Northbound funds | Northern Water's turnover net buying amount reached 24.977 billion yuan. Domestic investors are aggressively grabbing shares of technology and Hong Kong stock exchange-traded funds (ETFs). Throughout the day, they added more than 5.5 billion Hong Kong dollars to their position in Tencent (00700).

On February 5th, the Northbound Stock Connect saw a net inflow of 24.977 billion Hong Kong dollars, with the Shanghai-Hong Kong Stock Connect recording a net inflow of 12.481 billion Hong Kong dollars and the Shenzhen-Hong Kong Stock Connect recording a net inflow of 12.496 billion Hong Kong dollars. The stocks that saw the most net buying from Northbound investors were Tencent (00700), TRACKER FUND OF HONG KONG (02800), and BABA-W (09988). The stocks that saw the most net selling were YOFC (06869), HUA HONG SEMI (01347), and Semiconductor Manufacturing International Corporation (00981). Northbound investors continued to focus on technology and internet-related stocks, with Tencent (00700), BABA-W (09988), and MEITUAN-W (03690) receiving net inflows of 5.578 billion, 1.552 billion, and 540 million Hong Kong dollars respectively. In terms of news, Goldman Sachs released a research report stating that 2026 will be a strategic turning point for Chinese internet giants, focusing on three major trends: intensifying competition in consumer-side AI super applications, agent-based features, seamless transactions, social interaction and push capabilities will be key to user retention and application diffusion; cloud business giants' capital expenditure on AI will be crucial for long-term success, similar to Google's AI ecosystem; regulatory and tax concerns are rising again, with investors focusing on the differences and similarities between the regulatory cycles of 2020 and 2021, and worrying about the pressures on corporate profits. Hong Kong ETFs also saw increased positions, with TRACKER FUND OF HONG KONG (02800), Hang Seng H-Share Index ETF (02828), and CSOP Hang Seng TECH Index ETF (03033) receiving net inflows of 4.576 billion, 987 million, and 845 million Hong Kong dollars respectively. Guosen pointed out that they continue to be optimistic about the spring market, focusing on performance layout. The rebound of the US dollar and the rise in US bond yields have had a negative impact on the capital inflow of Hong Kong stocks to some extent. However, the appreciation of the Renminbi remains strong, with steady improvement in Hong Kong stock performance, and they do not believe that the rebound of the US dollar will be sustained, therefore they remain bullish on the future trend of Hong Kong stocks. China Life Insurance (02628) saw a net inflow of 1.239 billion Hong Kong dollars. According to media reports, the government plans to issue around 200 billion yuan of special national bonds to inject capital into some large insurance companies, providing funds to state-owned insurance companies such as China Life and PICC. If implemented, this will be the first time in China to inject capital into insurance companies by issuing special national bonds, with the relevant plans expected to be announced in the first quarter of this year at the earliest. China Mobile Limited (00941) received a net inflow of 564 million Hong Kong dollars. Morgan Stanley believes that the three major telecommunications operators will face pressure on net profit in 2026 due to the increase in value-added tax rates. Among them, China Mobile Limited will be less impacted due to its higher profit margin. The operators will offset the negative impact through price increases, cost optimization, and growth in AI cloud services. With the current price correction, the high dividend yield still remains attractive, maintaining a "buy" rating. POP MART (09992) received a net inflow of 391 million Hong Kong dollars. Guosen stated that based on recent trends, the company's new products PUCKY Knock Knock series and Star Man Fluttering Heart series were sold out on the official website, with second-hand platforms offering significant markups. The hidden markups for PUCKY Knock Knock/Star Man Fluttering Star blind box are around 2-3 times/3-6 times, and regular markups are between 70-200%, expecting an increase in IP momentum driven by the Chinese New Year holidays and popular products. Chip stocks were sold off again, with HUA HONG SEMI (01347) and Semiconductor Manufacturing International Corporation (00981) experiencing net outflows of 362 million and 308 million Hong Kong dollars respectively. AMD's fiscal 2025 fourth quarter report showed revenue exceeding 10 billion US dollars last quarter, maintaining a year-on-year growth rate of over 30%, with EPS profit growth slowing but higher than analyst expectations by nearly 16%. However, some analysts believe that while AMD reported better-than-expected revenue and profit performance, the guidance for the first quarter fell short of expectations. In addition, XIAOMI-W (01810) and EAST BUY (01797) received net inflows of 500 million and 120 million Hong Kong dollars respectively. Meanwhile, YOFC (06869) saw a net outflow of 456 million Hong Kong dollars.