Daiwa Research: Market Focus Shifts from AI to Cyclical Industries; Attention Shifts to Stimulus-Driven Sectors Post-Lunar New Year
Mutual Funds' Market Activity: In 4Q25, mutual funds in Hong Kong showed a slight decrease in interest, with a shift towards non-ferrous metals and financial sectors, while the shareholding value in top-50 stocks decreased from 25.8% to 25.1%.
Stock Holdings Trends: Despite an increase in the proportion of top 10 stocks from 12.4% to 12.9%, this was attributed to stock price increases rather than accumulation, as fund managers reduced holdings in popular stocks like CATL and Luxshare Precision.
Shift in Investment Focus: The proportion of Hong Kong stocks in fund heavy-weight stocks fell from 17.8% to 16.3%, with TENCENT and BABA-W dropping in rankings among top heavy-weight stocks.
Outlook for 1Q26: As seasonal profit-taking ends, mutual funds are expected to become more risk-tolerant, with AI and metals remaining key investment themes, though interest may shift towards stimulus-related sectors post-Lunar New Year.
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TENCENT's Yuanbao AI Image Generation Sees 30-Fold Daily Increase in Usage
Stock Performance: TENCENT (00700.HK) experienced a decline of 2.922%, with short selling amounting to $2.97 billion and a ratio of 15.248%.
New Feature Launch: The "Yuanbao Party" is set to introduce a new Spring Festival red envelope feature, allowing users to receive cash red envelopes through interactions with Yuanbao.
Increased Usage: Since early February, the usage rate of Yuanbao's AI image generation feature has surged by 30 times, coinciding with the launch of the Spring Festival main venue on the Yuanbao APP.
User Engagement Growth: New users are engaging in over eight rounds of interactive Q&A with Yuanbao daily, leading to an 80% increase in daily usage time.
Report: Qianwen from BABA-W and Yuanbao Red Packet from TENCENT Now Allow Copying in WeChat
Stock Performance: BABA-W (09988.HK) saw a rise of 2.516%, while TENCENT (00700.HK) experienced a decline of 2.922% in their stock prices.
Short Selling Data: BABA-W had short selling of $2.37B with a ratio of 19.556%, while TENCENT's short selling reached $2.97B with a ratio of 15.248%.
WeChat Developments: Chinese media reported that WeChat has now allowed the copying of TENCENT's "Yuanbao" within its platform, following earlier restrictions against both "Qianwen" and "Yuanbao".
Market Context: The changes in WeChat's policies come amid a competitive landscape for AI red packets during the Spring Festival, where both companies were previously facing a blockade.
HKD4.3 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows totaling HKD4.3 billion, while other stocks like BABA-W (09988.HK) and POP MART (09992.HK) experienced notable short selling activity.
Market Activity Overview: TENCENT was the most active stock in both Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, with substantial net inflows, while stocks like XIAOMI-W and AKESO faced the highest net outflows.
Short Selling Statistics: The short selling ratios for TENCENT, BABA-W, and POP MART were 15.248%, 19.556%, and 27.852% respectively, indicating a high level of market speculation.
Overall Market Sentiment: The total Southbound Trading net outflow was HKD0, accounting for 35.67% of the total transaction amount of HKD88.42 billion, reflecting fragile market sentiment according to JPM.
WeChat Halts Qianwen and Yuanbao Red Packet Features, Disrupting Customer Acquisition: Report
WeChat's Restrictions: WeChat has implemented restrictions on sharing AI red packet commands during the Spring Festival, blocking commands from Alibaba's Qianwen and Tencent's Yuanbao AI applications in chats.
User Reactions: Users have reported difficulties in sharing commands for Alibaba's Qianwen on WeChat, leading to discussions about a "business war" between major AI applications.
Short Selling Activity Reaches $47.7B, Representing 22.1% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $47.7 billion, accounting for 22.1% of the eligible securities turnover, slightly down from 23% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include CSOP HS TECH, TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W, with CSOP HS TECH leading at $7.79 billion and a short selling ratio of 66.7%.
CSOP HS TECH Performance: CSOP HS TECH (03033.HK) experienced a decrease of 0.947%, with a significant short selling turnover of $7.79 billion and a high short selling ratio of 66.7%.
Other Notable Stocks: TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W also showed notable short selling activity, with TENCENT at $2.97 billion and a ratio of 15.2%, while MEITUAN-W had a turnover of $961.98 million and a ratio of 26.6%.
<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
TENCENT's Yuanbao AI Image Generation Sees 30-Fold Daily Increase in Usage
Stock Performance: TENCENT (00700.HK) experienced a decline of 2.922%, with short selling amounting to $2.97 billion and a ratio of 15.248%.
New Feature Launch: The "Yuanbao Party" is set to introduce a new Spring Festival red envelope feature, allowing users to receive cash red envelopes through interactions with Yuanbao.
Increased Usage: Since early February, the usage rate of Yuanbao's AI image generation feature has surged by 30 times, coinciding with the launch of the Spring Festival main venue on the Yuanbao APP.
User Engagement Growth: New users are engaging in over eight rounds of interactive Q&A with Yuanbao daily, leading to an 80% increase in daily usage time.
Report: Qianwen from BABA-W and Yuanbao Red Packet from TENCENT Now Allow Copying in WeChat
Stock Performance: BABA-W (09988.HK) saw a rise of 2.516%, while TENCENT (00700.HK) experienced a decline of 2.922% in their stock prices.
Short Selling Data: BABA-W had short selling of $2.37B with a ratio of 19.556%, while TENCENT's short selling reached $2.97B with a ratio of 15.248%.
WeChat Developments: Chinese media reported that WeChat has now allowed the copying of TENCENT's "Yuanbao" within its platform, following earlier restrictions against both "Qianwen" and "Yuanbao".
Market Context: The changes in WeChat's policies come amid a competitive landscape for AI red packets during the Spring Festival, where both companies were previously facing a blockade.
HKD4.3 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows totaling HKD4.3 billion, while other stocks like BABA-W (09988.HK) and POP MART (09992.HK) experienced notable short selling activity.
Market Activity Overview: TENCENT was the most active stock in both Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, with substantial net inflows, while stocks like XIAOMI-W and AKESO faced the highest net outflows.
Short Selling Statistics: The short selling ratios for TENCENT, BABA-W, and POP MART were 15.248%, 19.556%, and 27.852% respectively, indicating a high level of market speculation.
Overall Market Sentiment: The total Southbound Trading net outflow was HKD0, accounting for 35.67% of the total transaction amount of HKD88.42 billion, reflecting fragile market sentiment according to JPM.
WeChat Halts Qianwen and Yuanbao Red Packet Features, Disrupting Customer Acquisition: Report
WeChat's Restrictions: WeChat has implemented restrictions on sharing AI red packet commands during the Spring Festival, blocking commands from Alibaba's Qianwen and Tencent's Yuanbao AI applications in chats.
User Reactions: Users have reported difficulties in sharing commands for Alibaba's Qianwen on WeChat, leading to discussions about a "business war" between major AI applications.
Short Selling Activity Reaches $47.7B, Representing 22.1% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $47.7 billion, accounting for 22.1% of the eligible securities turnover, slightly down from 23% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include CSOP HS TECH, TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W, with CSOP HS TECH leading at $7.79 billion and a short selling ratio of 66.7%.
CSOP HS TECH Performance: CSOP HS TECH (03033.HK) experienced a decrease of 0.947%, with a significant short selling turnover of $7.79 billion and a high short selling ratio of 66.7%.
Other Notable Stocks: TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W also showed notable short selling activity, with TENCENT at $2.97 billion and a ratio of 15.2%, while MEITUAN-W had a turnover of $961.98 million and a ratio of 26.6%.
<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
