On the morning of October 20, Hong Kong's three major stock indices collectively rose, with the Hang Seng Tech Index once surging over 3%. In terms of market performance, tech and internet stocks rose across the board, and automotive stocks rebounded. Regarding mainstream ETFs, the Hang Seng Tech Index ETF (513180), the largest of its kind in the A-share market, followed the index's strong rebound, with its constituent stocks collectively rising. NetEase, NIO, Alibaba, JD Health, Bilibili, SMIC, Baidu Group, among others, led the gains, with Alibaba rising over 4%.

Guotai Junan Futures pointed out in a recent research report that after the emotional boost from the emergence of the DeepSeek large model earlier this year, investors have begun systematically reassessing China's potential to break through in key technological fields. With the increase in the new economy sector (with "tech" elements) within Hong Kong stocks, the positioning of Hong Kong stocks is gradually shifting from "China domestic demand assets" to "China tech assets" (the consensus EPS forecast for the Hang Seng Index has become desensitized to the PPI cycle).

The institution believes that the vast domestic demand potential of the Chinese market, coupled with the strong user stickiness of established internet leaders, positions them well for a second spring in the medium to long term under the new AI+ technological revolution. Leveraging their existing technological reserves and capital advantages, they can enter the field and integrate with their current product matrices. In the medium to long term, as the profitability of Hong Kong's tech giants continues to rise, the valuation gap between Chinese and U.S. tech assets is expected to narrow consistently.

Public information shows that as of October 17, the latest valuation (PE TTM) of the underlying index of the Hang Seng Tech Index ETF (513180) is 22.13 times, located at approximately the 24.11% percentile since the index's launch. This means the current valuation is lower than it has been for over 75% of the time since the index's inception. Looking ahead, Hong Kong's tech sector stands to benefit more from the current industry trend represented by AI. Against the backdrop of the Federal Reserve's interest rate cuts, the回流 of foreign capital may exceed expectations, coupled with sustained increases in southbound capital inflows, the fourth quarter looks promising for the Hang Seng Tech Index. Investors without a Hong Kong Stock Connect account can potentially use the Hang Seng Tech Index ETF (513180) to conveniently invest in China's core AI assets with a single transaction. (Off-exchange Link A/C: 013402/013403).