Hong Kong Stocks Are Rallying—Is China Tech Worth Another Look?

China’s internet companies deserve a fresh look. We like the opportunity for a November recovery, particularly in businesses that continue to earn money and whose shares have already gone through a correction.

Investors are taking a harder look at the cost of AI growth, giving these companies’ existing earnings a chance to receive more attention.

On November 5, the Hang Seng Index rose 3.67% and the Hang Seng Tech Index gained 5.55%. Alibaba, Tencent, and Meituan closed up 8.45%, 7.17%, and 6.78%, respectively. Market turnover reached about HK$356.7 billion, with internet platforms at the center of the rally.

That gives the recovery a strong start.

Further gains will depend on whether better business performance produces more cash and a larger return per share.

The Appeal of Businesses That Already Make Money

Investors have more than one way to gain exposure to technology. In Bloomberg’s November 5 report, strategist Marvin Chen described three shifts behind Hong Kong’s strength: a move toward China, a greater focus on value, and interest in internet platforms beyond AI hardware.

The external backdrop is also changing. Guotai Junan International argues that divided government after the U.S. election could ease concerns over aggressive policy changes.

An analysis by Simuwang highlights the role of Treasury yields and dollar funding costs in Hong Kong growth-stock valuations. We think less political uncertainty helps investors return.

Whether rate pressure eases further will influence how far the recovery can go.

The business opportunity matters more to us.…