Hang Seng Index Company: The performance of Hong Kong stocks in the technology and biotechnology sectors will stand out in 2025. The Hang Seng Dual Technology Index achieved its best performance since its launch.

Hang Seng Index Corporation stated in a document that in 2025, the two major themes of technology and biotechnology performed well in the Hong Kong stock market, with both the Hang Seng Tech Index ("Tech Index") and the Hang Seng Biotech Index ("HSBIO") achieving their best annual performance since their inception. Against this background, the Hang Seng Dual Technology Index ("HSDTI") was launched in January 2026, combining the components of the Hang Seng Tech Index and the Hang Seng Biotech Index to present two major highlight themes within a single index. Both the Hang Seng Tech Index and the Hang Seng Biotech Index set annual growth records in 2025 The technology and biotechnology sectors received high market attention in 2025, with the outstanding performance of related benchmark indices fully reflecting this. Chart 1 shows that the Tech Index rose by 23.5% in 2025, achieving its highest annual growth since its launch in July 2020. At the same time, the Hang Seng Biotech Index also recorded a 64.5% increase, its best annual performance since its launch in December 2019. The strong performance of these two indices was primarily driven by structural factors and improvements in fundamentals, which will be further explored in the following sections. Chart 1: Annual performance of the Hang Seng Tech Index and the Hang Seng Biotech Index since 2020 Source: Hang Seng Index Company; Data as of December 31, 2025 Chinese Technology: Focus on Policy and AI Momentum The technology industry is a focus of the Chinese market and has clear and long-term policy support. In China's Fifteenth Five-Year Plan (2026-2030), "significantly improving the level of self-reliance in science and technology" is listed as one of the main goals. In addition, artificial intelligence (AI) has become a major focus in the market, with Chinese AI models continuing to gain global recognition. According to data from Artificial Analysis, models like KNOWLEDGE ATLAS, DeepSeek, and the large language model (LLM) developed by Alibaba have now become world leaders. Policy support and the rapid development of AI have further propelled the structural growth trend of the Chinese technology industry. The Hang Seng Tech Index, as one of our flagship indices, is also a widely recognized benchmark for the Chinese technology sector. This index represents the 30 largest technology companies listed in Hong Kong, with a high focus on intelligent, cloud, digital, e-commerce, fintech, or network businesses. The Hang Seng Tech Index has now developed a diversified product ecosystem, including exchange-traded products (ETPs), index funds, as well as derivatives such as futures, options, warrants, and bull/bear certificates. As of the end of 2025, the total assets under management (AUM) tracking the Hang Seng Tech Index ETPs have exceeded $44 billion. Chinese Biotechnology: Global Recognition and Increased Competitiveness As the global recognition of innovative drugs developed in China continues to rise, the Chinese biotechnology sector has gradually become a focus of market attention since the first half of 2025. In recent years, the number of outbound licensing transactions for innovative drugs has significantly increased, further consolidating market sentiment. According to the NextPharma database from healthcare data service provider Yiyaofang, the total amount of outbound licensing transactions for innovative drugs in China reached a record high of $136 billion in 2025 (Chart 2), far exceeding the previous record of $52 billion set in 2024. This record-breaking transaction size underscores the significant improvement in the global recognition, technological capabilities, and competitiveness of the Chinese biotechnology industry, marking the industry's important transition from relying on licensed imports of foreign technology to exporting domestically innovative products to international markets. Benefiting from the favorable industry trends mentioned above, the Hang Seng Biotech Index recorded a record 64% annual increase last year. This positive momentum continued into 2026, with the index rising by 9% in January. The Hang Seng Biotech Index, as an important benchmark for the biotechnology sector, tracks the performance of the largest 30 biotechnology companies listed in Hong Kong that meet the Stock Connect requirements, including leading and representative biotechnology companies and innovative drug developers. In addition, with the expansion of the product ecosystem, the benchmark status of the Hang Seng Biotech Index has been further consolidated. In November 2025, the Hong Kong Exchanges and Clearing Limited introduced futures products based on the Hang Seng Biotech Index, complementing existing ETPs and index funds to form an ecosystem of index products. As of the end of 2025, the total AUM tracking the Hang Seng Biotech Index ETPs is close to $1.5 billion. Chart 2: Total annual outbound licensing transactions for innovative drugs in China Source: NextPharma, Yiyaofang; Data as of December 31, 2025 Hang Seng Dual Technology Index: Capturing the Two Major Innovation Themes with a More Balanced Risk Allocation Technology and biotechnology are two distinct yet similar areas in the Chinese innovation landscape. While their development cycles differ, both have high levels of research and development investment, policy support, and structural growth characteristics. The newly launched Hang Seng Dual Technology Index combines these two major themes in a single benchmark, with 75% of the index weight allocated to the Hang Seng Tech Index and 25% to the Hang Seng Biotech Index (adjusted on each index reset date), reflecting the market capitalization difference between the two and the representativeness of both themes. The Hang Seng Dual Technology Index, relying on these two major indices and their diverse product ecosystems, benefits from its transparent and rule-based calculation method, as well as rigorous index management. The Hang Seng Dual Technology Index was launched on January 9, 2026, with performance backdated to the end of 2020. The index recorded a 36% increase in 2025, with the upward trend continuing into 2026 (Chart 3), reaching a 5% increase in January, reflecting the market's continued focus on Chinese innovation themes. Furthermore, the combination of technology and biotechnology not only brings thematic diversification but also a lower annualized volatility for the Hang Seng Dual Technology Index compared to the Hang Seng Tech Index and the Hang Seng Biotech Index (Chart 4). Therefore, this index can capture opportunities from both themes while maintaining lower volatility. As of January 30, 2026, the Hang Seng Dual Technology Index has a total of 58 constituent stocks, with the specific number varying depending on the degree of overlap between the Hang Seng Tech Index and the Hang Seng Biotech Index. The top twenty constituent stocks together account for 74% of the total index weight (Chart 5). In terms of industry distribution, the structure of the Hang Seng Dual Technology Index is largely similar to the Hang Seng Tech Index, but with a significantly higher proportion of healthcare, reaching 27% (Chart 6). Chart 3: Performance of the Hang Seng Dual Technology Index since 2025 Source: Hang Seng Index Company; Reset to 100 on December 31, 2024; Data as of January 30, 2026 Chart 4: One-year annualized volatility of the Hang Seng Dual Technology Index, Hang Seng Tech Index, and Hang Seng Biotech Index Source: Hang Seng Index Company; Data as of January 30, 2026 Chart 5: Top 20 constituent stocks of the Hang Seng Dual Technology Index (by weight) Source: Hang Seng Index Company; Data as of January 30, 2026 Chart 6: Industry structure comparison of the Hang Seng Dual Technology Index, Hang Seng Tech Index, and Hang Seng Biotech Index Source: Hang Seng Index Company; Data as of January 30, 2026