The results of the Hang Seng Index's half-year inspection will soon be revealed! Bubble Mart (09992) and other institutions that are expected to “dye blue” are optimistic about these individual stocks entering the Hong Kong Stock Exchange

The Zhitong Finance App learned that the Hang Seng Index Company will announce the semi-annual review results of the Hang Seng Index series on August 22, 2025 (Friday), involving major Hong Kong stock flagship indices such as Hang Seng, State-owned Enterprises, and Hang Seng Technology, as well as the Hang Seng Composite Index, which is closely related to the investment scope of Hong Kong Stock Connect. Changes in constituent stocks will take effect on September 8, 2025 (Monday). In response, many brokerage firms, including UBS, Huatai Securities, and CICC, have released reports predicting the Hang Seng Index, Hang Seng China Enterprises Index, adjustments to the Hang Seng Comprehensive List, and the list expected to be included in the Hong Kong Stock Connect.

CICC pointed out that since semi-annual reviews usually change a lot, and the scale of passive capital to track flagship indices is large (based on Bloomberg and Wind statistics, the ETF sizes that track the Hang Seng Index, SOEs, and Hang Seng Tech Index are about US$30.35 billion, US$6.63 billion, and US$26.12 billion, respectively), changes in potential constituent stocks and corresponding capital flows are worth focusing on.

Bank of Communications (03328), Bubble Mart (09992), and Yum China (09987) are expected to be included in the Hang Seng Index

In terms of the Hang Seng Index adjustment, CICC is expected to have an opportunity to “dye blue” (becoming a blue chip) stock including Bank of Communications (03328), Bubble Mart (09992), Yum China (09987), Xiaopeng Motors (09868), Huazhu Group (01179), JD Logistics (02618), and Cinda Biotech (01801).

The bank pointed out that the estimation of potential candidates for the Hang Seng Index takes priority into market capitalization rankings, combined with factors such as representation and coverage of various industries, but historical experience has shown that the actual results of the Hang Seng Index quarterly inspection may be significantly different from those based on ranking screening. For example, Cinda Biotech, etc. ranked high in the past few predictions, but in the end, none of them were included. It is mainly possible that the index advisory committee's decision is based on factors such as the representation of the industry and listing site. At the same time, it is not ruled out that considerations of other non-quantitative factors influence the final decision.

UBS, on the other hand, comprehensively considers market capitalization and industry balance and predicts that the following stocks are expected to “turn blue”: Giant Biotech (02367), Pharmaceutical Federation (02268), Bubble Mart, JD Logistics, Jinshan Software (03888), and Bank of Communications (03328). Furthermore, UBS predicts that it may be included in the Hang Seng China Enterprises Index according to the buffer zone rules of the composite market capitalization ranking.

Cao Cao Chuxing (02643), Yingen Biotech (09606), and Zhou Liufu (06168) are expected to be included in the Hong Kong Stock Exchange

It is worth noting that Hong Kong Stock Connect is one of the main channels connecting many Hong Kong stock listed companies with the mainland. According to relevant requirements, in order for a Hong Kong stock listed company to enter the Hong Kong Stock Connect list, it must first become a component stock of the Hang Seng Composite Index. Since the Hang Seng Composite Index undergoes major adjustments every six months, Hong Kong Stock Connect will also adjust accordingly.

CICC estimates that 19 shares meet the criteria for inclusion in Hong Kong Stock Connect, including Cao Chuxing (02643), Yingen Biotech (09606), Zhou Liufu (06168), IFBH (06603), Nanshan Aluminum (02610), and Conet Optics (02276). The bank also expects that the latest Hong Kong stocks listed in July, such as Yasui Foods (02648), Lansi Technology (06613), and FORTIOR (01304), will be included in the Hong Kong Stock Connect after the end of the price stabilization period in August.

UBS, on the other hand, is expected to be included in the Hong Kong Stock Connect according to predictions of the Hang Seng Composite Index: Bank of East Asia, Yingen Bio-B, Blue Moon Group, Nanshan Aluminum International, Zenith New Energy, Jinjing Xinneng, Huiju Technology, MIRXES-B, China Food, JD Health, Shanghai Aunt, Boleyton, Guanglian Technology Holdings, Weisheng Holdings, Kangchen Pharmaceutical, and Happy Meet Group.

Huatai Securities, on the other hand, anticipates that 19 Hong Kong stocks may be included in the Hong Kong Stock Connect, namely Yunzhisheng, Huiju Technology, Nanshan Aluminum International, Yingen Bio-B, Mirxes-B, Baize Healthcare, Pharmacotec, Borreton, Cao Cao Chuxing, Zhou Liufu, Xibing Group, Country Garden, Jin Jing Xinneng, IFBH, Shanghai Aunt, and Chinese Food.

According to Huatai Securities, looking at the review, the excess earnings of the new stock market compared to the Hang Seng Index were significant (median/average: 1.8%/5.2%) from the date of the announcement of the comprehensive adjustment (effective opening). In contrast, the excluded individual stocks faced capital outflows and significantly outperformed the market during the corresponding period (median/average: -5.3%/-7.5%). Active funds may carry out arbitrage operations based on the adjustment results, while passive funds will adjust positions on the trading day before entry into force (September 5 this time) to reduce tracking errors, causing a significant increase in trading volume at the end of the session.