Duan Yongping copied the bottom of Tencent (00700), undervaluation of Hong Kong stocks attracted an influx of institutions to sweep away goods

The Zhitong Finance App learned that today, well-known investor Duan Yongping suddenly posted an article saying that he will not be snowballing for quite some time. Prior to that, he had expressed his optimism about the market many times, revealing that he had scammed companies such as Tencent (00700). Moreover, recently large amounts of capital have poured into the Hong Kong stock market through ETFs and other methods, and many ETF shares have frequently reached record highs. A number of institutions said that after recent adjustments, the valuation level of Hong Kong stocks is already at a historically low level, showing long-term allocation value.

Just before Duan Yongping announced his “departure,” Duan Yongping had revealed his views and operations on the market. In the Hong Kong stock market, he is more optimistic about Tencent. On April 8, he expressed his support for Tencent by selling a put through options. Since this year, Duan Yongping has taken long moves in Hong Kong stocks, either by directly buying stocks or by selling put options.

In addition to Duan Yongping, southbound capital also continues to flow into Hong Kong stocks. Since this year, the flow of southbound capital into the Hong Kong stock market has accelerated. Previously, net purchases had been maintained for 13 consecutive trading days. On April 9, the net purchase of Hong Kong stocks by Southbound Capital exceeded HK$35.5 billion, continuing the strong inflow trend.

As an important tool for allocating capital to Hong Kong stocks, ETFs related to Hong Kong stocks are popular.

Looking at the Hong Kong Stock Technology ETF (513020), the ETF mainly tracks the China Securities Hong Kong Stock Connect Technology Index. The constituent stocks cover technology leaders such as Internet+biomedicine+new energy vehicles. Weighted stocks include Internet leaders such as Alibaba, Xiaomi Group, and Tencent Holdings. On April 10, capital also flowed into Hong Kong stocks through this ETF. The Hong Kong Stock Technology ETF surged more than 6.5%, and intraday turnover continued to expand.

Furthermore, the Hang Seng Index ETF (513600) also rose 3.95%, ranking first in its category in terms of net capital inflows. Against the backdrop of continued capital inflows, the shares of many Hong Kong equity-related ETFs reached record highs.

Among them, many ETFs related to Hong Kong stocks continue to be released, and there are obvious signs that large capital is being swept away. Specifically, the morning turnover of the Huaxia Hang Seng Technology Index ETF was 8.844 billion yuan, and the turnover of the Huatai Berry Hang Seng Technology ETF also exceeded 8.7 billion yuan.

Guojin Securities said that Hong Kong stocks are leading the global equity market due to two factors. One is that Hong Kong stocks have a high “AI content” and AI-related technology assets are more “recognizable” than A-shares; second, Hong Kong stocks have also seen “real” improvements in liquidity and risk premiums on the denominator side of Hong Kong stocks, and the “spillover” of capital after a significant recovery in domestic M1 has driven a large influx of southbound capital into the Hong Kong market. Combined with the stronger “momentum effect” of Hong Kong stocks themselves, this has also formed positive feedback on incremental capital. Judging from the structure of capital flows, technology assets have been unanimously favored by domestic and foreign investors. In particular, the former has seen a significant inflow.

CICC said that the continued inflow of capital to the south may come from active personal and private equity, as well as the continued allocation of public and insurance capital. CICC believes that the recent rapid rise in net capital inflows into Hong Kong stock ETFs that can be invested in mainland Hong Kong stocks is partly due to individual investors; recent abnormal fluctuations in the market value of some small and medium market capitals on the Hong Kong Stock Connect are similar to the performance characteristics of some A-share small to medium markets, indicating that the participation of floating capital and private equity capital is not ruled out, including the rapid switching of funds previously invested in US stocks to Hong Kong stocks; some insurance capital is also increasing the technology sector slightly; the mainland's public offering also clearly increased the allocation of Hong Kong technology stocks.

Specifically, out of the top 20 individual stocks in public offering, Hong Kong Stock Exchange held 6 seats, with a total increase of 52.211 billion yuan. Among them, Tencent Holdings is the leading Hong Kong stock market with a long-term heavy public offering, highlighting the appeal of leading Internet companies in valuation repair.

According to the latest research report by Shen Wan Hongyuan's strategy team, at a time when the market is undergoing drastic adjustments, Chinese assets have once again returned to a valuation position with a good cost ratio compared to the world. The market may face an important medium- to long-term cyclical low, and will continue to be optimistic about medium-term investment opportunities after the subsequent correction in Hong Kong stocks.