Northbound funds | Northbound trading net sold 5.995 billion, selling off some AI hardware stocks. Continued to aggressively increase holdings in KNOWLEDGE ATLAS (02513) by over 2.8 billion Hong Kong dollars.

On July 10, the Hong Kong stock market saw a net outflow of 5.995 billion Hong Kong dollars from Northbound investments. Of this, the Shanghai-Hong Kong Stock Connect saw a net outflow of 3.344 billion Hong Kong dollars, while the Shenzhen-Hong Kong Stock Connect saw a net outflow of 2.651 billion Hong Kong dollars. The stocks most bought by Northbound investors were KNOWLEDGE ATLAS (02513), GigaDevice Semiconductor Inc. (03986), and BABA-W (09988). The stocks most sold by Northbound investors were TRACKER FUND OF HONG KONG (02800), Tencent (00700), and Hua Hong Grace Semiconductor (01347). Active stocks in the Shanghai-Hong Kong Stock Connect included KNOWLEDGE ATLAS (02513), which saw a net inflow of 2.843 billion Hong Kong dollars. KNOWLEDGE ATLAS completed a placement of approximately 31.4 billion Hong Kong dollars. Lyon released a research report stating that this placement significantly strengthened the company's financial position, supporting the expansion of reasoning services and annual recurring revenue growth. With scalable API business and profit margin improvement from reasoning engine upgrades, the company is expected to achieve breakeven in 2028, a year earlier than expected. GigaDevice Semiconductor Inc. (03986) saw a net inflow of 648 million Hong Kong dollars. GigaDevice Semiconductor Inc. announced revenue of approximately 11.5 billion yuan, a year-on-year increase of 177%; net profit attributable to shareholders of approximately 6.9 billion yuan, a staggering 1099% increase year-on-year; non-GAAP net profit of approximately 4.85 billion yuan, a 791% increase year-on-year. It is worth noting that GigaDevice Semiconductor Inc.'s H shares are set to have lock-up shares from cornerstone investors lifted on July 13. Data shows that a total of 18 shareholders will have their shares unlocked, totaling 14.3943 million shares. BABA-W (09988) saw a net inflow of 458 million Hong Kong dollars. U.S. startup PrismML announced that they have successfully compressed Alibaba's open-source Prophet model Qwen 3.6, which has 27 billion parameters, to run on iPhone 17 Pro. Sources familiar with the negotiations revealed that Apple has been in communication with PrismML on how to apply its technology. Some AI hardware stocks were sold off by Northbound investors, with KB LAMINATES (01888), Semiconductor Manufacturing International Corporation (00981), YOFC (06869), and Hua Hong Grace Semiconductor (01347) seeing net outflows of 270 million, 509 million, 708 million, and 840 million Hong Kong dollars respectively. Guolian An Fund stated that the recent overseas market sell-off was due to a loosening of trading in the AI hardware sector, with concerns over excessive speculation in the AI sector leading to a collective risk aversion and sell-off of funds. The first to adjust were the most popular stocks with significant profits in the semiconductor, AI computing power, and optical module sectors, with a clear profit-taking trend. Tencent (00700) saw a net outflow of 2.863 billion Hong Kong dollars. Reports indicated that Tencent is in talks to invest in Chinese AI startup Manus. Early investors in Manus, mostly participating in this transaction, will revamp their acquisition plan with Meta at the original valuation of 2 billion US dollars. Insiders added that Tencent is expected to acquire the largest stake in this round of transactions. TRACKER FUND OF HONG KONG (02800) saw a net outflow of 4.698 billion Hong Kong dollars. Guotai Haitong stated that this week, the Hong Kong stock market is entering a period of concentrated micro-liquidity shocks. With the gradual digestion of such short-term shocks and the increasing possibility of bottoming out of mid-term earnings reports in the Hong Kong stock market, the market is expected to return to a rational understanding of fundamental value-to-price ratios. Overall, as the shocks subside, the long-term investment value and cost-effectiveness of Hong Kong stocks are once again becoming apparent.