<div id="readability-page-1">Investor frustration is growing with Hong Kong’s technology index, as the benchmark’s prolonged slide contrasts sharply with the soaring share prices of several Chinese AI firms that recently went public in the city. The Hang Seng Tech Index – a gauge of Hong Kong-listed tech companies that was once seen as China’s answer to the Nasdaq – has come under pressure in recent months, and the index’s poor performance has drawn even more scrutiny amid the wider surge in Chinese artificial intelligence stocks. “Please save Hang Seng Tech,” one user commented on a recent post by the Securities and Futures Commission of Hong Kong on the social media platform RedNote, also known as Xiaohongshu, drawing nearly 6,000 likes. The index is missing out on the AI boom because it has not moved with the times, analysts said. It remains dominated by tech conglomerates, electric vehicle makers, e-commerce platforms and food delivery companies, as its eligibility rules have so far barred the inclusion of new AI players like MiniMax Group and Knowledge Atlas – also known as Zhipu AI – which have both made enormous gains since listing in Hong Kong. The index includes the 30 largest technology companies listed in Hong Kong, which are classified under industrials, consumer discretionary, healthcare, financials and information technology, according to the Hang Seng Indexes Company, an index compiler run by the Hang Seng Bank. Its top 10 constituents by weighting are BYD, Meituan, Xiaomi, Tencent Holdings, NetEase, Alibaba Group Holding, SMIC, JD.com, Kuaishou and Baidu, according to a report by Hang Seng Indexes released in March. Alibaba owns the South China Morning Post. Hang Seng Tech had fallen more than 30 per cent since its launch in July 2020 and nearly 56 per cent from its 2021 peak as of April 30. The decline has been especially steep since late 2025, with the benchmark down more than 11 per cent since the start of 2026. The slump reflects not just market sentiment, but also structural issues in how Hong Kong’s tech benchmark is constructed and how global capital is pricing Chinese tech assets, according to analysts. “Hong Kong’s tech stocks are lagging mainly due to structural issues,” said Kenny Ng Lai-yin, a securities strategist at Everbright Securities International. While US tech benchmarks have a higher weighting in AI-related names, companies like Tencent and Alibaba derive their earnings from different sources, such as e-commerce and financial services, where “AI has yet to translate into explosive growth”, he added.   As a result, earnings growth among the index’s heavyweights has remained relatively muted compared with pure-play AI firms, which are seeing much faster expansion, according to Ng. Jason Chan, senior investment strategist at Bank of East Asia, said the index’s composition had also left it exposed to the price competition, weak consumption and industrial overcapacity affecting several sectors in China. “The earnings outlook has been under pressure,” Chan said, adding that consensus earnings forecasts for the index had been cut by about 20 per cent this year, with full-year earnings per share expected to decline. The index lacks sufficient exposure to upstream semiconductor names and pure AI model developers, further contributing to its underperformance relative to global peers, while valuations have also been capped by concerns over policy uncertainty in China and geopolitical tensions, including US restrictions on the tech sector, he added. Hong Kong’s top-performing initial public offerings of the year so far are both Chinese AI companies that are not currently part of the index: Zhipu AI and MiniMax. The stock prices of the two large language model (LLM) developers have surged by more than 700 per cent and 380 per cent, respectively, since their debuts earlier this year, underscoring investors’ strong appetite for AI plays. “We believe AI and LLM names will become a much bigger driver of Hong Kong equity markets, reshaping index composition, performance, liquidity and fund flows,” Morgan Stanley analysts led by Gary Yu said in a report on April 27. The bank expects both Zhipu AI and MiniMax to be added to the index following the June review, with a combined weighting of 5 to 7 per cent, according to the report. If Zhipu AI and MiniMax had been included in the index from their listing dates, the Hang Seng Tech Index’s year-to-date loss would have narrowed from 12.6 per cent to 7.6 per cent, it added. Their coming inclusion is also expected to trigger passive inflows of US$1.25 billion to US$1.75 billion, based on roughly US$25 billion in assets tracking the index, the analysts said. Fundraising in the city has reached HK$139 billion (US$17.74 billion) so far this year, about half of 2025’s total, with information technology accounting for 39 per cent of proceeds, Morgan Stanley’s report showed. </div>

00100

02513

KBAB

BABX

<p>Investor frustration is rising as Hong Kong's tech index continues to decline, contrasting sharply with the surge in Chinese AI stocks. The Hang Seng Tech Index has fallen over 30% since its launch in July 2020, primarily due to structural issues and a lack of AI representation. Analysts suggest that the index's heavyweights, like Tencent and Alibaba, are not benefiting from the AI boom, leading to muted earnings growth. Upcoming additions of AI firms Zhipu AI and MiniMax could reshape the index and attract significant investment inflows, potentially improving its performance.</p>

SCMP

MINIMAX-W

KNOWLEDGE ATLAS

KraneShares 2x Long BABA Daily ETF

BABA 2x Long Daily ETF - GraniteShares

Tencent Holdings Limited

BABA-W

Alibaba

Tencent

TENCENT

Chinese AI stocks are surging. So why is Hong Kong’s tech index still falling?