HK Stock Connect Weekly Report: HSI Falls 1.63% for the Week, Alibaba's HKD 80 Billion Placement Fully Committed to AI, ZJ INNOLIGHT Officially Added to Stock Connect

I. Weekly Market Overview

NewTimeSpace News: In the week of 24-28 August 2026, Hong Kong's three major indices moved lower across the board, with the Hang Seng Index down 1.63% for the week to close at 25,584.79 points, the Hang Seng TECH Index down 3.38% for the week, and the Hang Seng China Enterprises Index down 1.67% for the week. Average daily turnover was approximately HKD 253 billion, reflecting active market participation.

On the southbound front, the week featured alternating inflows and outflows: net buying of HKD 11.6 billion on Monday, net selling of HKD 6.605 billion on Tuesday, net buying of HKD 6.453 billion on Wednesday, net buying of HKD 3.18 billion on Thursday, and net buying of HKD 1.176 billion on Friday. The full-week southbound net inflow totaled approximately HKD 15.8 billion.

II. Weekly Hot-Spot Sector Review

1. Alibaba's HKD 80 Billion Placement Fully Committed to AI; Internet and Tech Names Under Broad Pressure

ALIBABA-W (09988.HK) was the market focus this week. On Monday, the company announced the pricing of its new share placement of HKD 80 billion, planning to place 710 million new shares at HKD 112.70 per share, a discount of approximately 8.37% to Friday's closing price, with net proceeds of approximately HKD 79.7 billion to be invested 100% in full-stack AI capabilities and the strengthening of AI infrastructure. This is Alibaba's first new share placement since its 2019 Hong Kong listing. Hit by the dilution effect of the placement, ALIBABA-W tumbled 8.54% on Monday, dragging the Hang Seng Index down 167 points. The stock rebounded 1.51% on Tuesday, rose 2.10% on Wednesday, fell 0.94% on Thursday and slipped 1.39% on Friday, ending the week down approximately 7.5%.

Management's share purchases bolstered market confidence: on Monday, Joe Tsai bought 720,000 shares at an average price of approximately HKD 112, spending around HKD 80 million, and Eddie Wu bought 350,000 shares at an average of approximately HKD 111.6, spending around HKD 40 million. On Wednesday, market reports said founder Jack Ma had bought Alibaba H-shares on consecutive days, with the total exceeding HKD 600 million; combined cumulative purchases by Ma and management recently surpassed HKD 800 million.

Large internet and tech names came under broad pressure this week. TENCENT (00700.HK) fell 3.72% on Monday, rose 0.77% on Wednesday and gained 1.65% on Friday, down about 0.8% for the week. XIAOMI-W (01810.HK) slumped 4.14% on Monday and fell 3.44% on Thursday, down about 5% for the week. MEITUAN-W (03690.HK) tumbled 6.65% on Tuesday with turnover of HKD 7.132 billion.

2. HSI Quarterly Review Beneficiaries Surge; Inclusion Expectations Grow for DIAGENS-B and STAR SPORTS MED

The results of the Hang Seng Index quarterly review continued to reverberate this week. On Monday, stocks benefiting from the index review surged against the trend: DIAGENS-B (02526.HK) rose 37.45% and FAMEGLOW (03774.HK) gained 25.27%. On Wednesday, SPDB International issued a research note estimating that passive funds tracking the three major indices—HSI, HSTECH and HSCEI—total approximately HKD 796.3 billion, implying that the review's effective date (7 September) could trigger approximately HKD 38.6 billion of two-way flows. The Hang Seng Composite Index added 61 companies this time, of which 54 stocks including XIZHI TECH-P (01879.HK), HENLIUS (02696.HK) and SIGENERGY (06656.HK) are expected to be included in Stock Connect on 7 September.

STAR SPORTS MED (01609.HK) announced on Wednesday that it had been selected for inclusion in the Hang Seng Composite Index as a constituent, effective 7 September, and that its shares are expected to meet the inclusion criteria for Shanghai Connect and Shenzhen Connect trading. DIAGENS-B (02526.HK) announced on Monday that it had met the criteria for inclusion in Stock Connect trading and is the only company newly added to the Hang Seng Hong Kong-Listed Biotech Index in this index review.

3. AI Hardware Stocks—Rebounded on NVIDIA Results, but Under Pressure for the Week

Driven by NVIDIA's second-quarter results beating expectations across the board, storage, optical communications and other AI hardware names strengthened on Thursday. YOFC (06869.HK) rose 10.31% on Thursday, KB LAMINATES (01888.HK) gained 10.51%, and ZJ INNOLIGHT (03308.HK) added 3.05%. However, amid valuation concerns for the technology complex triggered by Alibaba's placement, AI hardware stocks remained under pressure for the week: on Monday ZJ INNOLIGHT fell 11.32% and CIG (06166.HK) dropped 6.79%; on Friday VGT (02476.HK) slumped 12.96% and GIGADEVICE (03986.HK) fell 5.81%.

4. CRO / Innovative Drugs—Strong First, Weak Later, Correcting on Friday After an Early-Week Rally

On Tuesday, CRO and innovative drug concepts rallied sharply: EVEREST MED (01952.HK) rose 18.46%, ASYMCHEM (06821.HK) gained 16.02%, WUXI XDC (02268.HK) climbed 14.83%, and INSILICO (03696.HK) advanced 14.60%. On Wednesday, CANSINOBIO (06185.HK) surged 25.99% and innovative drug ETFs moved higher across the board. EVEREST MED fell 4.51% on Monday but rebounded strongly on Tuesday. On Friday, the CRO complex corrected with pharmaceutical names: CANSINOBIO fell 9.77% and innovative drug ETFs declined collectively, with the China Universal CNI HK Equities Innovative Drugs ETF (159570) down 1.77%.

5. Gold—Under Pressure Early in the Week, Higher on Friday

Gold stocks led declines on Monday, with LINGBAO GOLD (03330.HK) down 6.47% and CHIFENG GOLD (06693.HK) down 4%. On Friday, gold stocks led gains, with CHINAGOLDINTL (02099.HK) up 7.72% as spot gold returned to USD 4,600 per ounce. CHINAGOLDINTL gained 7.72% on Friday and performed steadily for the week.

6. Other Sector Highlights

Mainland property developers: active on Friday, with SUNAC (01918.HK) up 10.66% as a wave of local real-estate policy easing built momentum for the "golden September and silver October" season; COUNTRY GARDEN (02007.HK) rose 6.49% on Monday.

Copper miners: led gains on Wednesday, with JIANGXI COPPER (00358.HK) up 9.92% as London copper hit a record closing high.

Chinese brokerages: mostly higher on Wednesday, with CICC (03908.HK) up 8.25%, as listed brokers' earnings entered a period of concentrated delivery.

High-quality earners: strong on Wednesday, with INNOVENT BIO (01801.HK) up 9.69% and ANTA SPORTS (02020.HK) up 9.53%, as interim-report season drew to a close.

BIDU-SW (09888.HK): jumped 5.34% on Thursday as its dual primary listing takes effect on 1 September, lifting expectations of inclusion in Stock Connect.

Oil and gas stocks: broadly pressured on Wednesday, with international oil prices plunging after the US and Iran signaled easing tensions over navigation through the Strait of Hormuz.

Beer stocks: fell sharply on Thursday, with TSINGTAO BREW (00168.HK) down 3.45% and CHINA RES BEER (00291.HK) down 3.18%.

III. Key Stock Connect Events

1. ZJ INNOLIGHT Officially Added to Stock Connect, Effective 27 August

On 27 August, the SZSE announced an adjustment to the Stock Connect target securities list, adding ZJ INNOLIGHT (03308.HK), effective that day. ZJ INNOLIGHT is a leading supplier of high-speed optical modules for AI data centers, having completed its "A+H" dual listing on the Main Board of the Hong Kong Stock Exchange on 30 July—the largest Hong Kong IPO of the year so far. Following its inclusion, mainland investors can trade its H-shares directly through the Stock Connect channel.

2. HSI Quarterly Review Continues to Resonate: 54 Stocks Poised for September Inclusion, Expected to Trigger HKD 38.6 Billion of Flows

On 26 August, SPDB International issued a research note stating that the quarterly review results published by Hang Seng Indexes Company on 21 August take effect on 7 September. The HSI adds HUA HONG GRACE (01347.HK) and WEICHAI POWER (02338.HK); the HSTECH adds ILUVATAR COREX (09903.HK) and removes TONGCHENGTRAVEL (00780.HK). Passive funds tracking the three major indices total approximately HKD 796.3 billion, implying approximately HKD 38.6 billion of two-way flows. The Hang Seng Composite Index added 61 companies this time, of which 54 stocks including XIZHI TECH-P (01879.HK), HENLIUS (02696.HK) and SIGENERGY (06656.HK) are expected to be included in Stock Connect on 7 September.

DIAGENS-B (02526.HK) announced on Monday its inclusion in the Hang Seng Composite Index and the Hang Seng Hong Kong-Listed Biotech Index, effective 7 September, having met the criteria for Stock Connect inclusion and being the sole new addition to the biotech index. STAR SPORTS MED (01609.HK) announced on Wednesday its selection as a Hang Seng Composite Index constituent, effective 7 September, with shares expected to meet the inclusion criteria for Shanghai and Shenzhen Connect trading.

3. SHEIN-W's Public Offering Closes; Listing Set for 1 September

On 27 August, global online fashion retailer SHEIN-W (00625.HK) closed its public offering. The offer price ranges between HKD 47.6 and HKD 49.5 per share, with a board lot of 100 shares. Margin financing totaled HKD 6.465 billion, implying an oversubscription multiple of approximately 4.66 times based on the public offering size of HKD 1.386 billion. The company expects to announce results on 31 August and list on 1 September. The IPO has attracted seven cornerstone investors, including Huang River, an affiliate of Tencent, subscribing for a combined approximately USD 383 million.

4. Medcaptain Medical Technology Kicks Off Public Offering; Listing Expected on 7 September

On 28 August, medical device supplier Medcaptain Medical Technology Co., Ltd. (02041.HK) announced details of its Hong Kong offering, planning a global offering of 38,910,600 H-shares at HKD 15.42 per share, with a board lot of 100 shares and an application fee of approximately HKD 1,557.55. The offer period runs until 2 September, with listing expected on 7 September.

5. Multiple Companies Disclose Interim Results

TIANQI LITHIUM (09696.HK): First-half revenue of RMB 12.242 billion, up 153.32% year on year; net profit attributable to the parent of RMB 4.242 billion, surging 4,925.46% year on year, mainly due to higher average selling prices and sales volumes of lithium products versus the same period last year.

CCTC (06951.HK): First-half total operating revenue of RMB 6.423 billion, up 54.8% year on year; net profit attributable to the parent of RMB 1.932 billion, up 56.2% year on year, benefiting from growing demand in the electronic components and optical communications industries.

GUSHENGTANG (02273.HK): First-half revenue of RMB 1.653 billion, up 10.57% year on year; profit attributable to shareholders of RMB 221 million, up 45.54%; proposed interim dividend of HKD 1.15 per share, up nearly 2.29 times year on year.

LEAPMOTOR (09863.HK): First-half total operating revenue of RMB 38.107 billion, up 57.2% year on year; profit attributable to shareholders of RMB 208 million, up 530.97%.

SINOPEC CORP (00386.HK): First-half revenue of RMB 1,436.561 billion, up 2% year on year; net profit attributable to the parent of RMB 25.627 billion, up 19.3%.

CHINA XLX FERT (01866.HK): Positive profit alert on Monday, expecting first-half net profit up 52% to 62%.

JIASHILI GP (01285.HK): Positive profit alert on Tuesday, expecting first-half net profit up approximately 640% to 663%.

LEE'S PHARM (00950.HK): Positive profit alert on Tuesday, expecting interim net profit up 26% to 41%.

5100 XIZANG (01115.HK): Positive profit alert on Tuesday, expecting interim net profit up over 90%.

6. Multiple Companies File for HKEX Listing

According to HKEX disclosures, multiple companies including RED AVENUE NEW MATERIALS (603650.SH), Qian Da Ma International Holdings, Jinzhiwei AI and InventisBio Co., Limited (688382.SH) submitted listing applications to the HKEX Main Board this week. Youdi Robotics passed the HKEX listing hearing.

IV. Stock Connect-Related A-Share ETF Rankings (Weekly Focus)

This week, Stock Connect-related A-share ETFs showed a pattern of "innovative drugs strong first and weak later, tech ETFs under pressure, and internet ETFs volatile."

For innovative drug ETFs, Tuesday's broad rally was driven by the CRO/innovative drug surge—the China Universal CNI HK Equities Innovative Drugs ETF (159570) turned over RMB 2.069 billion on Tuesday, up 0.96%; the Invesco Great Wall CSI HK Equities Innovative Drugs ETF (513780) turned over RMB 920 million, up 3.24%; the Wanjia CSI HK Equities Innovative Drugs ETF (520700) turned over RMB 741 million, up 3.11%; and the ChinaAMC CSI HK Equities Health Care Theme ETF (520510) jumped 4.65% on RMB 576 million of turnover with a turnover rate of 239.59%. Innovative drug ETFs extended gains on Wednesday: the China Universal CNI HK Equities Innovative Drugs ETF turned over RMB 2.654 billion, up 2.86%; the Yinhua CNI HK Equities Innovative Drugs ETF (159567) turned over RMB 1.279 billion, up 2.82%; and the E Fund Hang Seng HK Innovative Drugs ETF (159316) turned over RMB 1.128 billion, up 2.48%. They continued higher on Thursday: the China Universal CNI HK Equities Innovative Drugs ETF turned over RMB 2.094 billion, up 1.26%, and the Yinhua CNI HK Equities Innovative Drugs ETF turned over RMB 986 million, up 1.10%. On Friday, innovative drug ETFs corrected collectively: the China Universal CNI HK Equities Innovative Drugs ETF turned over RMB 1.687 billion, down 1.77%, and the Yinhua CNI HK Equities Innovative Drugs ETF turned over RMB 816 million, down 1.76%.

For information technology ETFs, weekly moves were highly correlated with AI hardware stocks. On Monday, tech names tumbled, with the Hwabao CSI HK Equities Information Technology Integration ETF (159131) down 3.30% on RMB 1.116 billion of turnover. On Wednesday and Thursday, it rebounded with AI hardware names, gaining 1.88% and 1.03% respectively; on Friday it fell 0.41% on RMB 1.322 billion of turnover. The ChinaAMC CSI HK Equities Information Technology Integration ETF (526000) turned over RMB 575 million on Friday with a turnover rate of 267.83%.

For internet ETFs, the week was broadly pressured. On Monday, the Fullgoal CSI HK Equities Internet ETF (159792) fell 3.05% on RMB 1.501 billion of turnover; it fell 0.51% on Tuesday and 1.37% on Thursday, then rose 0.52% on Friday with RMB 2.376 billion of turnover, the highest in the market. Weighed down by the broad weakness in internet and tech names, internet ETFs showed wide swings this week.

Taken together, the capital flow picture in the ETF market this week was clear—a three-tier heat structure of innovative drug ETFs > internet ETFs > information technology ETFs persisted throughout. The innovative drug complex sustained high activity on CRO concepts and earnings catalysts, internet ETFs swung more widely amid the broad pressure on internet and tech names, and information technology ETFs followed AI hardware stocks in a first-weak-then-strong trajectory.

V. Market Notes

Constituent List Adjustment: One target was added this week—ZJ INNOLIGHT (03308.HK), effective 27 August. ZJ INNOLIGHT is a leading supplier of high-speed optical modules for AI data centers, having completed its "A+H" dual listing on the HKEX in July. No deletions were involved in this adjustment.

HSI Quarterly Review Effective Date Notice: The HSI quarterly review results will be implemented after the close on Friday, 4 September, taking effect on Monday, 7 September. HUA HONG GRACE and WEICHAI POWER will be added to the Hang Seng Index, ILUVATAR COREX will be added to the Hang Seng TECH Index and TONGCHENGTRAVEL removed, and 54 stocks are expected to be included in Stock Connect simultaneously.

Trading Calendar: No approaching market closure days.

VI. Weekly Summary

Hong Kong equities moved lower collectively this week, with the HSI down 1.63% and the HSTECH down 3.38% for the week. The core market narrative revolved around Alibaba's HKD 80 billion placement fully committed to AI: the placement triggered valuation concerns for the technology complex, putting large internet and tech names and AI hardware stocks under broad pressure. The HSI quarterly review continued to resonate: 54 stocks are poised for September Stock Connect inclusion, with an expected HKD 38.6 billion of flows, and beneficiaries such as DIAGENS-B and STAR SPORTS MED surged. ZJ INNOLIGHT's official addition to Stock Connect was the week's biggest highlight in constituent-list adjustments. The CRO/innovative drug complex was strong first and weak later, driven early in the week by big gains in EVEREST MED and ASYMCHEM before correcting with the market on Friday. AI hardware stocks rebounded on NVIDIA's results but remained weighed down for the week by valuation concerns across the internet and tech complex.

On the interconnectivity front, the week brought several major developments: ZJ INNOLIGHT was officially added to Stock Connect; the HSI quarterly review continued to resonate, with 54 stocks poised for September inclusion; SHEIN-W completed its offering for a 1 September listing; and Medcaptain Medical Technology launched its offering for a 7 September listing. These events show Hong Kong deepening its index compilation and market connectivity, with the weight of technology and AI themes steadily rising.

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