Hong Kong Stock Concept Tracking | The seasonal review of the Hang Seng Composite Index is about to take effect. Seize opportunities for passive fund allocation and entry (including concept stocks).

According to the quarterly review results announced by Hong Kong Hang Seng Index Company on August 21, as of June 30, 2026, the number of constituent stocks in the Hang Seng Index will increase from 93 to 95, with the inclusion of Hua Hong Grace Semiconductor (01347) and Weichai Power (02338); the number of constituent stocks in the Hang Seng H-Share Index ETF will remain unchanged at 50; the Hang Seng Tech Index will see the addition of ILUVATAR COREX (09903), keeping the number of constituent stocks at 30. All changes will take effect from September 7, 2026. The adjustment of the Hang Seng Composite Index is particularly noteworthy as its inclusion tends to attract passive capital inflows and may facilitate access to the Stock Connect, enhancing liquidity and market attention. Notably, changes to the Hang Seng Biotech Index will be implemented after trading on September 11, 2026 (Friday) and will take effect from September 14, 2026 (Monday). The largest change in the Hang Seng index series' quarterly review is in the Hang Seng Composite Index, with the number of constituent stocks significantly increasing from 534 to 580, adding 61 stocks including MANYCORE TECH (00068) and TONGGUAN GOLD (00340), while removing 15 stocks. Among the newly included stocks, the semiconductor/AI sector has expanded significantly, with AXERA, CREALIGHTS, and MANYCORE TECH all being added to the composite index; Siasun Robot & Automation has been added in bulk for the first time, and HUAYAN ROBOTICS, LDROBOT, and other embodied intelligence stocks have also been added in significant numbers; at the same time, large-cap A+H shares that have been included in the Stock Connect, such as Dongfang Electric Corporation, GigaDevice Semiconductor Inc., and Montage Technology, are now also part of the composite index. The primary advantage of Hong Kong stocks being included in the Hang Seng Composite Index is their ability to attract substantial passive capital inflows. This is the most direct and quantifiable benefit of being added to the index. There are numerous exchange-traded funds (ETFs) and index funds globally that track the Hang Seng Index series, which must purchase the newly included stocks at market prices to replicate index performance. As of the end of June 2026, the total asset management value of passive products tracking the Hang Seng Index series is approximately 106.6 billion USD. Goldman Sachs released a research report stating that the results of the quarterly review announced by the Hang Seng Index Company are expected to generate over 7.2 billion USD in total dual-direction passive capital flow. At the industry level, it is anticipated that the technology hardware and semiconductor, software and services, and internet and media sectors will record the largest passive capital inflows, amounting to approximately 870 million USD, 190 to 230 million USD, and 190 to 230 million USD, respectively. Moreover, the Hang Seng Composite Index serves as a sample pool for Stock Connect investments, meaning its changes will directly impact the investable range of the Stock Connect. Once stocks are included in the Hang Seng Composite Index, the Shanghai and Shenzhen exchanges will correspondingly adjust the investable range of Stock Connect, directly affecting its scope, which is the largest secondary effect of this adjustment. According to the adjustment rules for Stock Connect, being included in the Hang Seng Composite Index is an important basis for becoming a tradable target under Stock Connect. Once officially included in Stock Connect, companies will have direct access to a large pool of mainland investors, and the channel for southbound capital allocation will be opened accordingly. The inflow of southbound capital will enhance the liquidity of stocks, and the Stock Connect significantly contributes to improving stock liquidity and market pricing efficiency. Historical data shows that after being included in the Stock Connect, the proportion of holdings by northbound capital increases by an average of 9 percentage points within three months. CICC previously estimated that considering the requirements for constituent stocks of the Hang Seng Composite Index and additional criteria for inclusion in the Stock Connect (such as a market capitalization of HKD 5 billion or more for small-cap stocks included in the Hang Seng Composite Index, excluding stocks under risk warnings enacted by the exchange, halted listings, or stocks under delisting arrangements; companies with weighted voting rights also need to meet additional conditions such as being listed for over six months for at least 20 trading days and meeting market capitalization and trading volume conditions), their estimation indicates that a total of 49 stocks may meet the inclusion criteria for Stock Connect. The firm emphasized that, during this period, similar to adjustments in the MSCI index, some active funds may still engage in certain arbitrage operations based on the announced results of the adjustments; however, passive funds will choose to adjust their positions on the trading day before the effective date (September 4) to minimize tracking errors. Consequently, related stocks may experience "abnormal" trading volumes, significantly above normal levels, especially in the closing moments of trading. Related concept stocks: SEER TECH (06106): SEER TECH has been included in the Hang Seng Composite Index. As a rare player in the "Siasun Robot & Automation Brain" sector within the Hong Kong stock market, SEER TECH's inclusion is viewed as an important signal of broader recognition for the intelligent Siasun Robot & Automation industry in the capital markets. Public information shows that SEER TECH, centered on the "Siasun Robot & Automation Brain," is a platform company focused on software and algorithms. In the first half of 2026, SEER TECH achieved revenue of CNY 264 million, a year-on-year increase of 67.5%; shipments of the "Siasun Robot & Automation Brain" exceeded 8,000 units, up over 80% year-on-year; new orders exceeded CNY 467 million, with growth exceeding 60% year-on-year. DIAGENS-B (02526): DIAGENS-B has achieved dual inclusionbeing added to both the Hang Seng Composite Index and the Hang Seng Biotech Index. Founded in 2016, the company is a leader in using AI technology to innovate medical diagnostics. In the first half of 2026, the company achieved total revenue of CNY 109 million, a year-on-year increase of 21.0%; its gross margin remained high at 74.1%. Among this, revenue from model services reached CNY 94.5 million, a surge of 101.1% year-on-year, accounting for 86.9% of total revenue and serving as the core driver for growth. GPIXEL (03277): GPIXEL has been included in the Hang Seng Composite Index. The company announced its interim results for the six months ended June 30, 2026, achieving revenue of CNY 641 million, a year-on-year increase of 78.36%; profits attributable to equity holders increased to CNY 250 million, a rise of 197.16%; earnings per share were CNY 0.63. During the reporting period, revenue from area sensors and line sensors increased, primarily due to sales growing from 264,000 units during the same period to 548,000 units during the reporting period, driven by strong demand in downstream industrial imaging applications such as high-end industrial inspection, lithium battery testing, and printed circuit board testing. SIGENERGY Source (06656): SIGENERGY Source has been included in the Hang Seng Composite Index. The company's interim results for the six months ended June 30, 2026, show revenues of CNY 9.87 billion, a year-on-year increase of 261.2%; profits during the period reached CNY 2.43 billion, up 201%; adjusted net profits, according to non-International Financial Reporting Standards, amounted to CNY 2.49 billion, an increase of 135.8% year-on-year. During the reporting period, the company's SiGe storage series products continued to experience rapid growth, generating revenues of CNY 9.3 billion, accounting for 94.2% of total revenue, representing a year-on-year increase of 267.1% and serving as the core driver of the company's business growth. TONGGUAN GOLD (00340): TONGGUAN GOLD has been included in the constituent stocks of the Hang Seng Composite Index. The company announced its performance for the six months ending June 30, 2026, with a revenue of HKD 1.575 billion, an increase of 53.1% year-on-year; profits attributable to equity holders were HKD 523 million, up 52.5% year-on-year; basic earnings per share were HKD 0.0985. The increase in revenue during the period was mainly due to a rise in average selling prices of gold. AXERA (00600): Global leader in AI inference system-on-chip (SoC) supplier AXERA (00600) has been included in the Hang Seng Composite Index. Public information indicates that AXERA Semiconductor Co., Ltd. was established in May 2019 and is a global leader in AI inference system-on-chip (SoC) supply, aiming to build advanced AI computing infrastructure and promote the widespread adoption of AI technology. According to LiveReport's big data prediction, 53 stocks, including AXERA, are expected to formally enter the Stock Connect from September 7, 2026.