HK Stock Connect Weekly: HSI Gains 0.87% for the Week as Southbound Outflows Reach HK$11.036 Billion - 20261030

I. Weekly Market Overview

Hong Kong equities diverged in the week of October 26 to October 30. The Hang Seng Index rose 0.87% over the week to close at 23,294.42, the Hang Seng TECH Index fell 3.02% to 3,754.90 and the Hang Seng China Enterprises Index gained 1.37% to 7,862.22. Average daily turnover was about HKD 187.9 billion, with the five sessions printing HKD 175.8 billion, 178.3 billion, 181.4 billion, 189.5 billion and 214.3 billion respectively, rising steadily and expanding notably on Friday.

Southbound capital recorded net selling on all five sessions: HK$2.075 billion on Monday, HK$1.238 billion on Tuesday, HK$804 million on Wednesday, HK$3.359 billion on Thursday and HK$3.560 billion on Friday. Net outflow for the week totalled HK$11.036 billion, comprising HK$3.055 billion via Stock Connect (Shanghai) and HK$7.981 billion via Stock Connect (Shenzhen). The two channels diverged twice: Shanghai recorded net buying of HK$56 million on Wednesday and HK$782 million on Thursday, while Shenzhen sold heavily on both days (HK$860 million and HK$4.140 billion).

II. Review of Hot Sectors This Week

1. Semiconductors and AI Hardware: Two Rebound-and-Relapse Cycles

On Wednesday, SK Hynix reported a more than sixfold rise in third-quarter operating profit and foundries including TSMC were reported to be preparing 10% to 20% increases in CoWoS quotes, lifting the sector for a session as HUA HONG GRACE gained 8.44% and SMIC 5.43%. On Thursday, Alphabet missed both revenue and profit estimates and the HSTECH fell 2.84%, with SMIC down 5.94% and HUA HONG GRACE down 7.71%. On Friday, Intel guided the fourth quarter below expectations and SMIC fell another 4.40%, GIGADEVICE 8.06% and ILUVATAR COREX 8.41%. For the week SMIC lost 8.67%, HUA HONG GRACE 10.01% and GIGADEVICE 9.43%.

2. Consumer and Dividend Plays: Leadership Rotates In on Friday

Hong Kong consumer names were broadly active on Friday, with China Universal CNI HK Equities Consumption Theme ETF up 4.43%, Invesco Great Wall Hang Seng Consumption ETF(QDII) up 3.64%, MENGNIU DAIRY up 9.42%, MIXUE GROUP up 8.17% and MAO GEPING up 13.80%. Dividend and financial names also performed, with the southern China-enterprise dividend ETF up 1.82% on Monday and ChinaAMC CSI HK Equities Interior Finance ETF up 1.80% on Friday, as Hong Kong banks, insurers and coal names advanced.

3. Pharmaceuticals: Sharp Divergence Among Single Names

DUALITYBIO-B fell 27.93% on Tuesday after the company and BioNTech reported topline results from the Phase III DYNASTY-Breast02 study late the previous evening: progression-free survival met the primary endpoint but overall survival data remained immature and interstitial lung disease occurred more frequently than in prior studies. Pharmaceutical sentiment recovered on Wednesday, with GF CSI HK Innovative Drugs Industry ETF(QDII) up 2.86%, and GENSCRIPT BIO drew HK$133 million of southbound net buying on Friday, the largest of the day.

4. Recent Listings and Brain-Computer Interfaces: Sharp Rally, Then Pullback

BRAINAURORA-B rose 27.13% on Tuesday and 52.30% on Wednesday, fell 16.48% on Thursday on HK$1.513 billion of turnover and a turnover rate of 59.09%, then rebounded 7.24% on Friday. 160 HEALTH gained 45.88% on Thursday and gave back 8.99% on Friday, while BAIGE DIGITAL rose 27.81% on Monday and 11.35% on Friday.

5. Oil and Petrochemicals, M&A: Event-Driven Moves

Middle East supply risks lifted Fullgoal S&P Oil & Gas Exploration and Production Selected Industry ETF(QDII) by 3.58% on Tuesday, and oil and petrochemical names advanced on Friday as SHANGHAI PECHEM gained 10.31%, China Petroleum & Chemical Corporation 6.22% and PetroChina 5.66%. On the M&A side, EVERG SERVICES resumed trading on Friday after PAG agreed to acquire a 51.016% stake for HK$4.026 billion and to launch a general offer at HK$0.8359 per share; the stock fell 17.72% on resumption.

III. Key Stock Connect Events

1. Southbound Net Outflow Reaches HK$11.036 Billion for the Week

Southbound capital was a net seller on all five sessions, with outflows totalling HK$11.036 billion. Friday accounted for the largest single-day outflow at HK$3.560 billion, split into HK$2.261 billion in Shanghai and HK$1.299 billion in Shenzhen, while Wednesday was the smallest at HK$804 million. At the stock level, SMIC led net selling on Friday at HK$999 million, followed by XIAOMI-W at HK$686 million and ALIBABA-W at HK$649 million; GENSCRIPT BIO led net buying at HK$133 million.

2. PAG to Acquire a 51.016% Stake in EVERG SERVICES for HK$4.026 Billion

On Friday, EVERG SERVICES announced that the sellers and the offeror entered into a share purchase agreement on October 28 covering 5.515 billion shares, or about 51.016% of the issued share capital, for total cash consideration of HK$4.026 billion. The offeror is ultimately owned by PAG and will become the new controlling shareholder, launching a general offer at HK$0.8359 per share, a discount of about 29.5% to the pre-suspension close of HK$1.185. Trading was suspended on October 29 and resumed on October 30, when the stock closed at HK$0.975, down 17.72%.

3. 160 HEALTH Surges 45.88% as Its Subsidiary Signs a First AI Computing Order of About RMB 42 Million

160 HEALTH rose 45.88% on Thursday to HKD 3.45 on HK$883 million of turnover and a turnover rate of 80.40%. In an announcement on the evening of October 13, the company said its indirect wholly-owned subsidiary had signed a first sales contract worth about RMB 42 million with a national high-tech enterprise focused on enterprise-grade computing infrastructure, following a strategic framework agreement signed on September 16 that estimated total cooperation of about RMB 650 million. First-half 2026 revenue was about RMB 319 million, up 9.7%, with profit attributable to owners of RMB 2.137 million against a prior loss.

4. DUALITYBIO-B Falls 27.93% as Overall Survival Data Remain Immature

On Tuesday, DUALITYBIO-B and BioNTech reported topline results from the global Phase III DYNASTY-Breast02 study. The core candidate met the primary endpoint of progression-free survival, but overall survival data remained immature and interstitial lung disease occurred more frequently than in prior studies. The stock opened 14.98% lower, hit an all-time low of HKD 100.20 intraday and closed at HKD 106.30, down 27.93% on HK$798 million of turnover.

5. BRAINAURORA-B Rallies for Two Sessions, Then Retraces

BRAINAURORA-B rose 27.13% on Tuesday and 52.30% on Wednesday to HKD 1.82 on HK$1.060 billion of turnover and a turnover rate of 49.97%. At the industry level, a domestic brain-computer interface developer announced on Wednesday that it had completed a RMB 700 million Series B to fund multi-centre registration trials and regulatory approval of a fully implanted, fully wireless system; the International Organization for Standardization had earlier published the reference architecture standard led by China. The stock fell 16.48% on Thursday.

6. Industry and Corporate Developments at a Glance

Grouped by industry, in computing and hardware, Zhongji Innolight reported third-quarter revenue of RMB 27.769 billion, up 171.83%, and net profit of RMB 8.587 billion, up 173.74%, citing continued growth in 800G and 1.6T module sales; Eoptolink posted net profit of RMB 3.843 billion, up 61.15% year on year and down 19% sequentially; XIAOMI invested RMB 1.7 billion in Sunwoda Mobility for a 5.34% stake. In large models, Google released Gemini 4 Carbon, which scored 59 to top the Artificial Analysis intelligence index, and Doubao Work opened third-party models to enterprise clients, adding Kimi, GLM and DeepSeek.

Grouped by event type, on results, GIGADEVICE reported third-quarter net profit of RMB 4.209 billion, up 728.93% year on year and down 21% sequentially. On shareholder actions, Zhongji Innolight proposed reclassifying 5.6531 million treasury shares from equity incentive use to cancellation, repurchased between September 1 and 23 for about RMB 5 billion. On policy and standards, the first six national standards for humanoid robots were released recently, with UBTECH ROBOTICS leading the drafting of several of them.

IV. HK Stock Connect-related A-share ETF Rankings (Weekly Focus)

Semiconductor themes again dominated ETF turnover. Huatai-PB China Securities Han Stock Exchange China Korea Semiconductor ETF(QDII) traded RMB 8.531 billion, RMB 7.959 billion, RMB 20.220 billion, RMB 15.438 billion and RMB 20.734 billion across the five sessions, totalling RMB 72.882 billion and ranking first every day; its daily returns were down 2.99%, down 0.63%, up 8.05%, down 2.79% and down 2.50%.

Innovative drug themes formed the second tier. GF CSI HK Innovative Drugs Industry ETF(QDII) traded RMB 6.391 billion, RMB 6.710 billion, RMB 6.887 billion, RMB 6.025 billion and RMB 8.555 billion, totalling RMB 34.568 billion and ranking second on all five sessions; it rose 2.86% on Wednesday and fell 2.70% on Friday.

Thematic rotation was pronounced: dividend defensiveness led on Monday with the southern China-enterprise dividend ETF up 1.82%; semiconductor and information technology themes rebounded together on Wednesday with Yinhua CSI HK Equities Information Technology Integration ETF up 4.31%; two Brazil ETFs hit the daily limit for a second session on Thursday, with the E Fund product down 10.02%; and consumer themes swept the top five gainers on Friday, led by China Universal CNI HK Equities Consumption Theme ETF at 4.43%.

V. Weekly Wrap-up

Hong Kong equities fell early in the week and recovered later, with the indices diverging. The HSI gained 0.87% and the HSCEI 1.37% for the week while the HSTECH lost 3.02%, on average daily turnover of about HKD 187.9 billion. The main thread was offshore AI capital spending expectations: SK Hynix results and CoWoS price expectations lifted semiconductors on Wednesday, Alphabet's earnings drove a 2.84% single-day drop in the HSTECH on Thursday, and Intel's guidance weighed on the sector again on Friday, when consumer, oil and financial heavyweights supported the index and the HSI closed higher on expanded turnover.

On flows, southbound capital recorded a net outflow of HK$11.036 billion for the week without a single net-buying session, with outflows above HK$3.3 billion on both Thursday and Friday. By structure, Shanghai turned to net buying on Wednesday and Thursday while Shenzhen sold throughout the week and at a larger scale. At the stock level, SMIC, XIAOMI-W and ALIBABA-W led net selling, while GENSCRIPT BIO and KB LAMINATES attracted contrarian net buying.