Northbound funds | Northbound trading saw a net selling of 6.494 billion yuan, with Northbound investors selling Hong Kong ETFs and technology stocks while buying more than 3.2 billion Hong Kong dollars worth of Semiconductor Manufacturing International Corporation (00981) shares.

On May 22, in the Hong Kong stock market, Northbound funds had a net sell of 6.494 billion Hong Kong dollars. Among them, the Shanghai-Hong Kong Stock Connect had a net sell of 2.297 billion Hong Kong dollars, and the Shenzhen-Hong Kong Stock Connect had a net sell of 4.197 billion Hong Kong dollars. The stocks with the most net buying by Northbound funds were Semiconductor Manufacturing International Corporation (00981), HUA HONG SEMI (01347), and KB LAMINATES (01888). The stocks with the most net selling by Northbound funds were BABA-W (09988), Tencent (00700), and TRACKER FUND OF HONG KONG (02800). Northbound funds continued to buy chip stocks. Semiconductor Manufacturing International Corporation (00981) and HUA HONG SEMI (01347) received a net buying of 3.231 billion and 0.774 billion Hong Kong dollars, respectively. In terms of news, Morgan Stanley released a research report pointing out that TSMC and Samsung are integrating mature process capacity, which may create opportunities for second-line wafer foundries. The report believes that the mature process upcycle is imminent. The bank expects a shortage of mature process capacity in the second half of 2027. In addition, Semiconductor Manufacturing International Corporation announced that its purchase of 49% equity of SMIC Northern has been approved by the CSRC. KB LAMINATES (01888) received a net buying of 0.315 billion Hong Kong dollars. In terms of news, NVIDIA is expected to start shipping Vera Rubin chips in the third quarter. Morgan Stanley released a research report stating that in the new generation Vera Rubin rack (VR200) NVIDIA is about to launch, the PCB cost has increased by more than 233% compared to the GB300. This will raise the total PCB consumption value to around $117,000, compared to $35,000 for the GB300. LENOVO GROUP (00992) received a net buying of 0.273 billion Hong Kong dollars. In terms of news, LENOVO GROUP released its results, showing that revenue in the fourth quarter was nearly 150 billion yuan, a year-on-year increase of 27.1%, the highest growth rate in nearly 20 quarters; under HKFRS, net profit increased by 479.5% year-on-year, and adjusted net profit doubled year-on-year. AI-related business revenue grew by 84% year-on-year, accounting for 38% of the group's total revenue. GigaDevice Semiconductor Inc. (03986) received a net buying of 0.11 billion Hong Kong dollars. In terms of news, Changxin Technology recently updated its science and technology innovation board IPO prospectus. The market generally believes that relying on the impressive profit expectations in the first half of the year, coupled with the valuation dividend of the AI computing power track, Changxin Technology has the potential to challenge a theoretical market value of 2 to 3 trillion yuan after listing. According to the IPO prospectus, GigaDevice Semiconductor Inc. currently holds 1.8% of its equity. GigaDevice Semiconductor Inc. Chairman Zhu Yiming also serves as Chairman of Changxin Technology. Northbound funds sold Hong Kong stock ETFs. CSOP Hang Seng TECH Index ETF (03033), Hang Seng H-Share Index ETF (02828), and TRACKER FUND OF HONG KONG (02800) were sold with a net amount of 1.164 billion, 1.272 billion, and 1.336 billion Hong Kong dollars, respectively. In terms of news, Soochow believes that in the short term, Hong Kong stocks are under pressure from overseas factors, but there is still value in long-term allocation. The surge in US bond yields has a short-term impact on the performance of Hong Kong stocks. The 10-year and 30-year US Treasury yields have broken through 4.5% and 5%, respectively, entering the danger zone, which will affect the technology growth market in the short term. The US NACHO trade continues, coupled with the latest US inflation data exceeding expectations, the market is gradually pricing in long-term inflation. Whether oil prices will fall in late May is crucial. Tech stocks were also sold, with BABA-W (09988) and Tencent (00700) being sold with a net amount of 2.062 billion and 1.726 billion Hong Kong dollars, respectively. In terms of news, Tencent and Alibaba have simultaneously released signals to increase AI capital expenditure. Tencent's quarterly AI spending reached a new high of 37 billion yuan, and Alibaba explicitly stated that future investments will far exceed the original plan of 380 billion yuan. Guolian Minsheng Securities pointed out that the commercialization of AI has entered the verification stage, and the focus of competition is shifting from technical and computing power expansion to a heavy asset competition centered on capital expenditure efficiency. In addition, Montage Technology (06809) and YOFC (06869) were sold with a net amount of 0.122 billion and 0.352 billion Hong Kong dollars, respectively.