After the Hong Kong Stock Connect came into effect, why is DIAGENS-B (02526) considered the most worth-tracking AI stock for southbound funds?

As the September Hong Kong Stock Connect adjustment window approaches, stocks associated with "Connect" concepts have once again become a market focus. However, historical data from past rounds of adjustments indicate that the inflow of stocks into the Hong Kong Stock Connect does not lead to a universal uptrend; instead, it reveals a deep divergence based on fundamentals: some targets benefit from liquidity premiums leading to a reevaluation of value, while others quickly decline once the speculative excitement fades. For southern capital, which has been actively increasing its stakes in the Hong Kong AI sector, the real targets worth tracking in this round of adjustments are never the so-called Connect adjacency concept stocks, but rather companies that simultaneously possess liquidity marginal improvements, fundamental scarcity barriers, and long-term industrial space. Notably, DIAGENS-B (02526), expected to be included in the Hong Kong Stock Connect in this adjustment, stands at the intersection of industrial transformation and funding preferences as the world's first stock related to a large medical imaging model. I. Hong Kong Stock Connect Window Period: The Existence of Anticipated Premiums is Real, Fundamentals are the Long-term Value Anchor The periodic adjustments of Hong Kong Stock Connect stocks are based on the review rules of the Hang Seng Index constituent stocks, combined with institutional arrangements of market capitalization, turnover, liquidity, and other indicators. There exists a time lag from the announcement to the actual implementation, creating a transaction window for market expectation fermentation and advance capital layout. The GF SEC Financial Engineering team published a report on July 10, 2026, titled "Effects and Predictions of Stock Inclusions and Exclusions in the Hong Kong Stock Connect," systematically analyzing a total of 18 adjustment samples from the second half of 2016 to the first half of 2025. The data indicates that stocks excluded from the indices show persistent negative returns; conversely, the average cumulative excess return for stocks added from the assessment date to the effective date is positive, albeit with a corresponding success rate of only 54.2%. This data reveals the essence of the Hong Kong Stock Connect adjustment effect: inclusion may indeed bring about anticipated premiums formed by passive index fund allocations and proactive capital advance layouts, but such effects are unstable and certainly not a guaranteed rule that "inclusion must lead to a rise." The increasing pricing power of southern capital in the Hong Kong stock market makes this divergence even more noteworthy. Guosen's investment research report published in August indicates that as of August 7, the cumulative net inflow of the Hong Kong Stock Connect has reached approximately HKD 5.48 trillion, with a cumulative net inflow of HKD 373.9 billion since 2026 and a recent one-month net inflow of HKD 49.2 billion. Southern capital is no longer a marginal participant in the Hong Kong stock market, but one of the core forces influencing liquidity and pricing logic. However, because the effects of the Hong Kong Stock Connect are widely recognized by the market, speculation around the inclusion expectation concept has intensified. Some stocks have surged significantly before being included due to market capitalization expectations, but their fundamentals did not keep pace, leading to declines following their formal inclusion. Recent reports in the Securities Times regarding Connect concept stocks have outlined the market performance before and after multiple rounds of index adjustments, while citing market participants' opinions that certain targets face issues like concentrated equity and weak operational fundamentals. In other words, the Hong Kong Stock Connect merely opens the trading channel; it is the fundamentals that ultimately determine the central value of a company. For southern capital, the core question when selecting AI stocks for inclusion is never Can it be included? but rather After inclusion, what makes it worthy of long-term holding? II. Southern Capital AI Layout Mainline: Transitioning from Concept Hype to Industrial Realization Since 2026, the allocation of southern capital in the Hong Kong AI sector has shown clear upgrades in its mainline: shifting from initial upstream computing hardware to gradually extending to foundational large models, industry applications, and AI life sciences, with capital preferences transitioning from topic hype to earnings realization. Data on fund flows indicates that AI industry chain targets continue to occupy the top positions for net inflows from southern capital. Statistics from Guosen show that during the week from August 3 to August 7, Z.AI, ILUVATAR COREX, and Ying Silicon Intelligence were the top three for net inflows from the Hong Kong Stock Connect, with net inflow amounts of approximately HKD 2.0 billion, HKD 580 million, and HKD 450 million, respectively. Moreover, MiniMax, which was just included in the Hong Kong Stock Connect in August, received over HKD 10.6 billion in net buying from southern capital in a single month, surpassing purchases of Alibaba and TENCENT, highlighting the strong interest of southern capital in high-quality AI stocks. An analysis of the AI targets currently focused on by southern capital reveals that their commonality is not merely having an AI concept, but that artificial intelligence has been deeply integrated into their core business processes, beginning to form verifiable commercial value. Among these, Z.AI and MiniMax represent commercial exploration of universal large models, while XTALPI and Ying Silicon Intelligence exemplify the application of AI in life sciences. According to company announcements, Deshi Technology has been included in 23 Hang Seng Index series, with related index adjustments set to take effect in batches on September 7 and 14. Deshi Technology fills a crucial gap in the industrialization of medical imaging AI. Unlike universal large model companies that focus on consumer traffic or AI pharmaceutical companies concentrating on laboratory scenarios, Deshi Technology targets the medical imaging vertical, which has clear clinical demands, stringent regulatory barriers, and a mature hospital payment system, carving out a differentiated industrialization path for AI. For southern capital currently scouting for high-quality assets along the AI industry chain, Deshi Technology offers a fresh, underappreciated option in a niche market. III. The Scarcity of Deshi Technology: An Industrialization Sample Built on Multiple High Barriers Deshi Technology's scarcity stems not only from its title as the first global medical imaging large model stock but from its accumulation of four distinct barriers: commercial income from models, platform production capabilities, breakthroughs in regulatory access, and the long-term extendability of AI for Science (AI4S), forming a comprehensive advantage that is difficult for other targets to replicate. First, model service income has realized ahead of others, validating the path to commercialization for large models. Mid-2026 performance reports indicate that in the first half of the year, the company achieved total revenue of HKD 108.7 million, a year-on-year increase of 21.0%; core model service revenue reached HKD 94.5 million, a substantial year-on-year growth of 101.1%, accounting for 86.9% of total revenue; the gross margin remained high at 74.1%. The significance of this data lies in the fact that the large medical imaging model has transitioned from a technical concept in the lab to a commercial revenue source that can be independently measured and sustainably grown. The companys revenue structure is accelerating its shift from traditional software and hardware sales towards model training, deployment, and value-added services, with continuously improving revenue quality. Second, the industrialized platform system addresses the scalability challenges of medical AI. Deshi Technology has built a complete foundation large model + industrialized platform system rather than a single disease AI diagnostic model: the underlying core is the iMedImage medical imaging foundation large model, with a parameter scale of 104 billion, supporting 19 types of medical imaging data; the upper layer integrates data governance, intelligent annotation, model training, evaluation, release, and application feedback along the entire chain through the iMedLoop platform. As of June 2026, the platform has accumulated approximately 28.95 million labeled samples, gathering over 3,000 professional annotators; it has collaborated with 99 partner hospitals to advance 158 model projects, covering 43 human organs or application sites and 61 disease areas. The core value of these 158 projects is not in the sheer quantity but in the validation of the reusability of foundational capabilities. In response to new clinical demands, there is no need to start data collection and model training from scratch; instead, rapid iterations can be achieved based on foundational abilities, forming a positive closed loop of data model clinical. This is precisely what differentiates platform companies from single-model companies: the latter can only solve one problem, while the former can continuously and efficiently address a category of issues. Third, the first global Class III certification establishes a core barrier to regulatory compliance. The commercialization of medical AI is not only a technical issue but also requires overcoming regulatory hurdles. In May 2026, Deshi Technology's AI AutoVision chromosome karyotype image-assisted diagnostic software obtained the Class III medical device registration certificate from the National Medical Products Administration. According to the company, this is the worlds first Class III medical device registration approval based on large model technology for medical imaging, marking formal clinical compliance verification of large model technology at a high level. Currently, the companys products and services cover over 400 medical institutions; based on data from Frost & Sullivan, the company holds about 30.6% market share in the chromosome karyotype analysis segment, ranking first nationwide. From model training to regulatory approval to clinical commercialization, Deshi Technology has successfully navigated the most critical commercialization pathway in medical AI, a capability that is extremely rare among domestic AI medical companies. Finally, the extendability of AI4S opens up long-term value space. Deshi Technology's value extends far beyond being a mere auxiliary diagnostic tool; it lies in its industrial imagination regarding AI for Science (AI4S). The core of AI4S is to deeply integrate artificial intelligence into the full process of scientific discovery, and medical imaging is one of the most grounded applications for AI4S. Imaging data carries vast biological information about the occurrence, development, and treatment response of diseases and serves as a core carrier for medical research. According to company disclosures, Deshi Technology has established deep cooperation with The Hong Kong Polytechnic University to jointly explore medical imaging analysis, foundational models in healthcare, and automation in research processes, facilitating the upgrade of AI from a diagnostic tool to a research infrastructure. Leveraging platform capabilities, real-world questions posed by clinicians can be quickly translated into model iteration directions, while research findings can be rapidly converted into clinical products, ultimately forming a reciprocal promotion between clinical needs and technological innovations. Conclusion In summary, the inclusion in the Hong Kong Stock Connect represents an opportunity for value discovery for Deshi Technology. The entry of southern capital will enhance the liquidity and market attention on the companys stock, allowing more investors to recognize the industrial value of medical imaging AI. However, what truly supports the companys long-term valuation has never been the label of "inclusion," but rather the continuous growth of model service income, the ongoing validation of platform capabilities, and the sustained expansion of clinical and regulatory layouts. For southern capital in search of high-quality AI assets, Deshi Technology offers a rare sample: it is neither a purely conceptual AI company nor a traditional medical equipment manufacturer, but one of the few globally to have successfully navigated the entire link from "foundation large model data platform regulatory products clinical network model service income." As the Hong Kong Stock Connect officially takes effect, the company is expected to enter the investment radar of more southern capital, becoming a key stock in the Hong Kong AI sector that combines fundamental support with long-term growth potential.