Northbound funds | Northbound net selling reached RMB3.359 billion; SMIC and Hua Hong were sold off; northbound funds aggressively bought Ping An Insurance (02318) throughout the day, totaling HK$285 million.

On October 29 in the Hong Kong stock market, northbound trading recorded a net sell of HK$3.359 billion. Among this, Stock Connect (Shanghai) recorded a net buy of HK$782 million, while Stock Connect (Shenzhen) recorded a net sell of HK$4.141 billion. The stocks with the largest net buys by northbound funds were Ping An Insurance (02318), Z.AI (02513), and GenScript Biotech (01548). The stocks with the largest net sells by northbound funds were Semiconductor Manufacturing International Corporation (00981), BABA-W (09988), and CNOOC (00883). Active stocks via Stock Connect (Shanghai) Active stocks via Stock Connect (Shenzhen) Ping An Insurance (02318) received a net buy of HK$285 million. Ping An Insurance disclosed its third-quarter report on the evening of October 28: attributable operating profit for the first three quarters was RMB125.905 billion, up 8.3% year on year, with core profitability excluding investment volatility still improving. Zhongtai's chief non-bank financial analyst said that for the insurance sector, in the short term, selling pressure on the funding side is easing, while in the medium term, "deposit migration + continued 'slow bull'" will boost value and profit growth. Z.AI (02513) received a net buy of HK$222 million. A CLSA research report noted that Anthropic's S-1 filing validates the economics of frontier models, showing a diversified customer base, an 85% gross margin, and positive free cash flow, with revenue growing faster than compute costs; however, the main risk remains whether the revenue growth curve can match massive compute commitments. The report said that for Chinese large models, compute constraints increase the value of architecture and inference innovation, while Anthropic's listing may establish a valuation anchor. GenScript Biotech (01548) received a net buy of HK$181 million. According to the latest update on Anthropic's official website, the company's life sciences team has established deep research collaborations with six institutions and acquired Mithril Medicine, a biotechnology company operated by a single person, directly entering drug development. Sinolink noted that the AI pharmaceutical market has broad space and will accelerate the expansion of wet-lab demand. BRAINAURORA-B (06681) received a net buy of HK$28.6333 million. The company recently announced that its self-developed cognitive function assessment software for depression has been approved for a Class II medical device registration certificate, becoming China's first registered medical device product for "depression cognitive assessment." The stock surged and then pulled back today, with an amplitude of more than 40%. Semiconductor stocks saw net sells, with Semiconductor Manufacturing International Corporation (00981) net sold HK$825 million and Hua Hong Grace Semiconductor (01347) net sold HK$320 million. Google parent Alphabet's third-quarter revenue and profit both missed expectations, and even with some "discipline" in capital expenditure, free cash flow was still negative US$9.1 billion. Market doubts are rising over whether massive AI capital investment can substantive returns. In addition, Samsung Electronics announced detailed third-quarter 2026 financial results on October 29, with revenue of KRW195.25 trillion, up 127% year on year, but net profit of KRW75.21 trillion was below the market estimate of KRW89.06 trillion. Hong Kong internet stocks diverged: TENCENT (00700) received a net buy of HK$146 million, while BABA-W (09988) was net sold HK$778 million. CICC's Liu Gang noted that Hong Kong stocks, especially the Hang Seng Tech Index, have recently pulled back rapidly again, with Hang Seng Tech basically returning to the starting point of the "924" rally two years ago in 2024. Weak household credit cycles and insufficient fiscal support for households are the fundamental reasons for the continued pressure on Hong Kong stocks; recently, overseas interest rates, AI trading volatility, and negative feedback on the funding side have further amplified the adjustment. In the very short term, a technical rebound would not be surprising; in the very long term, the long-term valuations of some leading companies are gradually becoming attractive, but in the medium term they still mostly reflect odds-based value, and reversing the downturn still requires household credit repair. Optical communication stocks diverged: Zhongji Innolight (03308) received a net buy of HK$102 million, while YOFC (06869) was net sold HK$81.8744 million. According to reports, Marvell Technology is in advanced talks to acquire optical component maker Lumentum, with a deal potentially announced as early as next week. The first third-quarter report from the "Yizhongtian" group was released: Suzhou TFC Optical Communication's third-quarter revenue was RMB1.923 billion, up 31.50% year on year; net profit was RMB879 million, up 55.30% year on year. Institutional commentary believed that Suzhou TFC Optical Communication's Q3 results were slightly below expectations, with the market generally expecting Q3 net profit above RMB900 million. In addition, KB LAMINATES (01888) received a net buy of HK$133 million, CNOOC (00883) was net sold HK$587 million, China Construction Bank Corporation (00939) was net sold HK$348 million, and 160 HEALTH (02656) received a net buy of HK$40.5433 million.