Reasons for the Rise in Hong Kong Technology Shares | Could Q4 Be Another?

Performance of HKEx Technology Shares 2025

Hong Kong stocks gained further after the National Day holiday, $Hang Seng Index(800000.HK)$ Breaching the 27000 point barrier, the highest since August 2021, $Hang Seng TECH Index(800700.HK)$ It hit the 6600 point mark, reaching a new high in December 2021. Reflecting today's performance in the third quarter of 2025, the Hang Seng Index increased 11.6% from the third quarter and the Hang Seng Tech Index increased 21.9% in the third quarter.

ConstituentStocks in Hang Seng Index Current, Chip Stocks $SMIC(00981.HK)$ The best performance in the quarter, increased by 78%, $ZIJIN MINING(02899.HK)$ and $BABA-W(09988.HK)$ They also increased by 62.6% and 61.2%, respectively. In terms of generic component shares, $HUA HONG SEMI(01347.HK)$ It rose 130% in the third quarter, making it the strongest performing stock in the sector. $NIO-SW(09866.HK)$ It rose 109% in the third quarter, making it the second-biggest gainer in the sector. $SENSETIME-W(00020.HK)$ Increased by almost 94% in Q3, ranking third in the field of science improvement. AI Concepts rose differently than its shares. Following Baidu's discovery, it rose 60% in the third quarter, making it the sixth largest LIT index share.

In fact, in the first half of 2025, the Hang Seng Index outperformed the Hang Seng TECH Index, rising 20% and 18.7%, respectively. The main reason is that the funds in the first half of the year are tracking higher earnings and value stocks. According to the growth in Technology stocks and growth stocks in the third quarter, the Dow's year-to-date gain has grown to 49.6%, far higher than the Hang Seng Index's 36%.

Technology stocks showed good tracking in Q3, mainly due to the improvement in AI technology levels in the country, with several different research reports and Industry analyses showing that related technologies in the Mainland are making good progress. This includes domestic semi-conductors ( $Cambricon(688256.SH)$ Up 120% in Q3 and related technologies for AI models. As upstream technology shows improvement, downstream AI applications have begun to proliferate, such as Alibaba's recent performance showing a 3-digit increase in AI-related product revenue for eight consecutive quarters. Articles published in May at the time of the results of the AriReasons behind the surge after Ali resultsIt is also mentioned that Sullivan released the latest “China GenAI Market Insights: Enterprise Large Model Calling Panorama Study, 2025”, which reports that China's enterprise-class model calls are growing exponentially, with a 363% increase in daily calls in the first half of 2025 compared to the end of 2024, currently exceeding 10 trillion Tokens.

For investors in the immature Technology Industry, it is difficult to understand why the country's good image is becoming so stressed in a short period of time. As a matter of fact, the development of the entire Technology Industry is formed by a series of interconnected events. Today's practitioners will briefly introduce the events of the coming years and the main reasons for guiding the market to correct regulatory changes:

Key drivers of HKEx Technology share growth

1. Breakthroughs in AI models

DeepSeek's emergence in the first quarter of this year's DS hit the global market. Mentioned several times in the missing article, and this is not a particular disadvantage of the DS model, the main thing is that with the first news, the LLM model with high performance and competitive strength can be provided by the changes in model and technology in the country. This led to the emergence of the AI Industry, according to Jevins, the application of the diversity and scale model of all AI products, addressing the issue of the lack of AI ROI in the market for years, and this is not a major factor for Hong Kong stocks and US equities.

In terms of model technology, mainstream analysis generally considers the chatgpt model from OpenAI to have the strongest current advantage. However, it is important to note that one of the reasons why funds are interested in the CIP model is the impediment to the advancement of leading products, such as limited space for progress in GPT5, and even less analysis indicates a deviation from GPT4.0/4.5; or $Meta Platforms(META.US)$ There are too many manpower and a lack of excellent team leadership when it comes to AI development. The strongest performance in the US equity market this year is that technology has lagged $Alphabet-C(GOOG.US)$ 。 In the AI Technology Industry in November 2019, leading technology improvement steps towards building opportunities that other companies have followed.

2. Breakthrough in Operational Power

The Mainland AI Technology Industry has a direct problem with the lack of computing power, mainly from chip limitations from the US, the success of the immediate use of DS, and the problems of direct computing that are currently available, major chip limitations from the US, the success of DS, and the English currently available in use WITH NVIDIAH20, COMPUTING POWER IS THE ROLE OF THE ENTIRE AI DEVELOPMENT CORE. With the advent of Q1 DS, the H20 chip is further within the US ban range, which is the main reason why Technology stocks advanced in the second quarter of this year.

The supply of H20 is expected to resume soon after the arrival of the Central US in July. However, the reason why NVIDIA's H20 has become a lagging technology product, is because the H20 has become a lagging technology product. THE NEW PRODUCT B30A IS THE OTHER, BUT THE FEEDBACK TO THIS DAY HAS BEEN MILD. The main reason is the approval of domestic chip technology.

Articles in August”Hong Kong Stocks Resist Strong Downward, Short-Term Market FocusAt the moment, according to the success of one of the Huawei CDS strategy in August, the server platform connected to the 384Q910C chip chain has a profitability of 47.9%.

The core content of this report is a bullish view of China's Semiconductor Industry, with information coming out of China that only domestically produced chip technology is flat, but scaling up strategies such as scale up can be scaled up. The demand for conductive semiconductors requires the development of growth.

With the release of some domestic lithography machines at the end of the third quarter, the market has seen an improvement in the production ratio of these semiconductor companies, as evidenced by the movement of gross margins and profits. Stocks that are semiconductors have increased significantly to a strong PE.

FOLLOWING THE ABOVE REPORT, CONTROVERSY HAS EMERGED IN THE U.S. MARKET REGARDING NVIDIA GPUS AND EMERGING ASIC, ASIC'S POPULARIZATION THIS YEAR IS MARKET RECOGNITION, LEADING TO $Broadcom(AVGO.US)$ One run to win $NVIDIA(NVDA.US)$ 。 About ASIC, Alibaba, Baidu and $XIAOMI-W(01810.HK)$ The recent development of technology, which came from research chips many years ago, is undoubtedly strongly related to the popularization of ASICs.

Outlook for Hong Kong Technology Shares

Momentum for valuation revaluation to continue into Q4?

Currently, the demand for computing power in the entire AI market is extremely high. Despite the inability of Chinese or US companies to increase the capital support of the AI industry, the US and the related Industry Chain of Equities remains strong. Many companies are currently underestimating their entire computing power requirements. Since the market has not experienced significant losses, the market is now looking at these AI-built Industry Chains, which have been transferred to the use of PEGs (this earnings ratio) or PS (market rate). Since the market has a strong bullish outlook, this path of appreciation is difficult to assess to the top. Relying on the value levels of the benchmark and science indicators, the target for the fourth quarter is conditioned to be more bullish.

In the US market, $CoreWeave(CRWV.US)$ und $NEBIUS(NBIS.US)$ As an example, it is possible to obtain a large volume of orders from one gas, so the historical data used for PS will be ten percentage points. To make the decision to the bottom is whether the valuation is higher and the risk of risk of loss, for example, the port shares $XTALPI(02228.HK)$ THE SHARE PRICE IS UP 150% THIS YEAR, WITH A HIGHER SALES RATE OF 86 PER CENT. THE MARKET IS IMPORTANT BECAUSE THE COMPANY IS ABLE TO OBTAIN LARGE ORDERS AND DRUG DEVELOPMENT RESULTS, SO IT IS NOT POSSIBLE TO LOSE VALUE IN TERMS OF HIGH-VALUE UNITS.

It is recommended that investors pay more attention to Industry related news and see how AI-related technologies continue to proliferate. With regard to AI-Agent and Physical AI, it is very likely to continue to be the focus of the Industry. Trade with technical analysis at the time of entry into the market of the short line. Examples of Accidents in the Industry Chain in the Third Quarter $KUAISHOU-W(01024.HK)$ Ariary, Chinese stocks and Chinese interest reports are very far from 10 antennas at the moment. Stocks that have risen sharply on these fundamental levels are the most stable strategy is a split collection, or the alternative to the options strategy such as protective put or short put trading.

What are the shares of HKEx Technology?

In terms of stock options, Large Technology shareholders who have continued to follow up with recommendations after a year of drawdown ~

1. AI large model companies such as $BABA-W(09988.HK)$ $TENCENT(00700.HK)$ $BIDU-SW(09888.HK)$ $SENSETIME-W(00020.HK)$

2. AI Infrastructure: $SMIC(00981.HK)$ $HUA HONG SEMI(01347.HK)$ $YOFC(06869.HK)$ $ZTE(00763.HK)$

For advanced investors, only the upward trend of the indices and science indices does not change. In the top AI Industry Chain investments, technical analysis can be used to follow a number of strong Medium Market Cap Stocks (Market Value: MarketCap300~100 billion left). The following are some of the Stocks that consumers are starting to pay attention to.

$FOURTH PARADIGM(06682.HK)$ The company's main AI solution from the platform center AI solution, AI agent began to expand in enterprise applications. In the first half of the year, the company's revenue increased 40% year-on-year to RMB2.63 billion, with a year-on-year PS sales of 5.3 percent. Stocks that are held in Kitasui have a share ratio of nearly 50%.

Technical analysis: The share price is still above the wave position so far. Moving averages are “multi-headed”. In the short term, 20 antennas can be considered as an offset position.

$GDS-SW(09698.HK)$ As a leader in domestic data centers, plus the company's good overseas performance, and China's leading high performance data center development and operator, GDS's core business is to provide cloud infrastructure that directly supports AI's training, management and other computing needs, so that it can stay connected. THE MARKET SALES RATE IS CURRENTLY AROUND 5.5M TO THE LEFT, THE MARKET HAS A HIGH DEMAND FOR COMPUTING POWER, PLUS SOME AI INFRASTRUCTURE HAS A GOOD UPGRADE, AND THE VALUATION IS CONDITIONALLY MOVING UPWARDS.

Technical analysis: The share price has remained in an upward channel since the second quarter of this year, and the short-line realignment to 10 antennas may be considered to be a volatile trade, without a drop of 50 antennas from the middle line.

$GEEKPLUS-W(02590.HK)$ The company's main business includes selling autonomous mobile mechanics (ARM) solutions and providing mechanical services (RAAS). With the development of Physical AI in the country, dynamic trading is possible at the peak of the stock market, and short lines for 10 days serve as support.

Futu Securities, Chief Analyst, Hui Chi-Lok

(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the proposed issuer of shares)