CICC Hong Kong Stock Connect and HSI Adjustment Preview: ZIJIN GOLD INTL (02259) and others expected to be included in the HSI; CAMSENSE (06802) and others expected to enter Stock Connect

CICC Release Research Report: Hang Seng Index Company will announce the official results of the Hang Seng Family of Indexes review after market close on Friday, November 20, 2026, and will implement them officially on Monday, December 7. Based on the Hang Seng Index adjustment methodology, and drawing on the validation of the understanding of subjective adjustment criteria through multiple previous actual adjustment results, the calculations show that ZIJIN GOLD INTL (02259), KB LAMINATES (01888), SWIREPROPERTIES (01972), AKESO (09926), XPENG-W, Z.AI and YUM CHINA rank among those meeting the inclusion criteria and are also at the top of the potential candidate list. The calculation prioritizes market cap ranking, then comprehensively incorporates factors such as sector representativeness and coverage. During this period, similar to MSCI index adjustments, some active funds may still engage in certain arbitrage operations based on the announced adjustment results, but passive funds will choose to rebalance on the trading day before the effective date (i.e., December 4) to minimize tracking error to the greatest extent possible. At that time, the trading volume of the relevant stocks may show "abnormal volume spikes" far exceeding normal levels, especially in the closing session. CICC's main views are as follows: After market close on Friday, November 20, 2026 (Beijing time), Hang Seng Index Company will announce the annual review results of the Hang Seng Family of Indexes (the review cutoff date is September 30, 2026), covering the Hang Seng Index, H-share Index, Hang Seng Tech Index and other major flagship Hong Kong stock indices, as well as the Hang Seng Composite Index, which directly affects the Stock Connect investment universe. Given the large scale of passive funds tracking Hong Kong flagship indices (based on Bloomberg and Wind statistics, ETFs tracking the Hang Seng Index, H-share Index and Hang Seng Tech Index amount to approximately US$23.78 billion, US$6.20 billion and US$37.10 billion, respectively), potential constituent changes and corresponding fund flows deserve close attention. Based on currently available data, the potential adjustments are predicted as follows for investors' reference. Hang Seng Index adjustment: ZIJIN GOLD INTL, KB LAMINATES and others meet inclusion criteria Based on the Hang Seng Index adjustment methodology, and drawing on the validation of the understanding of subjective adjustment criteria through multiple previous actual adjustment results, the calculations show that ZIJIN GOLD INTL, KB LAMINATES, SWIREPROPERTIES, AKESO, XPENG-W, Z.AI and YUM CHINA rank among those meeting the inclusion criteria and are also at the top of the potential candidate list. The calculation prioritizes market cap ranking, then comprehensively incorporates factors such as sector representativeness and coverage. Chart 2 calculates the possible weights and fund flows for the corresponding stocks. However, it should be specifically noted that historical experience shows that actual results often differ from this screening ranking based on quantitative criteria. For example, YUM CHINA and ZIJIN GOLD INTL have ranked at the top in several past predictions but ultimately were not included. This is mainly because some of the Hang Seng Index inclusion criteria lack explanation or quantitative basis, such as sector and listing venue representativeness, and involve subjective judgment factors. Hang Seng Tech adjustment: Major overhaul of Hang Seng Tech, adding 20 stocks; Contemporary Amperex Technology, YOFC and Victory Giant Technology expected to be included Hang Seng Index Company announced on October 7, 2026 the final proposal for revising the compilation methodology of the Hang Seng Tech Index, which has become the most closely watched part of this Hang Seng Family of Indexes adjustment. A detailed summary and analysis of the main contents of this Hang Seng Tech revision, possible inclusion candidates and potential impacts are provided. Based on the revised stock selection rules and buffer arrangements, and using data as of September 30, the calculations show: 1) The free-float market cap threshold for selection in the market cap group is approximately HK$40 billion or above; 2) The revenue growth group is ranked by TTM growth rate of revenue disclosed as of September 30, taking the top 10; the revenue growth rate of selected stocks is approximately 35% or above, and all satisfy additional requirements such as revenue of no less than HK$500 million in the most recent two fiscal years (FY2024 and FY2025). The potential inclusion candidates are: Market cap group (10 stocks): SHEIN, Contemporary Amperex Technology, KB LAMINATES, GDS, YOFC, ASMPT, BIREN TECH, AAC TECH, UBTECH ROBOTICS and XTALPI; Revenue growth group (10 stocks): XUNCE, TIME INTERCON, HAIZHI TECH GP, INNOSCIENCE, Victory Giant Technology, UNISOUND, HESAI-W, Montage Technology, KINGSOFT CLOUD and GEEKPLUS-W. It should be noted that this prediction is the first since the announcement of the Hang Seng Tech revised proposal, and the specific quantitative criteria and calculation methods may have room for further confirmation and optimization. The final list is subject to the review results announced by Hang Seng Index Company. Stock Connect adjustment: CAMSENSE and LIGENT expected to be included in Stock Connect on December 7; Robotechnik Intelligent Technology, Shenzhen Transsion Holdings Co., Ltd. and LYGEND RESOURCE will also be included after the price stabilization period ends Unlike other Hang Seng indices, the Hang Seng Composite Index is adjusted semi-annually, and this time only a partial small-scale adjustment will be made. Eligible new listed companies (such as those newly listed in Q1 and Q3 that meet the inclusion criteria for the Hang Seng Composite LargeCap and MidCap indices) can be included this time. Based on the above conditions, while comprehensively considering other additional conditions for possible inclusion in Stock Connect, the calculations show that CAMSENSE and LIGENT are expected to meet the Shanghai-Hong Kong Stock Connect inclusion criteria and be included in Stock Connect on December 7. In addition, Robotechnik Intelligent Technology and Shenzhen Transsion Holdings Co., Ltd., which listed in Hong Kong on September 29 and October 15, 2026, respectively, due to their A+H dual-listing nature, will also be directly included in Stock Connect trading after the 30-day price stabilization period ends in the coming days, with inclusion expected around October 26 and November 13. Meanwhile, LYGEND RESOURCE listed in A-shares on September 30 and is expected to be included in Stock Connect around October 21 after satisfying the 10-trading-day requirement. Timetable: Announced after market close on November 20, implemented on December 7; Stock Connect eligible securities adjusted accordingly In terms of timing, Hang Seng Index Company will announce the official results of the Hang Seng Family of Indexes adjustment after market close on Friday, November 20, 2026, and will implement them officially on Monday, December 7. After the index adjustment takes effect on December 7, the Shanghai and Shenzhen Stock Exchanges will subsequently adjust the investable universe of Shanghai-Shenzhen-Hong Kong Stock Connect accordingly (specific timing subject to exchange announcements). During this period, similar to MSCI index adjustments, some active funds may still engage in certain arbitrage operations based on the announced adjustment results, but passive funds will choose to rebalance on the trading day before the effective date (i.e., December 4) to minimize tracking error to the greatest extent possible. At that time, the trading volume of the relevant stocks may show "abnormal volume spikes" far exceeding normal levels, especially in the closing session. Chart 1: ETF asset scale tracking the Hang Seng Index, Hang Seng China Enterprises Index and Hang Seng Tech Index Note: Data as of October 16, 2026 Source: Bloomberg, CICC Research Department Chart 2: Comparison of Hang Seng Tech Index compilation rules Source: Hang Seng Index Company, CICC Research Department Chart 3: Hang Seng Composite Index constituent adjustment rules Note: Specific rules subject to Hang Seng Index Company announcements Source: Hang Seng Index Company, CICC Research Department Chart 4: Stock Connect screening process and rules Source: Hang Seng Index Company, Shenzhen Stock Exchange, Shanghai Stock Exchange, CICC Research Department