Analysis of Net Buying of Tencent Holdings by Southbound Capital: AI Mini-Program Ecosystem Drives Sentiment Shift in Hong Kong-listed Internet Stocks

Now I present to you the complete professional analysis report.

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Since the start of 2026, Southbound Capital has shown a significant accelerated inflow trend. On the first trading day after the resumption of the Stock Connect business following the New Year holiday (January 5), Southbound Capital recorded a full-day net inflow of approximately

, hitting a new daily inflow high in nearly two and a half months [1]. In the first three trading days of 2026, cumulative net purchases reached , with Hong Kong stock turnover amounting to approximately HK$143.605 billion. The transaction share of Stock Connect rebounded to over 50%, reaching 50.67%, indicating a substantial recovery in Hong Kong stock liquidity [1][2].

[2]. This expectation is based on the following core logics: the current AH share premium remains as high as 37%, highlighting the valuation cost-effectiveness advantage of Hong Kong stocks; domestic interest rates continue to decline, increasing demand for asset allocation; policies encourage long-term capital to enter the market, and domestic capital’s pricing power over Hong Kong stocks continues to rise.

As a core AI asset in Hong Kong stocks, the scale of the Hong Kong-listed Internet ETF (513770) has continued to climb. As of January 8, the fund’s scale reached

, renewing the historical high [3]. Notably, even on the day of a short-term correction in Hong Kong stocks (the intraday price of the Hong Kong-listed Internet ETF fell 2.54% on January 7), it still recorded a net inflow of amid the decline, with consecutive net inflows exceeding in the past 3 days [3][4]. The “buy more on dips” behavior of capital indicates that institutional investors have reached a consensus on the long-term allocation value of the Hong Kong-listed Internet sector.

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, and the most direct catalyst behind this is the official launch of WeChat’s on January 5, 2026 [5][6]. The initiative provides all-round support covering the entire link of development, operation, and monetization:

Support Category	Specific Details
Cloud Development Resources	New developers can create a personal cloud development environment for free for 6 months; existing developers can receive large-value discount coupons
AI Computing Power Support	Provide a total of 100 million tokens of Tencent Hunyuan Text-to-Text Model Hunyuan 2.0 quota, plus 10,000 quotas for the Text-to-Image Model
Data Analysis Capabilities	Free access to the professional version of We Analytics for one year to support precise operation
Traffic Incentives	Official accounts publishing content with topics have the opportunity to gain public domain traffic; exclusive exposure entry for mini-programs
Commercial Monetization	Open virtual payment and membership subscription capabilities across all terminals; ad monetization supports the “no-code smart access mode”

The incentive period of this initiative covers the entire year of 2026, and all online applications are eligible to participate, including online tools, AI-native, and entertainment mini-programs [5][6].

This move by Tencent has far-reaching strategic significance. Chen Xiaohua, Executive Dean of the China Mobile Communications Association Institute of Education and Science, pointed out:

[7].

Currently, a number of benchmark AI-native applications have emerged within the mini-program ecosystem:

• Guess Salt
  : Gamifies information using large models to achieve spontaneous word-of-mouth spread among users
• Add Frame to Uploaded Image
  : Uses AI image generation capabilities to add frames and beautify artworks
• Style Converter
  : Became a popular content source on social platforms with its AI painting function
• Dubbing Tool, Writing Goose, Essay Talk
  : Penetrate vertical scenarios such as video creation, education, and text work

Ma Jihua, a senior telecommunications industry analyst, commented:

[7].

, bullish on its AI development prospects in enterprise and user applications [4]. According to Bloomberg’s consensus forecast, the predicted EPS growth rate of the Hang Seng Tech Index in 2026 is as high as , and this significant growth is mainly due to the fundamental reshaping of Tencent’s core business efficiency by AI technology [2].

Tencent’s stock price performance also confirms market confidence. From August 2024 to January 2026, Tencent Holdings’ stock price rose from HK$378 to HK$611, with a

. The current trading price is slightly below the 20-day moving average (HK$609.52) and 50-day moving average (HK$620.31), but still significantly higher than the 200-day moving average (HK$566.49), showing a typical high-level consolidation pattern [0].

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From the perspective of Southbound Capital flow, there is obvious differentiation within the internet technology sector:

Stock Code	Stock Name	Southbound Capital Flow	Core Logic
0700.HK	Tencent Holdings	Net Buy of HK$1.412 billion	AI mini-program ecosystem upgrade, Hunyuan Large Model implementation
1810.HK	Xiaomi Group-W	Net Buy of HK$3.148 billion	Hardware AI upgrade, “Human-Vehicle-Home” full ecosystem strategy
1024.HK	Kuaishou-W	Continued Increase in Holdings	Kailing AI’s overseas popularity, 102% surge in mobile terminal revenue
9988.HK	Alibaba Group-W	Net Sell	Facing competitive pressure, waiting for AI cloud service realization
3690.HK	Meituan-W	Net Sell, Price Dropped Over 3%	Short-term performance impacted by food delivery subsidy war
0941.HK	China Mobile	Net Sell	Valuation pressure on traditional telecommunications business

CITIC Securities pointed out:

, but investors pay more attention to model iteration, application implementation, and narrative reinforcement brought by performance realization [4]. With WeChat ecosystem’s 1.2 billion user base and mature mini-program distribution channels, Tencent’s AI applications can achieve rapid implementation and large-scale promotion; Kuaishou’s Kailing AI saw a 102% surge in daily mobile terminal revenue compared to December 2025, with a warm response in overseas markets [4].

Industrial Securities stated:

[4]. JPMorgan Chase described Kuaishou as , bullish on its “double growth” driven by Kailing AI’s overseas popularity plus ad AI empowerment [4]. In contrast, Alibaba and Meituan face more complex competitive landscapes, and the efficiency improvement of their core businesses brought by AI has not yet been fully reflected in their financial statements.

Market capital has begun to favor more certain allocation strategies. GF Securities pointed out:

[2]. Against this backdrop, the “Technology + Dividend” barbell strategy, which features high elasticity and high dividends, has attracted attention. The Hong Kong Top 30 ETF (520560) has heavy holdings in tech stocks such as Tencent and Alibaba, while also allocating to high-dividend targets like China Construction Bank and Ping An of China [2][4].

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In 2025, the annual purchase amount of Hong Kong stocks by Southbound Capital hit a new record high, exceeding

[2]. The accelerated inflow trend at the start of 2026 indicates that mainland investors’ confidence in the Hong Kong stock market continues to strengthen. The deep binding of Southbound Capital and Stock Connect has gradually enabled Hong Kong stocks to break free from excessive suppression under the offshore perspective of foreign capital, and their valuation logic is more in line with domestic industrial trends and capital preferences.

The biggest difference between Hong Kong-listed tech stocks in 2026 and previous years is:

[1]. With the launch of the AI industry’s profit realization cycle, internet leaders such as Tencent and Alibaba have ushered in a new engine for profit growth, which provides solid performance support for valuation.

In December 2025, the monthly share unlock scale of Hong Kong stocks reached approximately HK$126 billion, suppressing market liquidity and becoming an important factor for the accelerated adjustment of Hong Kong stocks since mid-November [1]. The share unlock scale in January 2026 is expected to drop below HK$50 billion, and the capital pressure facing the market is expected to be significantly eased.

After this round of adjustment, the valuation of the Hong Kong-listed tech sector has gradually approached the low ranges seen since 2024,

[1]. The 37% AH share premium means that Hong Kong stocks have an obvious valuation depression compared to A-shares.

Although the AI strategies of leading enterprises such as Tencent are clear, it still takes time to verify the process from technology R&D to large-scale commercial monetization. If the user growth and monetization efficiency of AI applications fall short of expectations, it may affect market confidence.

The uncertainty of the Federal Reserve’s interest rate cut pace may still have an impact on Hong Kong stock liquidity. Although the market generally expects the Federal Reserve to enter an interest rate cut cycle in 2026, short-term fluctuations in policy expectations may still trigger capital outflows.

The emergence of new-form products such as AI phones may impact the existing internet ecosystem. Ma Jihua pointed out:

[7]. For Tencent, how to combine AI capabilities with existing advantages such as mini-programs and official accounts to avoid being replaced by external forces is a proposition that requires continuous attention.

Institution	Core View	Investment Recommendation
Citigroup	Tencent Holdings and Alibaba Group-W are preferred as core AI concept stocks	Pay attention to AI application implementation progress
JPMorgan Chase	Kuaishou is “one of the cheapest AI stocks in the world”	Bullish on Kailing AI + ad AI double growth
CITIC Securities	AI remains the core catalyst for valuation upward movement	Focus on model iteration and performance realization
Industrial Securities	Internet leaders are expected to see a resonance of long positions from domestic and foreign capital	Upgrade long-term profit growth expectations
GF Securities	Hong Kong stocks will shift from liquidity-driven to co-driven by profits and liquidity	Focus on consumption recovery and AI commercialization

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, mainly due to the following reasons:

1. Strategic Level
   : The launch of WeChat’s “AI Mini-Program Growth Initiative” marks the accelerated transformation of Tencent’s AI strategy from technology R&D to large-scale application implementation. The 100 million-token Hunyuan Large Model quota provides strong incentives for developers
2. Ecosystem Level
   : The mini-program ecosystem has become an important position for AI application verification and promotion. The social distribution path of 1.2 billion users enables AI applications to achieve rapid breakout
3. Performance Level
   : The reshaping of core business efficiency by AI technology is emerging. The 34% expected EPS growth of the Hang Seng Tech Index in 2026 provides performance support for valuation
4. Institutional Level
   : International investment banks such as Citigroup list Tencent as a preferred AI concept stock, and analysts are uniformly bullish on its AI development prospects

, mainly reflected in:

1. Continuous large-scale inflow of Southbound Capital, with accelerated buying at the start of 2026
2. AI has shifted from conceptual narrative to financial realization, with the profit realization cycle launched
3. Hong Kong-listed Internet ETFs hit a new record high in scale, with strong capital allocation enthusiasm
4. Institutional views have shifted from “liquidity-driven” to “co-driven by profits and liquidity”

Looking ahead to 2026, the investment logic of the Hong Kong-listed Internet sector has shifted from large-scale valuation recovery in 2024 to a phase of substantive industrial upgrading. The combination of

gives Hong Kong stocks the characteristics of “not falling too deeply and having a bottom for growth”.

:

• Software-Oriented
  : The Hong Kong-listed Internet ETF (513770) covers core targets such as Tencent, Alibaba, Meituan, and Xiaomi, and can fully enjoy the dividends of the AI application ecosystem
• Hardware-Oriented
  : The Hong Kong-listed Information Technology ETF (159131) focuses on core computing power targets such as SMIC and Hua Hong Semiconductor, forming an industrial chain complement with the Internet ETF
• Steady Allocation-Oriented
  : “Technology + Dividend” barbell strategy products such as the Hong Kong Top 30 ETF (520560) balance high elasticity and high dividends

: Market volatility may be relatively high in the near term, and short-term price fluctuations do not predict future performance. Investors are advised to invest rationally based on their own capital status and risk tolerance, and pay attention to position and risk management.

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:

• Top Left
  : Daily net buying trend of Southbound Capital, with the single-day inflow of HK$18.723 billion on January 5 hitting a new high in nearly two and a half months
• Top Right
  : Comparison of net buying of major internet leaders by Southbound Capital, with Xiaomi (HK$3.148 billion) and Tencent (HK$1.412 billion) ranking top
• Bottom Left
  : The scale of Hong Kong-listed Internet ETFs continues to climb, rising from RMB13 billion to RMB13.3 billion to hit a new record high
• Bottom Right
  : Driving factors for investment sentiment in the Hong Kong-listed Internet sector, with four factors resonating: AI profit realization, valuation depression, liquidity improvement, and industrial upgrading

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[1] Sina Finance - “Southbound Capital Returns to the "Scramble for Shares" Mode! Net Inflow of HK$18.7 Billion on January 5” (https://finance.sina.com.cn/jjxw/2026-01-06/doc-inhfiqwu6077759.shtml)

[2] Sina Finance - “Latest Announcement from Alibaba! Co-driven by Profits and Liquidity, Hong Kong-listed Internet ETFs Absorb Over RMB500 Million Consecutively” (https://finance.sina.com.cn/money/fund/etf/2026-01-08/doc-inhfqyhi5238945.shtml)

[3] HSTong - “Absolute No.1 in the Market, Latest Announcement from Alibaba! Co-driven by Profits and Liquidity” (https://www.hstong.com/news/detail/26010819374961449)

[4] Sina Finance - “Southbound Capital Heavily Increases Holdings in Tencent and Xiaomi! Hong Kong-listed Internet ETFs Absorb Another RMB270 Million” (https://finance.sina.com.cn/money/fund/etf/2026-01-08/doc-inhfqcax6804015.shtml)

[5] InfoQ - “100 Million Hunyuan Tokens! Tencent Launches the Heavyweight AI Mini-Program Growth Initiative” (https://www.infoq.cn/article/ylOYgIWfCZ6LOuAd6XwN)

[6] Tencent News - “Joining Hands with Developers to Launch the First Year of AI Mini-Programs” (https://news.qq.com/rain/a/20260105A04LDB00)

[7] Sohu - “Regarding AI Applications! Tencent Announces a Major Move” (https://m.sohu.com/a/973540232_121118712)

[8] Zhihu Column - “2026 Hong Kong Stock New Cycle: Resonance of Three Forces, AI Main Line Welcomes Profit Realization” (https://zhuanlan.zhihu.com/p/1992305946140095951)

[9] East Money Caifuhao - “First Stop for AI Investment in 2026: How to Seize the Opportunity?” (https://caifuhao.eastmoney.com/news/20260106111837819555360)