Northbound funds | Northbound trading saw a net buying of 7.517 billion yuan, Northbound funds increased investment in Tracker Fund of Hong Kong (02800) by nearly 6.2 billion Hong Kong dollars, and sold Alibaba and Tencent throughout the day.

On July 22, in the Hong Kong stock market, the Northbound funds had a net buying of 7.517 billion Hong Kong dollars. Among them, the net buying through the Shanghai-Hong Kong Stock Connect was 3.838 billion Hong Kong dollars, and the net buying through the Shenzhen-Hong Kong Stock Connect was 3.679 billion Hong Kong dollars. The top three stocks with the highest net buying by the Northbound funds were TRACKER FUND OF HONG KONG (02800), Hua Hong Grace Semiconductor (01347), and KNOWLEDGE ATLAS (02513). The top three stocks with the highest net selling by the Northbound funds were Tencent (00700), BABA-W (09988), and KB LAMINATES (01888). The active trading stocks through the Shanghai-Hong Kong Stock Connect were TRACKER FUND OF HONG KONG (02800), which had a net buying of 6.182 billion Hong Kong dollars. Galaxy Securities believes that the current Hong Kong stock market is in a phase of gradual recovery rather than a starting point for a general rise. There has been a noticeable capital inflow into the Hong Kong stock market recently, which is the core driver of the market strength. Both domestic and foreign capital resonating in the technology sector have jointly boosted market sentiment. Foreign capital remains cautious overall, with mainly passive and short-term flexible foreign capital inflows, while long-term active funds have not returned on a large scale. Hua Hong Grace Semiconductor (01347) had a net buying of 1.204 billion Hong Kong dollars, while Semiconductor Manufacturing International Corporation (00981) saw a net selling of 454 million Hong Kong dollars. According to sources, TSMC has negotiated with customers to raise chip manufacturing prices by up to 10% in 2027 to address rising costs. TSMC began talks in June and this month finalized a benchmark price increase of 5% to 10%. This price adjustment will take effect next year and will cover both advanced and mature semiconductors. KNOWLEDGE ATLAS (02513) had a net buying of 362 million Hong Kong dollars. KNOWLEDGE ATLASAI has initiated the construction of a domestic AI computing power data center with a capacity of 1GW, using only domestic AI chips. On the same day, KNOWLEDGE ATLAS completed the acquisition of XCore Sigma, a domestic AI heterogeneous computing software company, which is considered one of the top AI Infra teams in China. These two actions have solidified KNOWLEDGE ATLAS's key capabilities in computing power supply and release. Montage Technology (06809) had a net buying of 33.52 million Hong Kong dollars. Citi released a research report stating that Montage Technology's H-shares have a premium over the company's A-shares, reflecting international investors' preference for this scarce AI-themed stock. The report pointed out that after Montage Technology announced its performance forecast for the first half of 2026 and a share buyback plan, the bank followed up with the company's management. The bank believes that despite short-term fluctuations in stock prices, the company's business fundamentals remain strong. Benefiting from improvements in substrate supply shortages, the second quarter of this year saw record high revenue and profits, with further contributions from new products. GigaDevice Semiconductor Inc. (03986) saw a net selling of 59.37 million Hong Kong dollars. On July 20, China Life Insurance announced that eight of its fund management plans collectively sold about 1.1092 million shares of GigaDevice Semiconductor Inc. on July 8, with the selling prices ranging from HK$611.46 to HK$624.61 per share, totaling more than 682 million yuan in cashing out. All transactions were confirmed on the same day. YOFC (06869) had a net selling of 3.28 billion Hong Kong dollars. Jefferies released a research report stating that although AI and geopolitical conflicts are driving demand for optical fibers and the US supply chain is facing serious shortages, with China and global production significantly expanding, the increase in supply will gradually eliminate the shortage situation. YOFC may face the risk of market share loss, with profits in 2026-2027 potentially peaking cyclically. Jefferies downgraded YOFC from a "buy" to a "hold," but raised the target price from HK$10.73 to HK$153.74. BABA-W (09988) and Tencent (00700) saw net selling of 2.759 billion and 2.764 billion Hong Kong dollars, respectively. Huatai released a research report stating that looking ahead, as hedge fund short covering may have reached halfway, and short-selling capital is beginning to accumulate again, considering that A-shares and Korean stocks may gradually confirm their bottoming out, and the sentiment index of the Hong Kong stock market is gradually recovering, the rebound driven by capital flow may be sustainable on a monthly basis, but the core element of a long-term reversal is likely to be the repair of fundamentals after the earnings season. In addition, MEITUAN-W (03690) had a net buying of 257 million Hong Kong dollars, while KB LAMINATES (01888) saw a net selling of 819 million Hong Kong dollars.