Korean funds are scrambling to invest in Zhongji Innolight (03308)! In just 7 days since its H-share listing, there has been a net purchase of 43.39 million USD.

Leading optical communication company Zhongji Innolight (03308) made its debut on the Hong Kong Stock Exchange on July 30, and received strong allocations from South Korean investors. According to data from the Korea Securities Depository, since the listing of Zhongji Innolight H-shares, South Korean investors have net bought $43.3942 million worth of this security, ranking first among South Korean investors' net purchases of Hong Kong stock securities in the second half of the year, with the net purchase amount nearly three times higher than that of the second-ranked security, giving it a significant advantage. In addition to Korean capital, JPMorgan Chase has also continued to increase its holdings in this security as of August 4. Zhongji Innolight is a leading enterprise in the optical communication sector. Although its stock price has come under pressure recently due to relevant rumors, industry insiders believe that the company has solid competitive barriers and a robust order backlog, maintaining mid- to long-term investment value. Apart from the optical communication sector, South Korean investors have also increased their holdings in the automotive and semiconductor sectors in the second half of the year, purchasing stocks such as BYD COMPANY (01211) H-shares and the GlobalX China Semiconductor ETF. Additionally, technology-related ETFs listed on the Hong Kong market, such as the Huatai-PineBridge CSI 300 ETF and the Southern Eastern Innovation 50 ETF, have also attracted net purchases from South Korean investors. Other AI software and internet stocks like XUNCE Technology (03317), Alibaba (09988), Baidu (09888), and Xiaomi (01810) also saw net buying activity. Industry insiders emphasize that China's technology assets have strong appeal to foreign investors, particularly in the semiconductor and automotive sectors, which boast solid industrial foundations, highlighting their mid- to long-term investment value. Zhongji Innolight H-shares see significant buying by South Korean investors Data from the Korea Securities Depository shows that since Zhongji Innolight H-shares were listed on July 30, South Korean investors bought $45.0670 million worth of this security and sold $1.6729 million, resulting in a net purchase amount of $43.3942 million. In terms of net purchases of Hong Kong stocks by South Korean investors in the second half of the year, Zhongji Innolight ranked first, with a net purchase amount nearly three times higher than that of the second place. Specifically, from July 1 to August 7, the second-highest net purchase was for the Chinese TR INTERIORS stock, with South Korean investors buying $16.4201 million and selling $5.3964 million, resulting in a net purchase of $11.0237 million a substantial gap compared to Zhongji Innolight. Zhongji Innolight is the leader in high-speed optical modules and a core optical component supplier for major overseas AI computing power companies, having listed on the Hong Kong Stock Exchange on July 30, 2026. Notably, just over a week after its listing, it has attracted significant purchases from South Korean investors, making it the top net purchase in the second half of the year, which underscores the strong investment enthusiasm. In addition to Korean investors, JPMorgan Chase has also recently continued to increase its holdings in Zhongji Innolight. Information from Hong Kong's Disclosure of Interests shows that on August 4, JPMorgan raised its stake in Zhongji Innolight H-shares from 13.48% to 15.02%, with an average purchase price of HKD 1,150.8522. Recently, due to rumors regarding a ban on optical modules, Zhongji Innolights stock price has come under pressure; however, analysts indicate that the companys product competitive advantages are unlikely to be severely shaken in the short term, and it has a sufficient backlog of orders. Additionally, ongoing capacity expansions in Thailand provide measures to hedge against potential risks in overseas supply chains. Zhongji Innolight also mentioned in a recent research activity that nearly all customer orders currently cover the entire year of 2026, with some customer orders extending into 2027, and delivery plans detailed on a monthly basis. By 2027, industry conditions will be clearer, with the demand for products such as 800G, 1.6T, 2.4T, and NPO showing strong certainty and rapid growth. Zhongji Innolight also pointed out that some key customers have provided guidance for new products in 2028, with the anticipated amounts being very substantial. The company expects that the capital expenditures of its key downstream customers will continue to show strong sustainability, with customers willing to increase their industry investments. Automotive and semiconductor sectors also favored by South Korean investors In addition to focusing on the leading optical communication company Zhongji Innolight, South Korean investors have also increased their holdings in the automotive and semiconductor sectors, bucking the trend. In the automotive sector, from July 1 to August 7, South Korean investors bought $12.9466 million worth of BYD COMPANY H-shares and sold $3.0871 million, resulting in a net purchase of $9.8595 million for BYD Company Limited H-shares. In the semiconductor sector, South Korean investors purchased the GlobalX China Semiconductor ETF, with purchases amounting to $18.7571 million from July 1 to August 7, while sales totaled $9.4610 million, yielding a net purchase of $9.2962 million. South Korean investors have also bought several technology-themed ETFs listed on the Hong Kong Stock Exchange. Specifically, from July 1 to August 7, South Korean investors purchased the Huatai-PineBridge CSI 300 Index ETF for $12.1548 million, sold it for $2.7607 million, resulting in a net purchase of $9.3941 million; they bought the Southern Eastern Innovation 50 Index ETF for $2.5820 million, sold it for $1.8182 million, with a net purchase of $0.7639 million; and bought the Southern Eastern Hang Seng Technology Index ETF for $1.0823 million, sold it for $0.3825 million, resulting in a net purchase of $0.6998 million. Moreover, from July 1 to August 7, South Korean investors also net bought securities in AI software and internet sectors including XUNCE Technology, Luxshare Precision Industry-H, Alibaba, Z.AI, Baidu, and Xiaomi. Industry insiders point out that China's technology assets have strong appeal for foreign investments, especially in the semiconductor and automotive sectors, which have solid industrial advantages, thus highlighting their mid- to long-term investment value. Recently, as volatility has intensified in the South Korean domestic stock market, some South Korean funds have sought to diversify investment risks through allocations in Chinese assets listed on the Hong Kong stock market. This article is reprinted from "Caixin", edited by GMTEight: Jiang Yuanhua.