Southbound Funds Net Bought HK$14 Billion on August 18, with Alibaba and SMIC Leading the AI Industry Chain
Nashnova编辑部
Southbound capital net-bought HK$14 billion on August 18, concentrated heavily across the AI supply chain — from cloud to foundry to memory. This means → northbound money is loading up link by link along the full AI compute stack.
HK$14 billion in net buys — where did the money go?
Shanghai-Hong Kong Stock Connect net-bought HK$9.79 billion; Shenzhen-Hong Kong Stock Connect added HK$4.21 billion, totalling HK$14.002 billion.
Tracker Fund of Hong Kong (02800) topped the list at HK$3.51 billion — it is an ETF tracking the Hang Seng Index, effectively a one-click bet on the entire HK market.
This means → the single largest flow went not into stock-picking but into laying a broad "base position" first, with the rest deployed into targeted AI-chain names.
Hong Kong lagged global markets — so why is southbound money still buying?
Guoyuan International noted that HK stocks underperformed both US equities and major Asian markets last week, even as offshore rate-hike expectations cooled.
In plain terms = global markets rallied, Hong Kong didn't keep up. But flip the lens: overseas interest rates — the biggest headwind — are turning into a marginal tailwind.
The firm argued that a sustained rally still requires improving Chinese demand and further southbound and foreign inflows. Put simply = rates are no longer the obstacle; the key variable has shifted to China's own fundamentals and corporate earnings.
Alibaba drew nearly HK$2.4 billion — what is the bet?
Alibaba-W (09988) drew net buys of HK$2.399 billion, second only to the Tracker Fund.
China Merchants Securities' logic: AI value is migrating from hardware toward cloud-service providers. Alibaba Cloud, China's largest, has built a moat through full-stack AI deployment — chips, models, and applications all in-house.
The new Qwen3.8max model marked a major capability jump. This reflects Alibaba staying competitive in the large-model race, with the market repricing the cloud unit's growth and profit potential.
Semiconductors drew concentrated inflows — how far has the recovery come?
SMIC (00981) net-bought HK$1.18 billion; Hua Hong Semiconductor (01347) net-bought HK$184 million.
Citi confirmed: China's foundry recovery — contract chipmakers producing chips for clients — has expanded from AI accelerators into mature-node and specialty products.
This means → it is not just cutting-edge AI chips rebounding; orders and pricing on mid-to-low-end production lines are improving too. Citi raised 2026/27 EPS forecasts for SMIC and Hua Hong by 10%–39%, maintaining "Buy" ratings on both.
PCBs and memory — is the "mid-and-downstream" of the AI chain also seeing price hikes?
Kingboard Laminates (01888) net-bought HK$887 million. CITIC Securities noted that copper-clad laminate (CCL — the core raw material for printed circuit boards) is likely to see further rapid price increases short-term, with growing certainty that prices will stay elevated over the medium-to-long term.
GigaDevice (03986) net-bought HK$569 million. Caixin Securities called the memory industry a super-upcycle driven by AI compute demand, with both volumes and prices rising.
SK Hynix Chairman Choi Tae-won stated bluntly: next year will bring the worst "memory shortage" yet. In plain terms = faster AI chips need more and faster memory; the hotter AI gets, the scarcer memory becomes.
Large-model newcomers and other names — what else did southbound funds buy?
Zhipu AI (02513) net-bought HK$501 million. BOCOM International noted that Zhipu released its flagship model GLM-5.3 on August 14; near-term focus is on third-party benchmark updates. The company will report interim results in late August, with annual recurring revenue (ARR) growth the key metric to watch.
WuXi Biologics (02269) net-bought HK$435 million, YOFC (06869) HK$291 million, and Tencent (00700) HK$49.41 million.
This reflects a session where southbound flows were heavily concentrated along the AI compute → semiconductor → infrastructure pipeline. Whether this continues to attract incremental capital depends on how China's fundamentals and corporate earnings deliver in the quarters ahead.
Content is for reference only, not financial advice.