The Hang Seng Tech Index, whose biggest members include Tencent Holdings, Alibaba Group Holding and Xiaomi, approached a four-month high on Thursday, after rallying more than 10 per cent over the past two weeks, while the broader Hang Seng Index climbed about 6 per cent.
Alibaba, the owner of the Post, advanced twice as much over the same period, after its cloud-computing unit said it integrated DeepSeek’s AI model into its services, while smartphone maker Xiaomi’s value surpassed HK$1 trillion (US$128.4 billion). Investors loaded up on data service provider Merit Interactive in Shenzhen, fuelling a 20 per cent daily-limit surge since China’s onshore markets reopened on Wednesday after the Lunar New Year holiday.
The rebound may signal a change in sentiment in the tech sector, which has suffered from weak spending and a crackdown on fintech practices over the past four years. This week’s run-up in Chinese tech stocks may have more legs because of their valuation appeal and innovation despite various US curbs, some money managers said.
“Chinese equities, and especially technology companies, are priced at a steep discount compared to their American counterparts,” said David Chao, a strategist at US money manager Invesco. “Similar to the AI development gap narrowing, so too is the [stock] valuation gap.”
The 30 members of the Hang Seng Tech Index had an average price-to-earnings ratio of 20.5 times, according to Bloomberg data. The seven US giants of Nvidia, Apple, Amazon.com, Alphabet, Microsoft, Meta Platforms and Tesla traded at 41.4 times on average.
