Hong Kong Internet Sector Rebounds Strongly, HK Internet ETF Cathay (513720) Perfect Timing to Position

Keywords: HK Market, Internet Sector, ETF Investment, Valuation Recovery, Artificial Intelligence

Introduction: HK Market Sees Broad Rally, Tech Sector Leads

On July 16, the Hong Kong stock market experienced a long-awaited broad rally, with the Hang Seng Index closing up 1.50% at 25,050.72 points, showing a clear recovery in market sentiment. Against this overall positive environment, the tech sector performed particularly well, becoming the core force leading this rebound. Among them, the HK Internet ETF Cathay (513720), focusing on HK internet leaders, performed strongly, closing up 3.41% with a turnover of RMB 110 million, actively traded, highlighting high market attention to HK internet core assets.

Notably, this ETF has risen for two consecutive days, showing strong rebound momentum in recent market conditions. The product also supports T+0 trading, providing investors with higher trading flexibility. Below is a comparison of the Hang Seng Index and HK Internet ETF Cathay's performance on that day:

1. Strong Rebound Momentum of HK Internet Sector

Core Assets Gathered, Solid Fundamentals

The HK internet sector hosts a group of Chinese tech enterprises with the strongest innovation vitality and global competitiveness. These companies dominate in e-commerce, social media, digital entertainment, artificial intelligence, and other fields, boasting huge user bases, deep technical accumulation, and strong business model moats. In the long run, the commercial value of these core assets has not fundamentally changed due to short-term market fluctuations.

Specifically, HK internet leaders have built hard-to-replicate competitive advantages in their respective tracks. In e-commerce, top platforms continuously consolidate market position through efficient supply chains and huge user networks; in social media, platforms have formed strong user stickiness through social relationship chains and content ecosystems; in digital entertainment, high-quality content supply and technological innovation continuously expand industry boundaries; in artificial intelligence, technical accumulation and scenario-based applications are accelerating commercialization.

Valuation Risk Fully Released, Entry Window Appears

After previous deep adjustments, the sector's valuation risk has been fully released. From a historical valuation percentile perspective, the HK internet sector has entered a reasonable valuation range after a sharp correction. With the stabilization of the macroeconomic environment and normalization of industry regulatory policies, the long-term investment value of these core assets is becoming increasingly prominent.

Based on current data, the P/E ratio of the CSI Hong Kong Stock Connect Internet Index is 19.59, located in the 20% to 80% percentile range of the past year, indicating that the current valuation is at a normal level with some margin of safety. This means that after a round of valuation contraction, the overall risk of the sector has been relatively fully released, with limited downside in the future and gradually accumulating upside potential.

2. New AI Cycle: Second Growth Curve for Internet Giants

Technological Breakthroughs Reshape Commercial Value

Continuous breakthroughs in new technologies such as artificial intelligence are expected to open new growth curves for internet giants and reshape their commercial value. Currently, AI technologies represented by large language models are profoundly changing the underlying logic of the internet industry. From content generation to intelligent recommendations, from customer service to ad placements, AI technology is penetrating every aspect of internet business, bringing efficiency improvements and cost optimization to platform enterprises.

For HK internet leaders, the application of AI technology can not only consolidate their existing business advantages but also potentially open up entirely new revenue streams. For example, in cloud computing, demand for AI model training and reasoning is becoming a new growth engine; in advertising, AI-driven precision marketing is improving ad placement efficiency; in e-commerce, AI anchors and intelligent customer service are reducing operating costs and enhancing user experience.

Investment Theme: Seizing New Opportunities Driven by Technology

At the current juncture, AI thematic investment has become a market consensus. As an important application scenario and commercialization carrier of AI technology, the HK internet sector is expected to continuously benefit from this round of technological change. For investors, focusing on HK internet core assets means laying out the core track of China's AI industrialization.

3. HK Internet ETF Cathay (513720): One-Stop Allocation Tool

Closely Tracking Index, Comprehensive Coverage of Core Targets

The HK Internet ETF Cathay (513720) closely tracks the CSI Hong Kong Stock Connect Internet Index, which selects 30 listed companies involved in internet-related businesses from the Hong Kong Stock Connect universe as index samples, reflecting the overall performance of internet-themed listed companies in the HK Stock Connect. Through this ETF, investors can conveniently allocate to HK internet core assets in one go, effectively diversifying the risk of individual stock investments.

From the index composition, the index covers major leaders in the HK internet field, including representative companies from e-commerce, social networking, entertainment, cloud computing, and other sub-sectors. This comprehensive coverage enables the ETF to effectively capture the overall sector movement and avoid risks from biased stock selection.

Flexible Trading Mechanism, T+0 Improves Efficiency

The HK Internet ETF Cathay (513720) supports T+0 trading, offering investors higher trading flexibility. This means investors can complete buy and sell operations within the same trading day, effectively improving capital efficiency and allowing timely position adjustments based on market changes. In volatile market environments, this trading mechanism is particularly advantageous.

Valuation Safety Margin: Perfect Timing to Position

From a valuation perspective, the current P/E ratio of the CSI Hong Kong Stock Connect Internet Index is within the normal range of the past year, neither significantly overvalued nor in extreme undervaluation territory. This reasonable valuation level provides a good entry point for investors. At the same time, considering solid sector fundamentals, the start of a technology upgrade cycle, and a clearer policy environment, the current juncture may be a good window to position in HK internet core assets.

Conclusion: Rational View of Opportunities, Prudent Risk Management

The HK internet sector stands at a new starting point. On one hand, after previous adjustments, valuation pressure has been fully released; on the other hand, the AI technology revolution is injecting new growth momentum into the industry. As a tool product tracking the CSI Hong Kong Stock Connect Internet Index, the HK Internet ETF Cathay (513720) provides investors with a convenient way to allocate to HK internet core assets.

However, investors should be reminded that short-term market fluctuations are uncertain, and past performance of the index does not represent future returns. Any investment decision should be based on one's own risk tolerance and investment objectives, fully understand product characteristics, and carefully assess risks. While grasping the sector's recovery rally, it is also necessary to remain rational and manage risks and asset allocation well.

Risk Warning

The individual stocks mentioned are only for industry event analysis and do not constitute any stock recommendation or investment advice. Short-term fluctuations of indices etc. are for reference only, do not represent their future performance, and do not constitute a commitment or guarantee of fund performance. Views may change with market conditions and do not constitute investment advice or commitments. The risk-return characteristics of the funds mentioned vary; investors are advised to carefully read fund legal documents, fully understand product features, risk levels, and income distribution principles, choose products matching their own risk tolerance, and invest prudently. For fund fee rates, please refer to legal documents.