On March 20, Hong Kong's three major indices fell collectively, with leading technology stocks experiencing significant declines. Alibaba-W dropped over 6% following its earnings report, as both revenue and profit for the third fiscal quarter fell short of expectations. Tencent Holdings, which fell more than 6% yesterday, declined nearly 1% today, while Xiaomi Group-W plunged over 8%. The Hong Kong Internet ETF (513770), a core tool for accessing Hong Kong's AI sector, opened lower and continued to fall, closing down 3.74% and hitting a new low since the recent adjustment period.

The market pullback is attributed to two main factors: geopolitical tensions suppressing risk appetite, leading investors to shift toward defensive assets, and concerns about profit margins being squeezed by AI investments after heavyweight leaders Tencent Holdings and Alibaba reported their results.

However, institutions remain optimistic about the outlook. Everbright Securities stated that Hong Kong's technology sector has entered a strategic allocation phase with both high probability of success and attractive risk-reward ratios. The triple-bottom characteristics of "oversold valuation discounts + contrarian capital inflows + improving fundamentals" are becoming increasingly clear, potentially creating a rare "golden window for positioning."

Galaxy Securities also noted that while short-term market sentiment may continue to digest disturbances, medium- to long-term supportive factors remain unchanged. In terms of allocation, the technology sector remains a key long-term investment theme, with AI-related concerns instead creating buying opportunities. The rise of China's AI capabilities is expected to boost market confidence.

Regarding future sector opportunities, surging token usage is driving up cloud product prices, and internet leaders possess stronger commercial realization capabilities during the AI cycle. The current valuation of Hong Kong's internet sector, at a PE (TTM) of only 22 times, is near the 10th percentile of its five-year range—significantly lower than tech valuations in U.S. and A-share markets—highlighting substantial safety margins.

To capture opportunities in the anticipated 2026 AI commercialization wave, focus on core AI tools in Hong Kong. The Hong Kong Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) passively track the CSI Hong Kong Internet Index, with top holdings including Alibaba-W, Tencent Holdings, Xiaomi Group-W, Kuaishou-W, and Bilibili-W, among other tech giants and AI application companies across sectors. The ETF offers significant leadership advantages, T+0 trading, and strong liquidity.

For investors bullish on Hong Kong tech but seeking to reduce volatility, consider the first-of-its-kind Hong Kong Large Cap 30 ETF (520560), which employs a "tech + dividends" barbell strategy. Its portfolio includes high-growth tech stocks like Alibaba and Tencent Holdings, alongside stable high-dividend names such as China Construction Bank and Ping An Insurance, making it an ideal long-term foundational holding for Hong Kong exposure.

Note: Recent market volatility may be elevated, and short-term gains or losses do not indicate future performance. Investors should make rational decisions based on their financial situation and risk tolerance, with careful attention to position sizing and risk management.

Data source: Shanghai and Shenzhen stock exchanges.

Institutional views sourced from: Everbright Securities report dated March 11, 2026, "OpenClaw Ushers in New Agent Era, Hong Kong Tech Returns to AI Growth Trend"; Galaxy Securities report dated March 2, 2026, "Grasping Structural Opportunities in Hong Kong Amid the 15th Five-Year Plan."

ETF fee note: Subscription or redemption agents may charge a commission of up to 0.5%, including fees levied by exchanges and registration institutions. Feeder fund fees: Huabao CSI Hong Kong Internet ETF feeder fund (Class A) charges a front-end subscription fee of 1% for amounts below RMB 1 million, 0.6% for RMB 1–2 million, and a flat RMB 1,000 for amounts above RMB 2 million. Redemption fees are 1.5% for holdings under 7 days and 0% for 7 days or more; no sales service fee is charged. The Class C feeder fund charges no subscription fee, with redemption fees of 1.5% for holdings under 7 days and 0% for 7 days or more, plus a 0.3% sales service fee.

Risk disclosure: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Internet Index, which has a base date of December 30, 2016, and was launched on January 11, 2021. Index constituents are adjusted per its methodology. Constituent descriptions are for illustrative purposes only and do not constitute investment advice or reflect the fund manager’s holdings or trades. The fund manager rates this fund as R4 (medium-high risk), suitable for aggressive (C4) or higher risk-profile investors. All information provided is for reference only; investors are solely responsible for their decisions. Views, analyses, and forecasts do not constitute investment advice, and no liability is accepted for losses arising from their use. Past performance of other funds managed by the fund manager does not guarantee future results. Fund investments carry risks; invest with caution.

MACD golden cross signals have formed, with several stocks showing positive momentum.