Hong Kong Stock Concept Tracking|The Hang Seng Technology Index has entered a “technical bull market” and the brokerage sector is growing and underdeveloped (with concept stocks)

On February 7, Beijing time, the Hang Seng Technology Index rose 2.8% in midday trading, up more than 20% from its January low.

The Zhitong Finance App learned that since DeepSeek's performance is comparable to OpenAI's O1 model, but the AI training and inference costs are much lower than OpenAI's DeepSeek R1, an open source AI model, triggering enthusiastic and bullish sentiment among global investors about Chinese internet companies and Chinese semiconductor and software leaders. The Hang Seng Technology Index, the benchmark index for Chinese technology stocks traded on the Hong Kong stock market, has entered a “technical bull market.”

In the A-share market, GEM, which covers many technology stocks, had surged more than 3% as of Friday morning. The weekly increase was close to 7%. The index had been fluctuating sideways for a long time since October, and recently rebounded sharply following the Chinese tech stock carnival triggered by DeepSeek.

HSBC said that the development of the Chinese artificial intelligence startup DeepSeek has received global attention, and has once again confirmed China's underrated ability to continue to innovate. It is believed that as investors become more aware of this innovation, the valuation gap between China and emerging markets will narrow, and foreign capital inflows will pick up.

A-share technology companies may benefit from policy support. The essential link currently lacking is that China's innovation has not been transformed into higher profitability; this can only be solved through demand stimulation.

HSBC believes that as AI becomes cheaper, the development of DeepSeek can catalyze the rotation of AI upstream companies to downstream companies. This transformation has already occurred in the US market, but even so, the excellent performance of AI/tech downstream companies will also depend on the intensity of demand and product quality.

According to Deutsche Bank, 2025 will be a year for the investment community to recognize that China is surpassing the rest of the world; the bull market for Hong Kong stocks and A-shares began last year and is expected to surpass previous highs in the medium term. Investors will pay for China's dominance, and discounts on Chinese stocks are expected to disappear. Due to factors such as policies favoring consumption, I believe the profitability of Chinese companies will be pleasantly surprised. China's technological achievements are underestimated by investors; DeepSeek is like China's Sputnik moment, where its intellectual property rights are recognized. For investors who like leading companies with “moats,” we cannot ignore that Chinese companies have wide and deep moats, not Western companies.

Zhongtai Securities released a research report stating that the core measures of the medium- to long-term capital entry policy include increasing the actual investment ratio, extending the assessment cycle, and supporting measures. Today, medium- to long-term capital still has plenty of room to enter the market. Promoting the entry of medium- to long-term capital into the market is conducive to improving the stability of the capital side of the market, and gradually forming positive feedback on capital and assets.

China Merchants Securities said that policies drive multiple ways of capital to enter the market, and a clear policy attitude and real incremental inflow of living water are expected to push the equity market into a positive cycle of “rising index - increasing profit effect - capital inflow”, which is expected to bring strong catalysts to the brokerage sector.

Hong Kong stocks related to the brokerage sector:

Hong Kong Stock Exchange (00388)

Chinese brokerage sector: China Merchants Securities (06099), CITIC Securities (06030), CICC (03908), Shenwan Hongyuan (06806), CITIC Construction Investment Securities (06066), etc.

Local brokerage firms in Hong Kong: Cathay Pacific Junan International (01788), Shenwan Hongyuan Hong Kong (00218), Yaocai Securities Finance (01428), etc.