Introduction: As the adjustment of Hong Kong stocks approaches support levels, the A-H premium is on the rise again, and contrarian funds are warming up. The willingness of industrial capital to repurchase and for funds to flow southward is once again strengthening.

Southbound funds once again become the "mainstay," with the scale of net purchases expanding continuously.

Last week, the net inflow of southbound funds reached 24.424 billion Hong Kong dollars, a new high since late June this year. Within this week (from October 21 to 23), the net inflow of southbound funds has already reached 27.736 billion Hong Kong dollars, with the net inflow on October 21 reaching 12.43 billion Hong Kong dollars, setting a new high since March 23.

Looking at the sub-sectors of net inflow, southbound funds may prefer a barbell strategy combining technology and dividends. In the past seven days, the stocks with the highest net purchases by southbound funds are Alibaba, SMIC, Hang Seng Index ETF, Xiaomi Group, Tencent Holdings, Sunac China, China Resources Power, China Traditional Chinese Medicine, China Life, and Geely Automobile. Among them, Alibaba, SMIC, Xiaomi Group, and Tencent Holdings are all among the top ten weighted stocks of the Hang Seng Technology Index.

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As of October 23, the net purchase amount of southbound funds this year has reached 567.729 billion Hong Kong dollars. If the current inflow speed of southbound funds continues, this year's net purchase amount of southbound funds may set a historical record. Data shows that although there are still more than two months left this year, the net purchase amount of southbound funds is already the second-highest in history, second only to the 67.21 billion Hong Kong dollars in 2020. This trend indicates that mainland investors' confidence in the Hong Kong stock market may be gradually increasing.

Hong Kong stock buybacks heat up, industrial capital "shows power"

It is worth mentioning that after the Hong Kong stock market adjusts again, the buybacks in the Hong Kong stock market are heating up again. Huatai Securities pointed out that last week there were a total of 238 buyback cases, an increase of 44 cases from the previous week, returning to above the 80th percentile since 2023.Off-Exchange Linked Fund: Huaxia Hang Seng Technology ETF Initiated Linked (QDII) (Class A: 013402 / Class C: 013403)

The underlying index of the Hang Seng Technology Index ETF (513180) is the Hang Seng Technology Index, with its complete accounting year performance from 2019 to 2023 being: 36.25%, 78.71%, -32.70%, -27.19%, -8.83%; historical index performance does not predict the future performance of the fund product.

T+0 Special Risk Warning: Cross-border ETFs implement a T+0 reverse transaction mechanism (i.e., purchased on the same day, it can be sold on the same day before settlement), which shortens the capital operation cycle and may bring short-term volatility risks.

Its linked funds carry specific risks such as linked fund risks, tracking deviation risks, and performance differences from the target ETF. Class A funds charge a one-time subscription fee upon purchase, with no sales service fee; Class C has no subscription fee but charges a sales service fee. Due to differences in fee collection, establishment time, and other factors, there may be significant differences in long-term performance between the two. For details, please refer to the product's regular reports.