Southbound Net Buying Reaches HK$9B; Zhipu Receives HK$4.7B in Added Positions
Claire Weston
Northbound capital net bought HK$9.04 billion on July 13, but the money split sharply within AI — software leader Zhipu alone drew HK$4.7 billion, while AI hardware names were hit with over HK$7 billion in net selling, signaling a live repricing of the AI investment thesis.
HK$9 billion of northbound money — where did it go?
Stock Connect (Shanghai) net bought HK$7.87 billion; Stock Connect (Shenzhen) net bought HK$1.16 billion — a combined HK$9.04 billion.
One thread runs through the flow: add AI software / model-layer names, cut AI hardware / compute-chain names.
This means → Northbound funds are not leaving AI — they are rotating within it, shifting from hardware hype to software substance.
Zhipu's HK$4.7 billion inflow — what is the market buying?
Zhipu (02513) drew a single-day net inflow of HK$4.74 billion, more than half the day's total northbound net buying.
Founder Tang Jie published an internal letter titled *The Great Wave Is Here* on July 11, announcing a two-year "Touch High" plan targeting autonomous agents, self-training, and model safety — with no push for short-term monetization.
In plain terms = Zhipu told the market "we're going for AGI (artificial general intelligence), not quick revenue," and northbound capital voted yes with HK$4.7 billion.
Tracker Fund, NetEase, Alibaba — where did the rest go?
Tracker Fund (02800) drew HK$2.27 billion in net buying. Guosen Securities says the July–August interim-results window will shift market logic from style rotation to earnings verification.
NetEase (09999) drew HK$1.53 billion in net buying, having just been added to the Stock Connect eligible list on June 30. Haitong International expects post-inclusion average daily turnover to reach about HK$3.4 billion, up roughly 60%.
Alibaba-W (09988) drew HK$583 million in net buying; Tencent (00700) saw HK$230 million in net selling.
Why was the AI hardware chain sold off?
Kingboard Laminates (01888), Kingboard Holdings (00148), and YOFC (06869) saw net selling of HK$3.21 billion, HK$1.84 billion, and HK$1.1 billion respectively. Hua Hong Semi (01347) also lost HK$1.03 billion.
Guolian'an Fund noted: semis, AI compute, and optical-module stocks rallied hard in H1, building up large unrealized-gain positions. The correction started with the year's biggest gainers — a textbook profit-taking pattern.
In plain terms = the hardware chain ran the hardest in H1; holders who made enough cashed out first — not a bearish call on AI, just locking in gains.
What did Morgan Stanley's warning say?
Morgan Stanley warned that chip makers show limited pricing power. AI data-center tech stacks are being redesigned to include cheaper in-house chips.
This means → Many hyperscalers now design their own chips, narrowing hardware vendors' pricing moat — related stocks may have overshot on AI spending optimism.
SMIC (00981) bucked the trend with HK$479 million in net buying. This reflects a further split inside hardware — foundry services are favored over finished-chip makers.
Memory chips and what to watch next?
GigaDevice (03986) drew HK$827 million in net buying. A company representative said the pullback tracks the broader offshore market — "our drawdown is roughly in line with SK Hynix, both around 30%-plus."
Guotai Haitong sees rising odds that HK-stock interim results will mark a bottom, with the market returning to fundamentals-based valuation.
Whether northbound funds' intra-AI rotation — adding software/model names, cutting hardware/compute names — foreshadows a repricing of the AI investment thesis will hinge on upcoming interim earnings as the key verification point.
Content is for reference only, not financial advice.