The Hong Kong Red Chip Index hit a seven-year high, with the sector welcoming the reassurance of certainty in valuation repair.

Since 2026, the Hang Seng Red Chip Index has been strengthening against the trend. As of the close of May 14, the year-to-date increase was close to 13%. This week, it even broke through 4669 points, reaching a new high in over 7 years, significantly outperforming the major indices of the Hong Kong stock market. The long inactive red chip sector has recently surged, driven by the valuation repair of state-owned large red chip assets with certainty. However, the number of Hong Kong IPOs of private small red chip companies has sharply declined in the past two years, with only MiniMax and Qunhe Technology listing this year. On the other hand, as the A-share return channel remains open, the Hong Kong red chip sector is entering a new cycle.