Hong Kong Stock Concept Tracking | The MSCI China Index Adjustment Will Take Effect, Focus on Individual Stock Changes at the End of the Year, Foreign Investors Continue to Increase China's Quality Assets (with Concept Stocks)

The Zhitong Finance App learned that MSCI, a world-renowned index company, previously announced the November 2025 index review results, and this adjustment will officially take effect after closing on November 24, 2025. Among the MSCI index series, those involving A-shares include the MSCI China Index, the MSCI China A-share Onshore Index, and the MSCI China All Stock Index. The most noteworthy of these is the MSCI China Index. The MSCI China Index is embedded in the MSCI Emerging Markets Index, so when a stock enters the MSCI China Index, it means that it has entered the MSCI Global Standard Index series, thereby receiving passive capital tracking.

This time, 26 new targets were added to the MSCI China Index, including a number of resource stocks, as well as technology companies such as semiconductors and high-end manufacturing. The new individual stocks include 9 Hong Kong stocks: Zijin Gold International (02259), GF Securities (01776), Ganfeng Lithium (01772), China Nonferrous Mining (01258), China Gold International (02099), Rongchang Biotech (09995), Dongfeng Group (00489), Premium Choice (09880), and Jingtai Holdings (02228). There are also 17 A-shares including Huahong Company, Shengyi Electronics, Invec, Changying Precision, Jiang Bolong, and Sinoma Technology.

Meanwhile, the MSCI China Index excluded 20 Chinese stocks, including 4 Hong Kong stocks: Beijing Holdings Water Group (00371), China Everbright Bank (06818), China Resources Pharmaceuticals (03320), and China Civil Aviation Information Network (00696). There are also 16 A-shares including Donga Ejiao, Nanjing Securities, and Southwest Securities.

As MSCI's multiple index constituents are adjusted, related index funds will also adjust their positions accordingly, and newly included companies will receive more capital allocation; excluded companies will be passively sold by relevant index funds. Capital flow is upward. Judging from the historical experience of index adjustments, passive funds usually choose to adjust positions on the last day in order to minimize tracking errors in the index, so they also often see an “abnormal” increase in individual stock transactions with large weight changes, especially at the end of the session.

CICC has pointed out that after the results are announced until the official implementation date, some arbitrage funds will lay out corresponding individual stocks based on the official results, especially those unexpected results that were not fully predicted by the market before. However, previously, there was no shortage of newly included or weighted individual stocks falling in stock prices on the day the adjustments were implemented. It is recommended to pay attention to the potential impact of some individual stocks with poor liquidity.

Foreign-funded groups sing a lot!

Last week, a number of foreign-funded institutions released their 2026 outlook reports. They are collectively optimistic about the medium- to long-term allocation value of the Chinese stock market. Among them, UBS, Morgan Stanley, etc. have raised their target positions for stock indexes related to the Chinese market.

On November 18, UBS released the latest research report “2026 China Stock Strategy Outlook: Another Leap Forward?” I believe that next year, the Chinese market is expected to continue the positive momentum of 2025. UBS predicts that the MSCI China Index will reach 100 points by the end of 2026, with a potential increase of about 14% compared to the point at the time of publication of the report. Meanwhile, the target level of the Hang Seng Index was set at 30,000 points, with a potential increase of about 12.9% compared to the point at the time of publication of the report.

Wang Zonghao, head of China Stock Strategy Research at UBS Investment Bank, pointed out that the Chinese stock market is expected to usher in another good year next year. Currently, many positive factors in the Chinese market will continue to support the market in 2026.

Furthermore, Morgan Stanley also pointed out in its latest report that it is expected that the Chinese stock market will record moderate gains next year.

A team of analysts at Morgan Stanley, led by Wang Ying, wrote in the report that their year-end target for the Hang Seng Index is 27,500 points and the year-end target for the Shanghai and Shenzhen 300 Index is 4,840 points, which are about 6% and 5.9% higher than the current level, respectively.

Morgan Stanley believes 2026 will be a period of stabilization after this year's sharp rise. Thanks to investors' optimistic expectations about China's technological development prospects, the Shanghai and Shenzhen 300 Index has accumulated a cumulative increase of about 16% since this year, and is expected to record an increase for the second year in a row.

Furthermore, Morgan Stanley predicts that profits of Chinese companies will increase by 6% next year, and the growth rate may rise to 10% by 2027. Supported by favorable trade and expectations that the Federal Reserve will cut interest rates, the expected price-earnings ratio of the MSCI China Index will remain 12 to 13 times, which is basically the same as the current level.

While “singing a lot,” foreign-funded institutions are also “making real money” to increase Chinese assets. On November 19, the newly disclosed US 13F documents showed that many Wall Street investment institutions increased their allocation of Chinese assets in the third quarter of this year. Among them, China's Overseas Internet ETF (KWEB) received significant increases in holdings from large financial institutions such as Bank of America and UBS Group, as well as well-known hedge funds such as Millennium Management (Millennium Management) and Soros Fund. Many agencies believe that the allocation value of China's assets, especially in the technology sector, is increasing significantly.

Related concept stocks:

Zijin Gold International (02259): In early November, Morgan Stanley released a research report stating that Zijin Gold International (02259) “increased” the investment rating for the first time, with a target price of HK$175. Damo said that the company is a high-quality gold miner. In addition to growing rapidly in storage capacity, acquisition, exploration and operating costs are low. According to the bank's forecast, the company's revenue will grow at a compound annual rate of about 26% from 2024 to 27, mainly driven by the positive outlook for gold prices and the increase in the company's gold production. Moreover, the bank is optimistic about the outlook for gold prices. It is expected that by mid-next year, the price of gold will reach 4,500 US dollars per ounce, driven by interest rate cuts, ETF purchases issued by the central bank, and potentially high investors' related allocations.

GF Securities (01776): In early November, Goldman Sachs released a research report stating that GF Securities (01776)'s third-quarter revenue and net profit were 11 billion yuan and 5 billion yuan respectively, up 46% and 76% year-on-year, and the bank expects an increase of 18% and 23%. The bank expects investors to focus on the growth drivers of the company's asset management business; investment income prospects and financial asset allocation strategies; and cost reduction guidelines. Goldman Sachs raised GF's 2025 to 2027 revenue and net profit forecast by an average of 7% and 11% to reflect strong performance in the third quarter and maintain a neutral rating. The target price was raised from HK$14.47 to HK$16.36.

Ganfeng Lithium (01772): In mid-late November, Daiwa released a research report stating that it maintained Ganfeng Lithium's (01772) “outperforming the market” rating. The target price was raised from HK$23 to HK$53, giving Ganfeng Lithium a 22% discount on A-shares and based on improved liquidity in the H share market. The bank expects the company to record net profit from 2025 to 2027, compared to a net loss in 2024. The bank said that according to the latest supply and demand analysis, it is expected that there will be an oversupply of 76,000 tons and 54,000 tons of global lithium this year and next two years, down from 124,000 tons last year. The bank believes that China's lithium price will stabilize at 75,000 to 90,000 yuan per ton next year, which is higher than the bank's earlier forecast that Ganfeng Lithium will achieve an average sales price of 70,000 yuan per ton this year and next two years. The bank also raised its forecast for Ganfeng Lithium to achieve a lithium price per ton of 73,000 and 79,000 yuan this year and next two years, thus raising the company's revenue forecast for this year and next two years.

China Nonferrous Mining (01258): In October, Guoxin Securities released a research report stating that it maintains the “superior to market” rating of China Nonferrous Mining (01258). The company's revenue for 2025-2027 is US$36.32/47.30/4.950 billion, respectively, with year-on-year growth rates of -4.8%/30.2%/4.7%; net profit to the mother was US$4.80/5.18/631 million, respectively, with a year-on-year growth rate of 20.5%/7.7%/21.9%; diluted EPS was 0.12/0.13/0.16 US dollars, corresponding to the current stock price PE is 14.7/13.7/11.2X. Considering the simultaneous increase in the company's copper reserves and production and external mergers and acquisitions, it is expected to fully enjoy the profit flexibility brought about by the rise in copper prices. The company's dividend rate and dividend ratio are at the leading level in the same industry.

China Gold International (02099): In mid-late November, Guoxin Securities released a research report saying that China Gold International (02099) had strong performance in the first three quarters of 2025, with significant growth in revenue and net profit and reversal of losses, mainly benefiting from rising gold and copper prices and cost optimization. The company's gold and copper sales have been rising steadily, and annual production is expected to exceed the guidelines. With the gradual resumption of production and future production capacity expansion, growth can be expected. The current stock price corresponds to PE at 13.9/10.5/9.4X. Considering that the company has a portfolio of gold and copper products, rich resource reserves, and strong future growth, it maintains a “superior to the market” rating.

Rongchang Biotech (09995): In mid-late November, CCB International released a research report stating that it would raise the target price of Rongchang Biotech (09995) by 9% from HK$110 to HK$120 to maintain an investment rating of “outperforming the market.” CCB International said that Rongchang Biotech's total revenue forecast for 2025/2026/2027 remains unchanged, at 2.8 billion yuan/3.4 billion yuan/4.6 billion yuan, respectively.

Dongfeng Group (00489): At the end of October, Morgan Stanley released a research report saying that according to Voyah's latest disclosure, the average price of Dongfeng Group shares (00489) increased 7% in the first seven months, while sales also rose to 150,000 units. Taking into account the latest sales trends, the company's revenue for fiscal year 2025 is expected to increase 15% year-on-year. The bank also raised the company's target price by 5.6%, from HK$10.65 to HK$11.24, with a rating of “increase in holdings”.

Preferred Choice (09880): Recently, the first “AI Big Model Family Small Humanoid Robot”, AI Goku, jointly built with China Telecom Shaanxi Company, was officially launched in several core business offices of Shaanxi Telecom, which means that the “100,000 unit sales target” strategic cooperation previously set by the two parties has officially entered the actual delivery stage.

Jingtai Holdings (02228): Jingtai Holdings announced that with its industry-leading AI molecular discovery platform, the group successfully developed and verified two innovative topical ingredients — small molecule Remanagen (XTP-118) and polypeptide AquaKine (XTP-016) — that have both anti-hair loss and hair growth. Both molecules have successfully passed the INCI (International Cosmetic Ingredient Name) registration for new US cosmetic ingredients, and their combined formulation product, Groland, has also obtained the US FDA cosmetics registration, marking the official entry of Jingtai's AI platform into the consumer health field with huge potential.