HK Stock Connect Weekly Report: Hang Seng Index Rises 3.55% for the Week; Quarterly Review Results Unveiled, HUA HONG GRACE and ILUVATAR COREX Enter HSI and HSTECH - 20260821
I. Weekly Market Overview
During the week (August 17-21), the three major Hong Kong indices all rose. The Hang Seng Index gained 3.55% cumulatively for the week, closing at 26,009.46 points, back above the 26,000 level; the Hang Seng TECH Index rose 1.24% for the week; and the Hang Seng China Enterprises Index rose 1.01%. Average daily turnover was approximately HKD 246.6 billion, with active market trading. Southbound capital showed an alternating inflow-outflow pattern during the week: a net buy of HKD 3.077 billion on Monday, a net buy of HKD 14.0 billion on Tuesday, a net sell of HKD 10.6 billion on Wednesday, a net sell of HKD 10.412 billion on Thursday and a net sell of HKD 7.630 billion on Friday. The full-week southbound capital net outflow was approximately HKD 11.565 billion.
II. Weekly Hot Sector Review
1. Memory chips / optical communications—SK Hynix chairman warns of "memory shortage", industry chain explodes
Memory chips and optical communications were among the week's strongest themes. On Monday, memory chip and semiconductor stocks led the gains, with MONTAGE TECH (06809.HK) up 9.58%, GIGADEVICE (03986.HK) up 8.41% and HUA HONG GRACE (01347.HK) up 7.45%, after the SK Hynix chairman warned that next year could see the most severe "memory shortage" ever. Optical communications strengthened in tandem, with CREALIGHTS (01191.HK) up 23.23%, YOFC (06869.HK) up 12.10% and ZJ INNOLIGHT (03308.HK) up 8.18%. On Wednesday, AI hardware stocks fell across the board, with HUA HONG GRACE down 11.79%, YOFC down 10.19% and ZJ INNOLIGHT down 10.06%, as surging long-dated government bond yields across multiple countries pressured valuations of long-duration growth stocks, compounded by OpenAI's slowing Q2 revenue growth and widening losses. On Friday, memory concepts rose against the tide, with GIGADEVICE up 2.61%.
2. Large-model sector—down first then up, MINIMAX-W up nearly 12% on Friday
The large-model sector showed a "down first, up later" pattern during the week. On Monday, MINIMAX-W (00100.HK) rose 1.46% and Z.AI (02513.HK) fell 5.28%. On Tuesday, Z.AI plunged 13.30% with turnover of HKD 11.222 billion, and southbound turnover of HKD 9.803 billion ranking first in the entire market; MINIMAX-W fell 4.49%. On Wednesday, Z.AI fell 2.97% and MINIMAX-W fell 1.91%. On Thursday, MINIMAX-W rose 6.16% and Z.AI rose 1.09%. On Friday, the large-model "twin leaders" strengthened in tandem, with MINIMAX-W surging 11.86% on turnover of HKD 6.346 billion and southbound turnover of HKD 4.050 billion, and Z.AI surging 10.36% on southbound turnover of HKD 7.410 billion. On the HSI quarterly review, despite market expectations of blue-chip inclusion for Z.AI and MINIMAX-W, the outcome fell short, with the HSI adding HUA HONG GRACE and WEICHAI POWER instead. Nevertheless, the large-model twins still rose strongly on Friday, reflecting undiminished medium-to-long-term market confidence in the AI track.
3. Pharma sector—mRNA cancer vaccine Phase III clinical success, EVEREST MED surges 41%
The pharma sector saw a major catalyst this week. On Thursday, the success of the world's first mRNA cancer vaccine Phase III clinical trial ignited the pharma sector: EVEREST MED (01952.HK) surged 41.43% on turnover of HKD 4.269 billion; CANSINOBIO (06185.HK) rose 37.36%, GENSCRIPT BIO (01548.HK) rose 13.62%, METIS TECHBIO-P (07666.HK) rose 27.99%, and SBP GROUP (01177.HK) rose 12.53%. On Monday, the CRO concept advanced again, with GENSCRIPT BIO up 8.36%, as AIDD catalyzed strong growth in its life sciences business.
4. Innovative drugs sector—EVEREST MED surges 41%, related ETF turnover surges
NewTimeSpace weekly data shows that the innovative drugs sector exploded on Thursday, with EVEREST MED surging 41.43%, CANSINOBIO up 37.36% and GENSCRIPT BIO up 13.62%. On Friday, SCIENTECH (02291.HK) rose 20.53% and HAIZHI TECH GP (02706.HK) rose 13.45%. On the ETF front, innovative drugs ETFs traded extremely actively. On Thursday, the China Universal CNI HK Equities Innovative Drugs ETF (159570) recorded turnover of RMB 4.509 billion, ranking first in the entire market, up 5.08%; the Yinhua CNI HK Equities Innovative Drugs ETF (159567) recorded turnover of RMB 2.349 billion, up 5.19%; the E Fund Hang Seng HK Innovative Drugs ETF (159316) recorded turnover of RMB 1.725 billion, up 4.81%; the Invesco Great Wall CSI HK Equities Innovative Drugs ETF (513780) recorded turnover of RMB 1.314 billion, up 5.20%; the ICBCCS CNI HK Equities Innovative Drugs ETF (159217) recorded turnover of RMB 1.136 billion, up 5.14%. On Friday, innovative drugs ETFs fell collectively as pharma stocks pulled back, with the China Universal CNI HK Equities Innovative Drugs ETF (159570) recording turnover of RMB 2.186 billion, down 1.92%; the Yinhua CNI HK Equities Innovative Drugs ETF (159567) recording turnover of RMB 1.040 billion, down 1.92%; the E Fund Hang Seng HK Innovative Drugs ETF (159316) recording turnover of RMB 881 million, down 1.75%.
5. Gold sector—firm early in the week, mixed gains on Friday
The gold sector showed divergence this week. On Monday, gold stocks advanced again, with ZIJIN GOLD INTL (02259.HK) up 11.25% and LINGBAO GOLD (03330.HK) up 5.99%. On Tuesday, gold stocks corrected from highs, with CHIFENG GOLD (06693.HK) down 6.01% and ZIJIN MINING (02899.HK) down 5.8%. On Friday, some gold stocks turned higher, with CHIFENG GOLD up 12.4% and SD GOLD (01787.HK) up 8.7%, as spot gold stood above USD 4,560; CHINAGOLDINTL (02099.HK) rose 14.64% and LINGBAO GOLD rose 4.18%, with the company posting its best-ever interim results. LINGBAO GOLD issued a positive profit alert, expecting first-half net profit of approximately RMB 950 million to RMB 1.05 billion, up 42%–57% year-on-year, with gold resources in its Xinjiang mine jumping from 13.20 tonnes to 53.94 tonnes.
6. Other sector highlights
Automakers: recovered broadly on Thursday, with LI AUTO-W (02015.HK) up 5.53% and NIO-SW (09866.HK) up 4.49%. Lithium miners: strong on Friday, with TIANQI LITHIUM (09696.HK) up 11.74% and GANFENGLITHIUM (01772.HK) up 8.61%, as the main lithium carbonate futures contract surged over 4%. Pork concept: led gains on Tuesday, with MUYUAN (02714.HK) up 4.56%, as the domestic average hog price surpassed RMB 10.86 per kg. Robot concept: mostly higher on Tuesday, with ESTUN (02715.HK) up 8.43%; Unitree debuted on the STAR Market on Wednesday, surging 629% at the open from its issue price, with the siphon effect dragging on intra-sector divergence. Mainland bank stocks: rose against the tide on Wednesday, with ABC (01288.HK) up 2.13%, as commercial banks' net interest margins posted their first quarter-on-quarter rebound in four years. Container shipping stocks: rose across the board on Monday, with OOIL (00316.HK) up 7.29% and COSCO SHIP HOLD (01919.HK) up 6.13%; extended gains on Friday, with COSCO SHIP HOLD up 5.4%. Internet stocks: KUAISHOU-W (01024.HK) plunged 11.01% after results on Thursday, with Q2 adjusted net profit of RMB 3.9 billion and Kling AI revenue up over 200% year-on-year; TENCENT (00700.HK) fell 4.46% after results on Thursday, as surging Q2 capital expenditure turned free cash flow negative. Paper stocks: led declines on Thursday, with ND PAPER (02689.HK) issuing a positive profit alert but its shares plunging 16.8%.
III. Key Stock Connect Events
1. Hang Seng Index quarterly review results unveiled: HUA HONG GRACE and WEICHAI POWER enter HSI; ILUVATAR COREX added to HSTECH
After market close on Friday August 21, Hang Seng Indexes Company announced the official results of the second-quarter 2026 Hang Seng family index review: the Hang Seng Index will add HUA HONG GRACE (01347.HK) and WEICHAI POWER (02338.HK), increasing the number of constituents from 93 to 95; the Hang Seng China Enterprises Index has no constituent changes, maintaining 50 constituents; the Hang Seng TECH Index will add ILUVATAR COREX (09903.HK) and remove TONGCHENGTRAVEL (00780.HK). The changes will be implemented after market close on Friday September 4, taking effect on Monday September 7. Previously, CICC predicted that ZIJIN GOLD INTL (02259.HK), Z.AI (02513.HK) and MINIMAX-W (00100.HK) met the criteria for inclusion as HSI constituents, but the outcome fell short. GF SEC predicted that a total of 38 companies would gain Stock Connect eligibility in this round, with 37 included on September 7 through the periodic adjustment; the specific list is pending further announcement.
2. BIDU-SW accelerates dual primary listing push; expectations of September Stock Connect inclusion heat up
On Wednesday August 19, BIDU-SW (09888.HK) CFO He Haijian said on the earnings call that the board had approved converting the company's Hong Kong listing status from a secondary listing to a dual primary listing, with the conversion expected to take effect within this year, and that the group is preparing for inclusion in southbound Stock Connect after the conversion. BIDU-SW will hold an extraordinary general meeting on August 26 to seek shareholder approval on related matters. Jefferies believes BIDU-SW's voluntary conversion to a dual primary listing is a positive signal, with a chance of Stock Connect inclusion in September.
3. HKEX: to include HUADIAN NEW ENERGY, TSI and BEST in Shanghai Connect from August 24
On Wednesday August 19, HKEX announced that, from August 24, HUADIAN NEW ENERGY (600930.SH), TSI (603262.SH) and BEST (688729.SH) will be included in Shanghai Connect and become CCASS-eligible securities on the same day. After the inclusion, the three A-share companies will be eligible for northbound trading.
4. GEELY AUTO's interim revenue hits record high; core net profit up 46%; major management reshuffle
On Monday August 17, GEELY AUTO (00175.HK) released its 2026 interim results and announced management changes. In the first half, total revenue reached RMB 173.6 billion, up 15% year-on-year, a record high; core attributable net profit was RMB 9.68 billion, up 46% year-on-year. Total sales volume was 1.423 million vehicles, up 1% year-on-year; exports were 474,000 vehicles, up 158% year-on-year. Gross margin improved to 17.9%, and revenue per vehicle rose 16% year-on-year to RMB 112,000. At the board level, Li Shufu resigned as chairman of the board and executive director, becoming lifetime honorary chairman, with An Conghui succeeding as chairman of the board; Gui Shengyue resigned as chief executive officer, becoming vice chairman of the board, with Gan Jiayue succeeding as chief executive officer.
5. H WORLD-S interim results beat expectations; USD 2.5 billion shareholder return plan approved
On Monday August 17, H WORLD-S (01179.HK) released its 2026 second-quarter and interim results. Second-quarter revenue was RMB 7.121 billion, up 10.8% year-on-year; net profit attributable to H WORLD-S was approximately RMB 1.6 billion, up 2.1% year-on-year. First-half revenue was RMB 13.117 billion, up 11.0% year-on-year; attributable net profit was approximately RMB 2.4 billion. The board approved a three-year shareholder return plan of USD 2.5 billion and declared a dividend of 8.7 US cents per share. The company raised its full-year revenue guidance to growth of 4%–8% (previously 2%–6%), and lifted the expected growth of managed, franchised and licensed revenue from 12%–16% to 16%–20%.
6. KUAISHOU-W posts Q2 adjusted net profit of RMB 3.9 billion; Kling AI revenue up over 200% year-on-year
After market close on Wednesday August 19, KUAISHOU-W (01024.HK) disclosed its second-quarter 2026 results. Second-quarter total revenue was RMB 35.5 billion, up 1.4% year-on-year; adjusted net profit was RMB 3.9 billion, with an adjusted net profit margin of 11.0%. First-half total revenue was RMB 69.251 billion, up 2.4% year-on-year; adjusted net profit was RMB 7.287 billion. Average daily active users reached 412.3 million in the second quarter, a record high. Kling AI generated revenue of over RMB 850 million, up over 200% year-on-year. However, the shares plunged 11.01% on Thursday on turnover of HKD 8.436 billion, with southbound net buy of HKD 1.144 billion.
7. Multiple companies disclose results and updates
ZIJIN GOLD INTL (02259.HK): interim profit attributable to owners of USD 1.451 billion, up 178.83% year-on-year, proposing an interim dividend of HKD 1.5 per share. CHINA XLX FERT (01866.HK): issued positive profit alert on Friday, expecting first-half net profit up 52%–62%. SIMCERE PHARMA (02096.HK): issued positive profit alert on Thursday, expecting first-half profit attributable to owners up 34.8%–43.1%. ND PAPER (02689.HK): issued positive profit alert on Thursday, expecting full-year profit attributable to shareholders up 92.4%–103.7%, but shares plunged 16.8%. CIL GROUP (01719.HK): issued positive profit alert on Wednesday, expecting first-half profit attributable to owners up about 225%. PINESTONE (00804.HK): issued positive profit alert on Friday, expecting interim swing to net profit of HKD 2–3 million. BOARDWARE INTEL (01204.HK): issued positive profit alert on Wednesday, expecting interim profit to surge by no less than 50%.
8. Multiple companies file listing applications with HKEX
According to HKEX disclosures, this week Junlebao Dairy Group (Thursday), Bonasia Pharmaceutical (Thursday), Shenzhen Medcaptain Medical Technology (passed listing hearing on Thursday), HUNAN YUNENG NEW ENERGY BATTERY MATERIAL (Monday), Yimufeng Bio-B (Tuesday) and Benmo Power (Wednesday) submitted listing applications to or passed listing hearings at HKEX.
IV. Stock Connect-related A-share ETF Rankings (Weekly Focus)
This week, Stock Connect-related A-share ETFs showed a pattern of "innovative drugs turnover surging, information technology diverging, and internet under pressure". On the innovative drugs ETF front, catalyzed by the success of the world's first mRNA cancer vaccine Phase III clinical trial, innovative drugs ETFs surged collectively with turnover spiking on Thursday. The China Universal CNI HK Equities Innovative Drugs ETF (159570) recorded turnover of RMB 4.509 billion on Thursday, ranking first in the entire market, up 5.08%; the Yinhua CNI HK Equities Innovative Drugs ETF (159567) recorded turnover of RMB 2.349 billion, up 5.19%; the E Fund Hang Seng HK Innovative Drugs ETF (159316) recorded turnover of RMB 1.725 billion, up 4.81%; the Invesco Great Wall CSI HK Equities Innovative Drugs ETF (513780) recorded turnover of RMB 1.314 billion, up 5.20%; the ICBCCS CNI HK Equities Innovative Drugs ETF (159217) recorded turnover of RMB 1.136 billion, up 5.14%. On Friday, innovative drugs ETFs fell collectively as pharma stocks pulled back, with the China Universal CNI HK Equities Innovative Drugs ETF (159570) recording turnover of RMB 2.186 billion, down 1.92%; the Yinhua CNI HK Equities Innovative Drugs ETF (159567) recording turnover of RMB 1.040 billion, down 1.92%; the E Fund Hang Seng HK Innovative Drugs ETF (159316) recording turnover of RMB 881 million, down 1.75%; the Invesco Great Wall CSI HK Equities Innovative Drugs ETF (513780) recording turnover of RMB 697 million, down 1.27%; the ICBCCS CNI HK Equities Innovative Drugs ETF (159217) recording turnover of RMB 558 million, down 1.96%.
On the information technology ETF front, driven by stronger memory chip and optical communications concepts, information technology ETFs rose collectively on Monday—the Hwabao CSI HK Equities Information Technology Integration ETF (159131) rose 2.40% on turnover of RMB 1.612 billion with a turnover rate of 65.97%; the ChinaAMC CSI HK Equities Information Technology Integration ETF (526000) rose 2.52% on turnover of RMB 462 million with a turnover rate of 208.91%. On Wednesday, dragged by the AI hardware stock sell-off, information technology ETFs plunged collectively, with the ChinaAMC CSI HK Equities Information Technology Integration ETF (526000) down 5.05% on turnover of RMB 622 million with a turnover rate of 296.51%, and the Hwabao CSI HK Equities Information Technology Integration ETF (159131) down 4.61% on turnover of RMB 1.473 billion with a turnover rate of 64.46%. On Friday, the Hwabao CSI HK Equities Information Technology Integration ETF (159131) recorded turnover of RMB 1.502 billion, up 1.25%, with a turnover rate of 66.56%.
On the internet ETF front, dragged by post-results declines in KUAISHOU-W and TENCENT, internet ETFs came under broad pressure this week. On Thursday, the Fullgoal CSI HK Equities Internet ETF (159792) fell 0.51% on turnover of RMB 1.429 billion. On Friday, the Fullgoal CSI HK Equities Internet ETF (159792) recorded turnover of RMB 1.691 billion, down 1.01%; the E Fund CSI HK Equities Internet ETF (513040) recorded turnover of RMB 579 million, down 0.42%; the Hwabao CSI HK Equities Internet ETF (513770) recorded turnover of RMB 428 million.
Overall, the week's ETF capital flows were clear—a three-tier heat structure of innovative drugs ETFs > information technology ETFs > internet ETFs ran throughout. The mRNA cancer vaccine clinical success ignited innovative drugs ETF turnover, memory chips and optical communications concepts drove information technology ETFs to rise first and fall later, while internet ETFs came under overall pressure on the back of KUAISHOU-W and TENCENT results.
V. Market Notes
Constituent list adjustments: 0 securities added and 0 removed this week. The Hang Seng Index quarterly review was announced after market close on Friday (August 21), with the HSI adding HUA HONG GRACE and WEICHAI POWER, the HSTECH adding ILUVATAR COREX and removing TONGCHENGTRAVEL; the changes take effect on September 7. Trading calendar: no upcoming market closures.
VI. Weekly Summary
Hong Kong stocks rose across the board this week, with the Hang Seng Index returning above the 26,000 level, up 3.55% for the week. The market's core theme centered on the unveiling of the HSI quarterly review results: HUA HONG GRACE and WEICHAI POWER were added to the Hang Seng Index, ILUVATAR COREX was added to the Hang Seng TECH Index, and the previously expected blue-chip inclusion of Z.AI and MINIMAX-W fell short—though both shares still rose strongly on Friday. Memory chips and optical communications exploded across the board on the SK Hynix chairman's "memory shortage" warning and AI computing power demand. The pharma sector was catalyzed by the success of the world's first mRNA cancer vaccine Phase III clinical trial, with EVEREST MED surging 41% in a single day and related ETF turnover surging. The large-model sector fell first then rose, with the twin leaders rallying on Friday—Z.AI up over 10% and MINIMAX-W up nearly 12%. On the connect mechanism front, several important developments took place this week: the HSI quarterly review results were unveiled; BIDU-SW accelerated its dual primary listing push with September Stock Connect inclusion expectations heating up; and HKEX announced three A-share companies to be included in Shanghai Connect. These events show the Hong Kong market continuing to deepen in index compilation and connectivity, with the weight of technology attributes and AI themes steadily rising.
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