Mainland investors demonstrated a significant divergence in their appetite for Chinese technology giants on Saturday, pouring more than HK$1 billion into Alibaba Group Holding while offloading Tencent Holdings.
The activity highlights a potential rotation within the sector, as some investors grow cautious about Tencent's near-term profitability. Analysts at Bernstein estimate the tech giant could post mid- to high-single digit operating-profit growth in 2026 as it ramps up investment in artificial intelligence, a slowdown after five straight quarters of double-digit growth.
Overall, Southbound trading through the Stock Connect program recorded a net purchase of approximately HK$71 million in Hong Kong equities for the day. The flows were dominated by a HK$1.074 billion net purchase of Alibaba (9988.HK) and a HK$988 million net buy of Kuaishou Technology (1024.HK). This was offset by a substantial HK$893 million net sale of Tencent (0700.HK).
This targeted buying of Alibaba and Kuaishou suggests a bullish rotation as investors seek exposure to other areas of the Chinese tech market. The selling pressure on Tencent comes as the company plans to more than double its AI investment this year, raising market concerns about slower profit growth. Investors are closely watching for management's updates on its AI strategy ahead of its quarterly results on Wednesday.
This article is for informational purposes only and does not constitute investment advice.
