Undervalued Hong Kong Tech Leaders Poised for May Breakout

Chinese technology stocks in spring 2026 stand at a delicate watershed. On one side, global AI computing token consumption has surged exponentially, exceeding 140 trillion daily by March, marking AI’s leap from laboratory ideals to commercial monetization. On the other side, secondary‑market investors remain anxious amid extreme rotations, searching for the next main wave of AI commercialization.

Against this backdrop, Noah Tech Smart Selection Mixed Securities Investment Fund will be issued on May 6. Managed by Deng Xinyi, Deputy General Manager of Noah Fund’s Equity Investment Division and Head of Research, the fund will allocate across quality A+H technology companies, focusing on AI applications, domestic computing power, and future industries, offering investors a vehicle to capture opportunities in the AI era.

Technology stocks have never offered easy wins. The core contradiction in tech investment has shifted from capital expenditure narratives to earnings. Overseas giants are extending server depreciation periods, while domestic ASIC custom chips are building full‑stack hardware barriers. Investment logic must move from buying stories to analyzing data. Noah Tech Smart Selection is built on penetrating industry research. Deng Xinyi emphasized at the “China Tech — Ignite! 2026 Noah Fund Tech Investment Conference” that investors must focus on whether technological development creates real demand and whether demand translates into performance, thereby judging long‑term value in classic pricing models.

Examples illustrate this logic. In high‑density clusters, silicon photonics CPO and OCS technologies are on the verge of breakthrough. In storage cycles, KV Cache growth directly catalyzes HBM and DRAM price and volume increases. These certainties, validated across the industry chain, underpin the fund’s issuance during this period of rapid iteration. Deng seeks to define “smart tech selection” through a logic combining macro judgment, meso‑level industry analysis, and micro validation. The fund will allocate to fast‑iterating, innovation‑focused, growth‑driven tech fields. Stock assets will account for 60%–95% of fund assets, with tech holdings no less than 80% of non‑cash assets, locking in companies with true investment value.

The A+H strategy reflects valuation complementarity. A‑shares provide elasticity from industry breakthroughs, while Hong Kong allocation of up to 50% seeks cost‑performance. Compared with A‑share peers, Hong Kong offers internet giants and advanced manufacturers with proven profitability. As of April 23, 2026, Wind data show China’s Strategic Emerging Industries Index had a PE of 67.98x, at the 3.73% percentile, historically low; the CSI Hong Kong Stock Connect Tech Index PE was only 25.37x, at a medium‑low level, making Hong Kong tech a prime low‑valuation choice. Thus, A+H allocation leverages liquidity differences for valuation complementarity. Hong Kong’s low valuations not only smooth single‑market volatility but also provide excess premium when rallies start, thanks to high beta.

Guotai Haitong Securities noted Hong Kong’s micro‑liquidity pressure has eased. Foreign capital is returning, driven by mainland macro stability and Hong Kong’s renewed recognition as an international financial center. Regulatory clarity is expected to make IPO pacing more prudent, optimizing supply. Hong Kong’s fundamentals are also strengthening. Guotai Haitong said domestic models’ superior token efficiency has stood out globally, with token exports sparking fundamental reversal. If North American tech giants’ Q1 reports confirm strong AI demand, Hong Kong tech may see a “Davis double‑hit.” Huatai Securities strategist Li Yujie added that Hong Kong’s 2026 drivers have shifted from valuation and liquidity to earnings. For China’s AI industry, she advised investors not to focus only on chips or applications, but to allocate across the full industry chain bottom‑up.

Fund manager capability is critical. Deng Xinyi’s Noah Steady Return Mixed A achieved two‑year NAV growth of 201.7% versus a benchmark of 24.39%, creating 177.31% excess return, ranking 9th of 471 peers. Her Noah Research Preferred Mixed A grew 107.45% over two years, versus 27.07% benchmark, creating 80.38% excess return. More critical than returns is drawdown recovery: in two years of high volatility, maximum drawdown was 20.06%, but recovery took only 21 trading days. Sharpe ratio was 1.65 and Calmar ratio 3.67, reflecting strong industry allocation and risk control.

Her timing ability has been proven. In September 2024, she added CPO on dips, capturing rebounds. In early 2025, she pre‑positioned AI applications, benefiting from the narrative shift from hardware to software. Quarterly reports show holdings rotated across CPO, optical modules, AI applications, computing, and optical communications, with names like Tianfu Communication, Zhongji Xuchuang, Chipone, Cambricon, and Hygon appearing. Deng combines rigorous training — a Tsinghua bachelor and Penn master — with institutional perspective, emphasizing independent thinking, macro data analysis, meso industry mapping, and micro company selection, supported by Noah’s tech team.

Looking ahead, competition will be a long race on how “new productive forces” embed into industry. Domestic macro policy continuity is the strongest support, with fiscal funds directed to key areas, building physical defenses and computing sovereignty. On AI, Deng described demand creation as “mechanized brain labor,” amplifying productivity. She believes AI investment opportunities are clearer, with models evolving rapidly, computing demand matching, and applications reshaping productivity and interaction paradigms. Model barriers lie in sustained investment and unique data. Models are products, data are models, reshaping software applications. On the application side, “true monetization” will be the touchstone. Noah Tech Smart Selection will focus on applications solving productivity pain points with high‑quality private data loops, such as AI for Science, AI for Business, autonomous driving, and decision‑making agents.

Computing power is the foundation. Training and inference needs are diverging. The fund will focus on domestic computing, including ASIC chips, advanced processes, high‑density interconnect, and storage entering a price‑volume upcycle. Deng also looks to future hard tech: semiconductor innovation, new products like robotics, commercial space, and high‑end equipment, and building secure, efficient ecosystems in global supply chain restructuring. Noah Tech Smart Selection will also track six future industries: quantum tech, bio‑manufacturing, hydrogen and fusion energy, brain‑computer interfaces, embodied intelligence, and 6G. Deng stressed discipline and aesthetic consistency, using A+H flexibility to manage volatility.

As a 22‑year‑old public fund, Noah has always prioritized tech investment, supporting 740 IPOs and holding RMB 33.844 billion in “new productive force” stocks. Its tech product matrix spans semiconductors, AI, space, and biotech, aiming to share industry dividends and deliver sustainable returns.