Hang Seng Indexes Company announces consultation conclusions on the compilation methodology of the Hang Seng TECH Index

Hang Seng Indexes Company today (7 October) announced the consultation conclusions on the proposed revisions to the compilation methodology of the Hang Seng TECH Index. After considering views from different market segments and following review and deliberation by the Hang Seng Index Advisory Committee, Hang Seng Indexes Company announced that it will implement six revisions in the following two key areas: 1) broadening technology theme coverage; and 2) introducing a grouping-based stock selection mechanism. 1) Broadening technology theme coverage Removing industry requirements Adopting the previously proposed revisions, the requirement that eligible candidates must belong to five specified industries under the Hang Seng Industry Classification System will be removed. Revising the six technology themes Adopting the previously proposed revisions, the existing themes will be consolidated and expanded, and a new frontier technology theme will be added. The revised six technology themes are: 1) Digital platforms and solutions; 2) Artificial intelligence; 3) Advanced hardware; 4) Siasun Robot&Automation and automation; 5) Cloud; and 6) Frontier technology. Expanding technology sub-themes from 16 to 24 Adopting the previously proposed revisions, the number of technology sub-themes will be increased from 16 to 24 to align with the revisions to the above six technology themes. 2) Introducing a grouping-based stock selection mechanism Setting the selection universe to constituents of the Hang Seng Composite LargeCap and MidCap Index Adopting the previously proposed revisions, the selection universe will be revised from main board-listed companies to constituents of the Hang Seng Composite LargeCap and MidCap Index. Adopting a two-group stock selection mechanism Adjustments have been made based on the previously proposed revisions, adopting a two-group stock selection mechanism, using market capitalisation ranking and revenue growth ranking as the selection criteria respectively. Non-existing constituents must additionally meet a minimum average daily turnover of HK$100 million over the past three months; constituents selected based on revenue growth ranking must have recorded a minimum annual revenue of HK$500 million in each of the most recent two consecutive financial years. Increasing the number of constituents from 30 to 50 Adopting the previously proposed revisions, the number of constituents will be increased from 30 to 50, of which the top 40 will be selected based on market capitalisation ranking, and the remaining 10 will be selected based on revenue growth ranking over the past twelve months. The above revisions will be implemented in the index review for the period ended 30 September 2026, and will take effect in the index rebalancing in December 2026. Hang Seng Indexes Company launched a market consultation on the proposed revisions in August this year for approximately one month, and received responses from industry stakeholders in Hong Kong, the Mainland and other regions, covering asset management companies, traders and market makers, structured product issuers, corporates and industry organisations, among others. The consultation results showed that each proposal received support from over 80% of responding parties.