Dear all, The Hang Seng Tech Index (HST) has corrected sharply—falling 27% from its multi-year high of 6,715 (2 Oct 2025) to 4,871 as of 30 Apr 2026. Notably, it now sits just 148 points above its pre–DeepSeek level (4,723 on 28 Jan 2025). This raises an important question: Is capital about to rotate from crowded AI hardware trades into overlooked internet giants? Both CGSI and UBS think this is increasingly likely. Here’s a breakdown of the investment case. Investment Case (7 Key Points) 1) Underperformance may be creating an entry point HST has lagged both regional peers and A-shares, largely due to its limited exposure to the AI hardware rally.

• Past 1 month:
  • ChiNext: +11.9%
  • STAR50: +14.8%
  • HST: +2.8%

If we were to compare year-to-date (YTD) performance (See Fig 1), HST underperformance is stark, down 11% with all the other indices posting positive YTD performance. The performance gap is now hard to ignore. Figure 1: YTD performance of HST vis-à-vis the other China indices...