling and trading vertical, AiHuiShou has seen its performance and fundamentals rise over the past five years, but its stock price has remained low. By 2025, AiHuiShou's total revenue reached 21.05 billion yuan (approximately 3 billion USD), a year-on-year increase of 28.9%. In the current macro environment, a nearly 30% growth rate is quite rare for a company of this scale, and its net profit for 2025 is expected to be 340 million yuan, achieving a turnaround and entering a positive cycle of self-sustaining growth. However, AiHuiShou's current market capitalization is about 1 billion USD, with a price-to-sales (P/S) ratio of only around 0.34 times. In comparison to global circular economy targets or domestic retail giants, an industry leader with nearly 30% annual growth and already profitable should typically have a P/S ratio of 1-2 times. Similar "vertical champions" have a high market share in their respective fields, and their fundamentals have completed a qualitative transformation from "traffic-driven" to "profit release." However, in the U.S. stock market, they still face dual pressures from the capital market: **First, the lack of support from buyers.** Due to their smaller market capitalization, long-only funds find it difficult to take large positions, resulting in limited average daily trading volume. This lack of liquidity makes them susceptible to emotional sell-offs of 15%-25% or even higher in the face of macro fluctuations in Chinese concept stocks. Even with stable performance, stock prices often become "amplifiers" of macro indices rather than "mirrors" of their intrinsic value. **Second, the lag in understanding.** U.S. stock investors often tend to apply the "light asset, high growth" Silicon Valley model to Chinese internet companies. Manbang is deeply engaged in the digital transformation of millions of truck drivers, cargo owners, and the intricacies of road logistics in China; AiHuiShou has established a supply chain closed loop with offline store systems, automated testing centers, and refurbishment factories. This understanding completely overlooks the physical moats they have built in their respective sectors. Under this simplified thinking, the core values of Manbang and AiHuiShou are severely misaligned, ignoring the physical moats they have established in their respective fields. This irrational discount caused by liquidity and cognitive gaps has become a driving force for the large-scale "reflow" of Chinese concept stocks. Against this backdrop, the institutional dividends and changes in the funding structure of the Hong Kong stock market provide a re-pricing anchor for these undervalued "vertical champions." ## **The Hong Kong Stock Exchange is Completing the Paradigm Shift from "Safe Haven" to "Main Battlefield"** The core advantage of Hong Kong stocks lies in their unique position connecting domestic and foreign capital. With the further upgrade of the "Connect" mechanism in 2025, southbound funds have become the most solid foundation for Hong Kong stocks. According to a report released by the Bank of China Research Institute in January 2026, by the end of 2025, the trading volume of the Hong Kong Stock Connect accounted for 46.17% of the total trading volume of the Hong Kong main board, up from 22.6% in 2021. Additionally, according to Wind data, the net inflow of southbound funds in 2025 reached a record high of HKD 1.4 trillion. Southbound funds have a deeper understanding of domestic policy directions and consumption trends, and their risk preferences are completely different from those of U.S. capital, providing a stable valuation center for Chinese concept stocks. In addition to privatization and delisting from U.S. stocks to return to Hong Kong, Chinese concept stocks generally have two options for returning to Hong Kong: Secondary Listing or Dual Primary Listing. "Secondary Listing" is based on a subordinate structure with regulatory exemptions from the main listing location. Although compliance costs are low, it faces a liquidity flaw of not being able to be included in the "Hong Kong Stock Connect," and is easily affected by delisting from the main listing location, leading to a "chain collapse"; while "Dual Primary Listing" involves parallel regulatory sovereignty in both locations, requiring listed companies to fully comply with obligations in both places. Although this increases audit costs, it provides a completely independent legal status, a high degree of delisting risk isolation, and a certain path for directly attracting southbound funds. In 2020, Chinese concept stocks returned to Hong Kong mainly through Secondary Listings, such as NetEase and JD.com. However, starting from 2021, especially in 2022, Dual Primary Listing has become the mainstream model for returning to Hong Kong. An "unexpected" event that occurred last month illustrates the current status switch between Secondary Listing and Dual Primary Listing: On March 2, NetEase-S announced that due to the proportion of its trading volume on the Hong Kong Stock Exchange exceeding 55% of its global total for the fiscal year 2025, it triggered the Hong Kong Stock Exchange's "shift in trading focus" clause, and the company must fully comply with the relevant Hong Kong listing rules applicable to dual primary listing issuers, with exemptions related to secondary listings no longer applicable. This means that NetEase had to switch its method. Of course, more Chinese concept stocks choose to switch proactively, such as ZTO Express. From a business volume perspective, ZTO is the industry "leader." In September 2020, ZTO returned to Hong Kong stocks as the "first express delivery company to return to Hong Kong" through a Secondary Listing, with an issue price of HKD 218, and within six months, it rose to around HKD 300, an increase of nearly 40%. At the end of 2022, ZTO applied to change its secondary listing status on the Hong Kong Stock Exchange to a primary listing status, which took effect on May 1, 2023. Although its market value has adjusted from its peak, its overall performance remains stable. What this reflects is actually a milestone in the large-scale migration of the trading focus of Chinese concept stocks from west to east. It clearly indicates that **under the continuous resonance of policy dividends and the domestic capital ecosystem, Hong Kong stocks have completed the transition from "safe haven" to "strategic main battlefield," becoming the core battlefield for accommodating the return of Chinese concept stocks and reclaiming global capital pricing power.** \*\* As of now, there is still a group of Chinese concept stocks in the Hong Kong stock market that are in a secondary listing status, including Baidu, JD.com, Trip.com, Weibo, Nio, etc. They may actively or passively switch like NetEase or ZTO Express. For those Chinese concept stocks that have not yet returned to Hong Kong, especially those "vertical champions" trapped in the liquidity trap of the U.S. stock market, dual primary listing can be said to be a must. There is a simple truth in the capital market: you cannot give a high price for something you do not understand. Taking O2O, circular economy, and fintech as examples, Chinese companies in these fields often combine extremely high offline fulfillment complexity with online algorithm efficiency. U.S. stock investors tend to break them down into pure "internet platforms," while Hong Kong stock investors, especially domestic capital entering through southbound funds, pay more attention to their bargaining power within the local industrial chain. Among the Chinese concept stocks that have not yet returned to Hong Kong, for example, Pinduoduo, its valuation in the U.S. stock market has long been affected by the overseas regulatory noise of Temu. Returning to Hong Kong for listing can provide a more pure "Chinese supply chain competitiveness" pricing venue. Once Pinduoduo is primarily listed in Hong Kong, it is highly likely to be included in the Hang Seng Index constituents. According to estimates, this could attract over $5 billion in passive fund inflows. Another example is Manbang and Aihuishou mentioned above. U.S. stock investors often simply compare Manbang to pure online matching platforms like Uber Freight, ignoring its deeply embedded full-chain digital system in China's road logistics capillaries. Manbang has built a "heavy ecology" that includes precise matching algorithms and energy and insurance value-added service points by covering millions of drivers and cargo owners nationwide, which is essentially the "taxation" logic of industrial internet. This control over the intricate details of China's road logistics is precisely what southbound funds in the Hong Kong stock market are best at pricing as "certainty assets." If it can return to Hong Kong, relying on its extremely high profit margins and stable dividend potential, Manbang is expected to achieve a dual alignment of market value and fundamentals. Aihuishou, on the other hand, is simply compared to pure online trading platforms like Back Market or Gazelle in the U.S. However, Aihuishou's core competitiveness lies in its more than 2,000 offline stores and automated quality inspection centers. This "heavy asset, heavy service" system represents a very high industry barrier in the eyes of Hong Kong stock and domestic investors. Similar vertical champions include Futu, which has already surpassed a 50% market share in Hong Kong. This "user as investor" relationship can generate huge brand synergy after returning to Hong Kong. More critically, in terms of regulatory certainty, primary listing in Hong Kong can further eliminate the last bit of market doubt about its "cross-border business" compliance, thereby releasing the suppressed valuation multiples. In 2026, where financial security is a core consideration, Futu's return to Hong Kong is a wise move in line with regulatory trends. On the policy level, 2026 is the year when the national "14th Five-Year Plan" starts, and "new quality productivity" and "high-quality development" have become the core coordinates for reshaping capital pricing. The Hong Kong Stock Exchange has been vigorously promoting ESG (Environmental, Social, and Governance) investment guidelines in recent years and deeply binding them to national macro strategies, providing tailored "policy premiums" for these vertical track champions Pinduoduo's flexible supply chain and narrative of agricultural modernization have perfectly aligned with the policy rhythms of "high-quality going global" and "domestic demand circulation," providing a local value haven for its overseas compliance noise; Manbang's deep transformation of the physical logistics system precisely fits the national core guidance of "reducing logistics costs for the whole society" and industrial digitization, which may fully enjoy the valuation reshaping of the industrial internet; Aihuishou, as the "first stock of the circular economy," can gain exclusive green financial empowerment through its carbon reduction benefits, attracting a large number of ESG-themed funds, shifting its valuation logic from "traditional electronic retail" to "environmental technology services"; even Futu, which is in a specific regulatory cycle, is returning to Hong Kong against the backdrop of the country's emphasis on "financial security," realizing the dividends of valuation repair with complete compliance certainty... In this macro context, if these companies can return to Hong Kong, it is not only a return in terms of liquidity but also a precise bet by capital on their deep integration into the fundamentals of China's macro economy, fundamentally reconstructing the valuation logic. ## **Finding Alpha in Certainty** In summary, the large-scale return of Chinese concept stocks is no longer a passive "escape" in response to geopolitical risks, but an active "return" to seize corporate pricing power. In this process, the underlying logic of valuation is undergoing profound changes. For "vertical champions," returning to Hong Kong means they can finally break free from the cognitive biases of the U.S. stock market. Some assets that are seen as burdens by U.S. capital will be transformed into tangible market value premiums under the scrutiny of southbound funds. For the Hong Kong stock market itself, this is also a transformative reshaping. As more high-quality Chinese concept stocks with core hard technology, circular economy, and going global capabilities settle as "dual primary listing" targets, the Hong Kong stock market is accelerating its complete transformation from relying on "old money" (traditional real estate and finance) to embracing "new money" (technology and new economy). Standing at the starting point of this new capital norm in 2026, the logic of secondary market investment must also evolve accordingly. In a global macro environment rife with uncertainty, true "alpha" is hidden within these certain value returns. Investors should break free from traditional "benchmark thinking" and closely monitor targets with the following three characteristics: **First, companies with superior blood-generating capabilities, possessing stable operating cash flow, and having crossed the money-burning expansion phase to enter a profit cycle; second, businesses that align with macro trends, with their core operations highly compatible with national medium- and long-term industrial policies (such as circular economy, green finance, high-quality going global strategy), able to enjoy policy dividend premiums; third, vertical industry leaders that exist at a liquidity discount, which have been long-term and severely undervalued due to the lack of standard benchmarks or being constrained by market capitalization in the U.S. stock market, falling into a "liquidity trap."** It is worth mentioning that the Hong Kong Stock Exchange recently published a consultation document seeking market opinions on a series of suggestions to enhance the competitiveness of Hong Kong's listing mechanism, one important point being to lower the threshold for the return of Chinese concept stocks, for example: companies with dual-class shares can list in Hong Kong for a second time, requiring them to have been listed on a qualified exchange for 2 years without violations, with financial thresholds directly lowered to be the same as those for primary listings in Hong Kong; Companies with the same share and voting rights are allowed to list for a second time in Hong Kong, easing the Path B; for companies transitioning from a second listing to a dual primary listing, the Hong Kong Stock Exchange will rewrite the rules for transitioning to a dual primary listing, providing clearer guidance. **This is not merely a relaxation of rules, but a precise "targeted rescue." Its core purpose is to proactively retain the global pricing power of "vertical track champions" and new economy assets, which have fallen into the liquidity trap of the U.S. stock market, entirely within China's capital market.** The return journey is also the journey of conquest. Over the past five years, Chinese concept stocks have completed their geographical and capital migration amidst turbulent waves; in the next five years, they will reshape their business narrative in a true value market. 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