--- title: "The Hang Seng TECH Index after the pullback shows significant cost-effectiveness" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/266114761.md" description: "The Hang Seng TECH Index saw increased market confidence following Tencent's better-than-expected performance and the end of the U.S. government shutdown. The Federal Reserve may cut interest rates in December, which could lead to a new round of gains for Hong Kong stocks. The Hang Seng TECH ETF has been listed by Southern, and Southern Fund has adjusted its management fee rates to attract investors. The Hang Seng TECH Index is worth paying attention to, as its level is close to the starting point of the previous market rally" datetime: "2025-11-17T03:48:58.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/266114761.md) - [en](https://longbridge.com/en/news/266114761.md) - [zh-HK](https://longbridge.com/zh-HK/news/266114761.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/266114761.md) | [English](https://longbridge.com/en/news/266114761.md) # The Hang Seng TECH Index after the pullback shows significant cost-effectiveness After Tencent's earnings disclosure last week, the market has more confidence in the Hang Seng TECH Index. First, Tencent's performance significantly exceeded market expectations, and as a major weighted stock in the Hang Seng TECH, Tencent's share buyback will provide support to the market. Second, the U.S. government shutdown has ended, and the macroeconomic situation will gradually become clearer in the next 1-2 months. The potential for a Federal Reserve rate cut in December may bring new upward momentum to Hong Kong stocks. Recently, the volatility in U.S. stocks has also been considerable, but Hong Kong stocks have shown less volatility for major stocks like Tencent and Alibaba amid the sharp fluctuations of the U.S. MAG 7. This is because Hong Kong stocks have already adjusted ahead of the U.S. market for some time, and now we are waiting for the U.S. market to stabilize again. As market risk appetite rebounds, the adjusted Hang Seng TECH Index is still worth paying attention to. Taking advantage of the pullback, investors can consider related index products to position themselves in the index, such as the Hang Seng TECH ETF launched today by Southern (520570), which focuses on leading technology stocks in Hong Kong. Additionally, according to an announcement from Southern Fund, starting today (November 17, 2025), the Southern Hang Seng TECH Index Initiated Securities Investment Fund (QDII) will be changed to the Southern Hang Seng TECH Exchange-Traded Open-Ended Index Securities Investment Fund Initiated Link Fund (QDII) (Class A 020988, Class C 020989), and the management fee for the link fund will be reduced from an annual rate of 0.20% to 0.15%. This move better meets the investment and financial management needs of a wide range of investors and lowers their investment costs, which may guide more off-market funds into on-market investments. **Catalysts for Hang Seng TECH** First, from a point of view, the current level of the Hang Seng TECH is at the starting point of the previous market rally, while the recent low point is around 5700. This low point was caused by the significant decline in U.S. stocks, which triggered global risk aversion. The reasons for the risk aversion at that time were: first, the U.S. government shutdown led to liquidity tightening in the U.S., and the SOFR rate at that time was equivalent to no rate cut; second, without macro data, the Federal Reserve's statements regarding a rate cut in December were hawkish, and they remain hawkish now due to the lack of a month's data to prove otherwise; third, institutional funds locked in profits early before the year-end and began to sell off. These three reasons have had a significant impact on both U.S. and Hong Kong stocks, but currently, these two reasons have been resolved, and the excessive decline presents an opportunity for institutions to buy back in. The reasoning is simple: U.S. stocks typically perform well as the year-end approaches, and the current macro conditions align with this. Institutional and long-term funds sold off significantly in October and November, so after a substantial decline, they will still buy back. This requires attention to whether the Federal Reserve's stance on the December rate cut has changed, such as whether upcoming macro data will show any shifts. 1. From the chart below, it is expected that the tone for 2025-2026 will still be characterized by rate cuts leading to lower interest rates, which is also the current investment theme in the global market, transitioning from a "strong dollar" to a "weak dollar" paradigm In the process of the global market shifting to a new paradigm, the volatility of financial markets is difficult to significantly decline, which is not friendly for trading, but to some extent also provides more allocation opportunities. Appropriately reducing the proportion of dollar assets and increasing the proportion of assets in non-US regions such as Asia-Pacific will be the new strategy for global funds. In terms of market trading strategies, a weak dollar has become a market consensus, and liquidity easing is beneficial for non-US assets. Historically, global liquidity often follows a complete dollar cycle of 4-5 years, exhibiting a pattern of cyclical fluctuations, while the strength and weakness of the dollar index almost dominate the trend of global liquidity changes. The easing of global liquidity will be favorable for global risk assets, especially for non-US assets that have been relatively pressured under the strong dollar in recent years. This is crucial for the Hong Kong stock market, which is the most undervalued and least allocated market among major markets, both in terms of valuation and foreign capital allocation positions. From the chart below, the allocation ratio of global funds to Chinese stocks is still under-allocated by 1.24%; especially active funds are under-allocated by about 2%, and passive funds are under-allocated by about 1%. Therefore, if the Federal Reserve further cuts interest rates in December, the Hong Kong stock market is expected to regain momentum. Additionally, the Hong Kong stock market has a benefit that differs from the US stock market. When market volatility amplifies, southbound funds will buy a large amount of Hang Seng TECH to provide a safety net, ensuring that at least there is southbound capital to support the market. For example, looking back at the period of weak market performance over the past month, the buying of southbound funds has not stopped, and with the support of buybacks from major stocks like Tencent after their earnings reports, the volatility of Hang Seng TECH will have some support. 2. From a macro policy perspective, both China and the United States are actually pushing for the development of AI technology, which is at least a major trend for the next 3-5 years. Therefore, from a policy orientation standpoint, the Hang Seng TECH Index also has high allocation value in line with policy direction. Especially under the AI transformation, the advantages of domestic internet companies are very obvious, as they not only have a vast number of users and applicable AI scenarios but also have ample cash flow to ensure investment in AI capital expenditures, effectively enhancing user engagement and the company's operational efficiency. For example, from Tencent's performance, it is evident that the benefits of AI for Tencent have already begun to show. Tencent's advertising revenue in the third quarter increased by 21% year-on-year to 36.2 billion yuan, mainly due to the increase in ad loading volumes from mini-programs and search ads, as well as the improvement in eCPM driven by AI-targeted advertising. Both factors contributed equally. In addition, the company launched the intelligent advertising product matrix Tencent Advertising AIM+, and CICC expects Tencent's advertising to grow by 19% year-on-year in the fourth quarter. In terms of Tencent's enterprise services, CICC predicts a 14% year-on-year increase in revenue for 3Q25, mainly due to the incremental demand for cloud computing brought by AI, combined with the growth of WeChat e-commerce technology service fees. It is expected that financial and enterprise service revenue will grow by 10% year-on-year in 4Q25. From a valuation perspective, Tencent is currently valued at around 16 times PE, while the historical target price of 700 yuan corresponds to an 18 times PE. Relatively speaking, Tencent's valuation is still cheap, and with the growth of EPS, Tencent's certainty remains high. Looking at Alibaba's valuation, if it corresponds to a price of 204 yuan, it would only be 17.5 times PE, while it is currently around 15 times PE. Compared to its peers in the U.S. stock market, which have valuations of 25-30 times PE, there is still a significant gap. In summary, the current market fluctuations are due to two main factors: first, the volatility caused by the de-leveraging and reduction of positions in the U.S. stock market; second, the decline in market risk appetite, with domestic funds approaching year-end profit-taking causing fluctuations. However, these are just short-term disruptive factors, and after this round of adjustment, we still expect the Hang Seng TECH Index to perform well in the future If you want to hedge individual stock risks with a basket of stocks, you can pay attention to the Hang Seng TECH ETF Southern (520570) mentioned at the beginning. It not only has significant advantageous asset characteristics but also features high elasticity and low valuation. Currently, the index constituents include core technology leaders in Hong Kong such as Alibaba, Tencent, and SMIC, and the overall valuation level is still at a historically low level. At the same time, the industry distribution is concentrated, with the top ten holdings in the index mainly comprising TMT and discretionary consumption, covering emerging industries such as the internet, e-commerce, AI, and cloud computing. The new economy consumption and technology sectors are the long-term core value creators of Hong Kong stocks. It is worth mentioning that the management fee rate of the Hang Seng TECH ETF Southern (520570) is only 0.15%, and the custody fee rate is 0.05%, which is among the lowest in its category, providing significant holding cost advantages. Interested friends can pay attention to this Hang Seng TECH ETF (520570) with the lowest fees in its category and its connect (Class A 020988, Class C 020989). In a bull market, the gains of the Hang Seng TECH Index often do not lag behind individual stocks ### 相關股票 - [Tencent Holdings Limited (TCTZF.US)](https://longbridge.com/zh-HK/quote/TCTZF.US.md) - [Tencent (TCEHY.US)](https://longbridge.com/zh-HK/quote/TCEHY.US.md) - [TENCENT (00700.HK)](https://longbridge.com/zh-HK/quote/00700.HK.md) - [Hang Seng TECH Index (STECH.HK)](https://longbridge.com/zh-HK/quote/STECH.HK.md) ## 相關資訊與研究 - [While the S&P 500 Struggles, These 3 Energy Dividend Stocks Are Soaring](https://longbridge.com/zh-HK/news/281203405.md) - [Alexandria Real Estate Equities, Inc. 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