Southbound Capital Net Sold Nearly HK$6B; Zhipu AI Received Over HK$2.8B in Single-Day Buying
Alina Collins
Southbound Connect net-sold HK$5.995 billion on July 10, yet the move was not a broad retreat — Zhipu alone drew HK$2.843 billion in net buying, signaling a clear rebalancing from AI hardware into AI software.
Are southbound funds leaving or rotating?
Southbound (Shanghai) net-sold HK$3.344 billion; Southbound (Shenzhen) net-sold HK$2.651 billion — a combined HK$6 billion outflow.
The single largest net-sold name was Tracker Fund (02800), a passive index ETF, at HK$4.698 billion.
This means → the bulk of the selling was a redemption of broad Hong Kong equity exposure, not a stock-by-stock bearish call. It looks like portfolio reallocation, not panic.
Where did the money go?
Zhipu (02513) drew HK$2.843 billion in net buying — the day's top inflow by a wide margin.
CLSA noted Zhipu recently completed a roughly HK$31.4 billion placement, materially strengthening its balance sheet. The broker expects breakeven a year ahead of schedule, by 2028.
This means → southbound money is not chasing "AI as a theme." It is betting on a specific timeline for large-language-model companies to turn cash burn into commercial revenue.
GigaDevice (03986) drew HK$648 million and Alibaba-W (09988) drew HK$458 million — both on the software and platform side.
Why were AI hardware names sold?
Hua Hong Semi (01347) saw HK$840 million in net selling; YOFC (06869) lost HK$708 million; SMIC (00981) lost HK$509 million; Kingboard Laminates (01888) lost HK$270 million.
Guolian'an Fund said the semiconductor, computing-power, and optical-module trades had become crowded after a strong first-half rally, with large unrealized gains across the sector. The correction started with the names that had risen the most.
In plain terms = these stocks had already run up sharply this year. Early holders locked in profits — classic profit-taking, not a fundamental downgrade.
Why was Tencent on the sell list too?
Tencent (00700) saw HK$2.863 billion in net selling on the day.
Separately, reports emerged that Tencent is in talks to take a stake in AI-agent startup Manus, expected to acquire the largest equity share at a US$2 billion valuation, unwinding Meta's earlier acquisition plan.
This means → Tencent itself is doubling down on the AI software layer, but the market's short-term reaction was "sell first, ask questions later" — funds are waiting for deal details to land.
What to watch next?
Guotai Haitong said Hong Kong stocks have entered a phase of concentrated micro-liquidity shocks this week. Once the short-term impact is absorbed, the market should return to a rational reassessment of fundamental value.
This reflects an institutional read: the current correction is a natural unwinding of crowded positioning, not a trend reversal.
The single metric to watch is the pace at which large-model commercialization delivers revenue. Whether companies like Zhipu hit their timeline will determine if this hardware-to-software rotation is a short-term trade or a medium-term trend.
Content is for reference only, not financial advice.