Northbound funds | Northbound funds recorded a net purchase of 14.002 billion yuan, aggressively accumulating shares in the AI industry chain. Throughout the day, they bought nearly 2.4 billion Hong Kong dollars worth of Alibaba (09988).

On August 18, in the Hong Kong stock market, net purchases by Northbound investors amounted to HKD 14.002 billion. Among these, net purchases through the Stock Connect (Shanghai) totaled HKD 9.793 billion, while net purchases through the Stock Connect (Shenzhen) reached HKD 4.208 billion. The stocks with the highest net purchases by Northbound investors were TRACKER FUND OF HONG KONG (02800), BABA-W (09988), and Semiconductor Manufacturing International Corporation (00981). Active traded stocks via Stock Connect (Shanghai) Active traded stocks via Stock Connect (Shenzhen) TRACKER FUND OF HONG KONG (02800) received net purchases of HKD 3.508 billion. Guoyuan International noted that last week, despite the continued easing of overseas interest rate hike expectations, Hong Kong stocks significantly underperformed U.S. stocks and major Asian markets, indicating that overseas interest rates have gradually shifted from being a major suppressive factor to a marginal benefit. Meanwhile, domestic fundamentals, earnings expectations, and incremental capital are becoming more important pricing variables. A trend-driven uptick still depends on an improvement in domestic demand and profitability, as well as further inflows of southbound and foreign capital. BABA-W (09988) was net purchased for HKD 2.399 billion. CMSC stated that as both domestic and international cloud service providers showcase growth resilience and clearer investment return paths, the value of the domestic and international AI supply chain is shifting towards CSP companies. As the largest cloud service provider in China, Alibaba Cloud is building competitive barriers with its full-stack AI layout, and the capabilities of its new model, Qwen3.8max, have significantly improved, leading to optimism about Alibaba Cloud's competitive strength, growth potential, and profit margins. Semiconductor Manufacturing International Corporation (00981) and Hua Hong Grace Semiconductor (01347) recorded net purchases of HKD 1.18 billion and HKD 184 million, respectively. Citigroup released a research report stating that both SMIC and Hua Hong delivered better-than-expected second-quarter performances, confirming that the recovery in China's wafer foundry industry has expanded from AI accelerators to mature processes and specialty products. The bank raised its earnings per share forecasts for SMIC and Hua Hong for 2026/27 by 10% to 39%, reflecting the improved pricing and capacity utilization outlook. The bank maintains a "Buy" rating on both companies. KB LAMINATES (01888) received net purchases of HKD 887 million. CITIC SEC published a research report highlighting that looking ahead to the second half of 2026, in the PCB sector, the release of new AI production capacity and accelerated inventory purchases by downstream AI clients will create more prominent growth momentum; in the CCL sector, rapid price increases are expected to continue in the short term, and the certainty of maintaining high prices in the medium to long term is also increasing, leading to sustained optimism about further investment opportunities in the sector. GigaDevice Semiconductor Inc. (03986) received net purchases of HKD 569 million. SK Hynix Chairman Choi Tae-won reiterated that there is an explosive growth in storage demand and predicted the most severe "memory shortage" next year. Fubon Securities indicated that the storage industry is currently in a super prosperity cycle driven by AI computing power, showing a high prosperity pattern characterized by tight supply and demand, with both volume and price rising. Z.AI (02513) received net purchases of HKD 501 million. On August 14, Z.AI released its latest flagship model, GLM-5.3. BOCOM INTL's research report noted that in the short term, attention can be given to the updates from Artifical Analysis and Arena.ai regarding the GLM-5.3 rankings, as these updates should reflect a good enhancement in the model's capabilities. Additionally, the company is expected to announce its mid-year performance at the end of August, where further discussion on the current ARR growth rate and the target increase for the year-end ARR is anticipated. Moreover, WUXI BIO (02269), YOFC (06869), and Tencent (00700) received net purchases of HKD 435 million, HKD 291 million, and HKD 49.41 million, respectively.