Hong Kong’s “DeepSeek Moment” May Have Arrived—Anticipating a Catch-Up Rally

Amid widespread market euphoria, value-oriented considerations have become a prudent choice for investors. Despite consecutive days of gains, the Hang Seng Tech Index remains relatively inexpensive in the current cycle. Historical analysis reveals a clear rotational pattern between the ChiNext Index and the Hang Seng Tech Index; using the ChiNext Index—which recently hit a three-year high—as a reference suggests the Hang Seng Tech Index retains meaningful catch-up potential.

Recent disclosures of favorable industry developments have convinced market observers that the final constraint on Hong Kong equities’ relative performance has been removed, making well-positioned core assets attractive for further gains. In the context of the global artificial intelligence wave, Hong Kong’s “DeepSeek moment” may be at hand.

The Hang Seng Tech Index ETF (513180) tracks thirty leading Hong Kong‐listed technology companies spanning hardware and software, with holdings strategically aligned across the AI value chain. Likewise, the Hang Seng Internet ETF (513330) targets the platform economy with 97% AI exposure and 86% DeepSeek integration, serving as a precise vehicle for investors seeking AI-plus-internet core assets.

As major benchmarks repeatedly breach multi-year highs, sectors such as innovative pharmaceuticals, robotics, AI, and semiconductors have experienced sharp upticks and retracements, challenging investors to navigate theme rotations without eroding capital in a slow bull market.

Guotou Securities’ August 17 report, “Hong Kong Tech Will Catch Up,” highlights that when the ChiNext Index outperforms the Hang Seng Tech Index by approximately 20 percentage points, a catch-up phase for the latter often follows. Following the new-energy clustering anomaly of 2021, the gap recently expanded from 18% to 25% by August 21—underscoring a high probability of Hang Seng Tech narrowing the differential given its significant institutional weighting and contrarian positioning.

This anticipated rebound is underpinned by tangible industrial catalysts. The domestic computing-power sector saw multiple breakthroughs in August: Huawei’s Pura80 series incorporating the Kirin 9020 demonstrated advanced packaging and supply-chain resilience; Haiguang Information’s C86 processor delivered enhanced performance and ecosystem support; and Montage Technology’s C6P series CPU showcased competitive strengths. Such rapid chip iterations reinforce the global competitiveness of domestic semiconductors.

On the demand front, Tencent noted on August 13 that domestic inference chips could alleviate international supply-chain risks, while DeepSeek’s upgrade to DeepSeek-V3.1 on August 21—with FP8 precision support and integration with upcoming domestic chips—promises to advance the domestic AI-computing ecosystem. Huawei Ascend chip–based servers have also secured government, financial, and telecom bids, confirming rising competitiveness.

Analysts at Huaxi Securities observe that escalating demand for domestically controllable computing power is directing policy and capital toward local AI-chip and computing-power firms. Citic Securities concurs that ongoing overseas supply-chain uncertainties and compelling domestic pricing will further elevate market share for Chinese chipmakers.

An additional catalyst stems from emerging automakers’ AI transformations. XPeng Motors disclosed plans for mass production of L4 autonomous vehicles and robotaxi pilots in 2026, alongside humanoid-robot manufacturing in the second half of that year. Q2 results showed a 62.8% year-on-year reduction in net loss, over 100,000 vehicles delivered—the first quarterly record—and revenue of RMB 18.27 billion. Founder He Xiaopeng’s commitment of HKD 249 million to boost his stake to 18.9% conveyed strong confidence to the market.

In today’s AI-driven landscape, an index’s AI exposure has become a critical criterion. China Asset Management emphasizes that the Hang Seng Tech Index’s unique composition positions it at the forefront of Hong Kong’s rally. Semiconductor Manufacturing International Corporation, Hua Hong Semiconductor, and ASMPT, which together comprise 8.65% of the index, bolster its chip exposure. Leading autonomous-driving companies BYD, NIO, XPeng, Horizon Robotics, and Sunny Optical Technology account for 16.4%; including Xiaomi（01810.HK）brings the combined weight to 23.71%.

Against a backdrop of intensifying global tech competition and an urgent need for indigenous innovation, the Hang Seng Tech Index appears poised for its defining moment. Over the medium to long term, the rise of China’s technology sector is expected to sustain a robust catch-up phase for core Chinese tech assets represented by the Hang Seng Tech Index.

The Hang Seng Tech Index ETF (513180) offers T+0 trading and reflects the performance of 30 leading AI-value-chain companies. Ongoing interest-rate cut expectations and sustained southbound capital inflows may create a domestic-international resonance that benefits Hong Kong equities, particularly the highly responsive Hang Seng Tech Index. The Hang Seng Internet ETF (513330), also supporting T+0 trading, aggregates major internet platforms including Tencent, Alibaba, Meituan, Kuaishou, Baidu, and JD.com. . With 97% AI exposure and 86% DeepSeek content, it remains an efficient conduit for investors focusing on AI-plus-internet core assets (Class A: 013171; Class C: 013172).

Capital inflows and market gains have propelled China Asset Management’s Hong Kong ETF suite beyond RMB 100 billion in assets, making it the first fund manager to reach this milestone. Its 14-fund lineup spans broad-market, technology, healthcare, and dividend strategies. As of August 22, the flagship Hang Seng Tech Index ETF (513180) held RMB 37 billion and the Hang Seng Internet ETF (513330) held RMB 27.7 billion in assets.

Investors should recognize that these equity funds carry higher risk and return profiles than mixed-asset, bond, or money-market funds, and are classified as medium-to-high risk (R4). Principal risks include discrepancies between index and overall market performance, index volatility, and tracking error between fund returns and their respective indices.