HK Stock Connect Weekly: HSI Gains 5.09% for the Week as Southbound Outflows Reach HK$3.212 Billion - 20261106

I. Market Overview

Hong Kong stocks rose across the board this week (November 2 to November 6). The Hang Seng Index gained 5.09% over the week to close at 24,481.86; the Hang Seng TECH Index rose 8.61% to 4,078.23; and the Hang Seng China Enterprises Index added 5.24% to 8,274.10. Average daily turnover was about HKD 256.4 billion, with the five sessions recording HKD 204.8 billion, 236.4 billion, 236.9 billion, 356.7 billion and 247.4 billion respectively, peaking on Thursday before easing on Friday.

The market rose for four consecutive sessions from Monday to Thursday, with the HSTECH up 10.64% from the prior Friday at Thursday's close, before all three indices pulled back on Friday, when the HSI fell 1.27% and the HSTECH 1.83%. Southbound funds recorded a net outflow of HK$3.212 billion for the week, comprising net selling of HK$492 million via Stock Connect (Shanghai) and HK$2.720 billion via Stock Connect (Shenzhen). By day, net selling was HK$4.469 billion on Monday, while Wednesday saw the week's largest inflow of HK$23.406 billion and Thursday the largest outflow of HK$21.287 billion; flows turned to net buying of HK$2.415 billion on Friday.

II. Sector Review

1. AI Platforms and Large Models: the Week's Strongest Theme

Platform names led the market all week. TENCENT rose 9.44% over the week, including 7.17% on Thursday, after releasing the official version of its Hunyuan Hy4 large language model on November 4. BABA-W gained 8.09%, including 8.45% on Thursday, as Apple Intelligence for the China market entered beta testing on iOS 27.3 on November 4 with Qwen integrated. XIAOMI-W rose 14.73%, including 8.83% on Thursday. Pure-play model names diverged: Z.AI fell 10.46% on Thursday and 11.87% for the week, while MINIMAX-W fell 8.46% on Thursday.

2. Semiconductors: Earnings Support Offset by a Sentiment Pullback

HUA HONG GRACE rose 15.65% for the week, the strongest semiconductor name, after reporting third-quarter net profit of RMB 835 million, up 136.14% year on year, with Huali Microelectronics consolidated for the first time; the stock rose 15.75% on Wednesday. SMIC gained 6.05% for the week. At the other end, MONTAGETECH fell 11.46% over the week, GIGADEVICE dropped 5.06% on Thursday and ILUVATAR COREX slipped 0.89% for the week, with semiconductors leading Friday's declines as ILUVATAR COREX fell 11.67% in the session.

3. Optical Communication and PCB: Early Gains Erased

YOFC rose 11.49% to HK$107.20 on Monday, then fell 6.25% on Tuesday, 12.48% on Thursday and 10.46% on Friday, ending the week down 10.50% at HK$86.05. ZHONGJI INNOLIGHT fell 10.92% on Tuesday and nearly 9% on Friday, down 15.75% for the week at HK$569.50. KB LAMINATES fell 12.43% on Thursday and 12.34% over the week. The pullback was concentrated on Thursday and Friday, in step with the overnight correction in the US AI supply chain.

4. Innovative Drugs: a Theme That Held All Week

MICOT PHARMA-B surged 62.16% for the week to top the Stock Connect gainers, including 33.22% on Tuesday and 15.19% on Friday, after announcing on the evening of November 4 that it had obtained lead-site ethics committee approval for a Phase III trial of MT200605 in acute ischaemic stroke. ASYMCHEM rose 23.58% for the week, LEBRIN PHARMA-B 18.84%, and INNOGEN-B 17.68% on Thursday. Among ETFs, the GF CSI HK Innovative Drugs Industry ETF(QDII) gained 7.27% for the week on combined turnover of RMB 44.471 billion.

5. Recent Listings and High-Beta Names: Both Extremes

On the upside, KEYTOP PARKING rose 37.59% for the week, SIG ENERGY 32.79%, XD INC 24.90% and JINHAI MED TECH 23.61%. On the downside, GALAXIS TECH fell 46.63% to lead the decliners, followed by DIAGENS-B at 36.80%, YUNYINGGU TECHNOLOGY at 24.43%, DEEPZERO at 24.36% and XIZHI TECH-P at 23.31%.

III. Key Stock Connect Events

1. Southbound Outflows Reach HK$3.212 Billion as Daily Swings Top HK$20 Billion

Southbound funds recorded a net outflow of HK$3.212 billion over the five sessions. Net buying of HK$23.406 billion on Wednesday ended 14 consecutive trading days of net selling since October 13, with the Tracker Fund of Hong Kong drawing HK$16.507 billion, the Hang Seng China Enterprises Index ETF HK$4.309 billion and the CSOP Hang Seng TECH Index ETF HK$4.315 billion. Thursday reversed to net selling of HK$21.287 billion, with the Tracker Fund shedding HK$7.665 billion, the CSOP Hang Seng TECH Index ETF HK$4.392 billion and the HSCEI ETF HK$1.673 billion. At the stock level, TENCENT led Friday's net buying at HK$760 million while XIAOMI-W saw HK$1.224 billion of net selling.

2. Ten ETFs Added to the Stock Connect List, Effective November 9

On October 30, a notice published by the Shanghai Stock Exchange showed that China Investment Information had issued a regular adjustment notice for the list of Stock Connect-eligible ETFs, adding ten products effective November 9, 2026, covering artificial intelligence, technology, high dividend and low-volatility dividend strategies. Hong Kong Exchanges and Clearing announced the same day that the total number of eligible ETFs will rise to 41, spanning 14 issuers.

3. TENCENT Releases Hunyuan Hy4 with 770 Billion Parameters

On November 4, Tencent's Hunyuan team released the official version of Hy4, with 770 billion total parameters and 49 billion activated parameters under a Mixture-of-Experts architecture and a context window of more than one million tokens. Compared with the Hy4 preview launched on August 28, it adds visual understanding and Computer Use for the first time and is already live on Tencent Cloud Tokenhub, Yuanbao, the WeCom smart assistant and ima.

4. Apple Intelligence for China Enters Beta on iOS 27.3 with Qwen in Siri

In the early hours of November 4, Apple released iOS 27.3 Developer Beta 1, marking the first test of Apple Intelligence in mainland China. Apple has partnered with Alibaba to integrate Qwen into three native entry points: Siri, the system writing tools and visual intelligence. The first batch includes live translation, writing tools, visual intelligence, the Photos clean-up tool, Genmoji and notification summaries, while the next-generation Siri AI is not part of this round; the official release is planned for December.

5. SBP GROUP Signs Licensing Deal with Boehringer Ingelheim Worth up to USD 7 Billion

On the evening of November 4, SBP GROUP announced a strategic option and licence agreement with Boehringer Ingelheim covering six preclinical oncology programmes, five of which come from LaNova Medicines, acquired in 2025. The company will receive USD 358 million in upfront and near-term payments plus milestone payments of up to USD 7 billion in total, along with tiered royalties in the high single digits to low teens on future sales. It is the company's third deal with a multinational pharmaceutical company in 2026 and its fifth out-licensing transaction overall.

6. HUA HONG GRACE Posts RMB 835 Million Third-Quarter Net Profit, Up 136.14%

On the evening of November 5, HUA HONG GRACE reported third-quarter revenue of RMB 6.706 billion, up 13.95%, net profit attributable to shareholders of RMB 835 million, up 136.14%, and a gross margin of 24.6%, up 7.6 percentage points year on year. The company completed the acquisition of 97.5% of Shanghai Huali Microelectronics via share issuance and consolidated the unit, lifting the 12 inch share of revenue to 70.7%. It guided fourth-quarter revenue of USD 1.08 billion to USD 1.09 billion with a gross margin of 25% to 26%.

7. ROBOSENSE's Fully Automated LiDAR Line Starts Up in Shenzhen

According to information published on the Guangdong Provincial People's Government website on November 6, the world's first digitalised fully automated LiDAR production line has started operation in Shenzhen, with a comprehensive automation rate of 99% and designed annual capacity of 500,000 units on a single line. ROBOSENSE disclosed cumulative LiDAR sales of 1.3148 million units in the first three quarters of 2026, including 427,800 units for robotics. The stock rose 14.24% for the week, including 6.46% on Friday.

8. Industry and Corporate Updates in Brief

In computing and hardware, JD.com said at the World Internet Conference Wuzhen Summit on November 4 that it plans to build the world's largest embodied AI data collection centre within two years, with JD Logistics planning to procure 3 million robots, 1 million unmanned vehicles and 100,000 drones over five years. ASMPT announced on November 6 that it will retain its SMT Solutions segment and end the strategic review launched in January 2026. Offshore, the US AI supply chain fell sharply on November 4 and 5, with the risk-off mood spreading to Asia-Pacific and weighing on Hong Kong optical communication, PCB and memory names on Friday.

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

The Huatai-PB China Securities Han Stock Exchange China Korea Semiconductor ETF(QDII) held the top turnover position all week, with daily turnover of RMB 21.514 billion, 16.559 billion, 31.566 billion, 18.256 billion and 12.125 billion, for a total of RMB 100.020 billion. Its daily changes were +4.21%, -4.90%, +6.84%, -3.44% and -6.50%, leaving it down 4.40% for the week.

Innovative drug and brokerage products formed the second tier. The GF CSI HK Innovative Drugs Industry ETF(QDII) traded RMB 7.635 billion, 6.806 billion, 9.924 billion, 10.449 billion and 9.657 billion across the five sessions for a total of RMB 44.471 billion, gaining 7.27% for the week. The E Fund CSI Hong Kong Securities Investment Theme ETF traded RMB 6.363 billion, 4.693 billion, 4.271 billion, 3.540 billion and 2.425 billion, totalling RMB 21.292 billion, and rose 4.31% for the week.

For the week, internet and China concept themes led the gainers: the GF China Concept Internet ETF rose 10.54%, the Hwabao CSI HK Equities Internet ETF 10.49%, the Fullgoal CSI HK Equities Internet ETF 10.24%, the E Fund CSI Overseas China Internet 50 ETF 10.09% and the ChinaAMC Hang Seng Technology ETF(QDII) 8.97%. Decliners were led by the Harvest S&P Oil & Gas Exploration and Production Selected Industry ETF(QDII) at -18.62%, the Fullgoal product at -17.69%, the Huaan MAXIS NKY ETF(QDII) at -7.97% and the ICBCCS Daiwa NKY ETF(QDII) at -7.68%.

V. Weekly Wrap-up

Hong Kong equities rose for four sessions before pulling back on Friday, with the HSI up 5.09% for the week, the HSTECH up 8.61% and the HSCEI up 5.24% on average daily turnover of about HKD 256.4 billion. AI platforms and large models carried the market mid-week: the release of Tencent's Hunyuan Hy4 and the start of Apple Intelligence beta testing in China, combined with a strong overnight session for China concept shares, lifted the HSI by 3.67% and the HSTECH by 5.55% on Thursday. On Friday the overnight slump in the US AI supply chain dragged optical communication, PCB and memory names lower, and the HSI and HSTECH fell 1.27% and 1.83% respectively. Southbound funds were a net seller of HK$3.212 billion for the week after swinging sharply day to day, but had turned to net buying by Friday.

On cross-border access, the Stock Connect ETF list completed a regular adjustment with ten products added from November 9, taking the eligible total to 41 across 14 issuers, with the additions concentrated in artificial intelligence, technology and low-volatility dividend strategies. Wednesday's large single-day southbound inflow was channelled mainly through broad-based Hong Kong ETFs, underscoring that ETFs remain the main conduit for cross-border money moving in and out of Hong Kong equities.