Korean Capital Floods Into Hong Kong Stocks as AI Hard-Tech Assets Draw Strong Demand

Korean Capital Accelerates Into Hong Kong, Hard-Tech Sector Becomes Hot Favorite

According to the latest data from Korea Securities Depository (KSD), Korean investors have been aggressively purchasing Hong Kong-listed assets since April, with investments concentrated in Chinese hard-tech sectors including semiconductors, AI computing hardware, and new energy. Against the backdrop of global capital reassessing the value of Chinese tech assets, Hong Kong's hard-tech sector is becoming a focal point for overseas funds.

Behind this trend lies the sustained demand pull from the global AI industry wave on upstream hardware, as well as China's notable progress in semiconductor self-sufficiency and AI computing infrastructure development, which has presented overseas investors with high-certainty growth opportunities.

AH Premium Index Falls to Nearly 8-Year Low

Driven by the continuous influx of foreign capital, the Hang Seng AH Premium Index has dropped to its lowest level in nearly eight years. The index reflects the premium of A-shares over H-shares, and its decline indicates that the price gap between H-shares and A-shares is narrowing rapidly.

More notably, some hard-tech industry leaders listed in both markets have even seen the rare phenomenon of H-share prices surpassing their A-share counterparts. This means that overseas investors' valuation recognition of these companies has exceeded that of the mainland market, fully reflecting international capital's repricing of Chinese hard-tech assets.

Industry professionals point out that foreign capital is the core force driving changes in the AH premium ratio. When foreign capital continues to flow into the Hong Kong market, H-share prices are pushed higher and the premium index declines accordingly. The current historic low of this indicator precisely demonstrates that foreign capital's enthusiasm for allocating to Hong Kong's hard-tech sector has reached a peak unseen in recent years.

AI Computing Demand Drives Reshaping of Hard-Tech Valuation Logic

Korean capital's preference for Chinese hard-tech assets is no coincidence. From an industry perspective, several core factors are at play:

First, the spillover effect of the global AI computing arms race. With the explosive growth in large language model training and inference demand, the market for AI computing hardware continues to expand. China possesses a cohort of globally competitive enterprises in AI chips, servers, optical modules, and other areas, whose growth potential is highly recognized by international capital.

Second, the acceleration of China's semiconductor self-sufficiency drive. Under the pressure of external technology restrictions, China's semiconductor supply chain is accelerating domestic substitution across design, manufacturing, and packaging and testing, with investable opportunities emerging at every stage.

Third, the valuation discount effect of Hong Kong stocks. Compared to the high valuations of U.S. tech stocks, Hong Kong's hard-tech sector remains at relatively low levels, offering superior cost-performance advantages that attract global capital allocation, including from South Korea.

Institutional Outlook: Hang Seng Tech Index Poised for Upside Opportunity

Looking ahead over the next two months, multiple institutions hold an optimistic view of Hong Kong's tech sector. Analysts believe the Hang Seng Tech Index is poised for an upside opportunity, primarily driven by the approaching earnings delivery period for the AI supply chain, incremental capital support from continued foreign inflows, and ongoing favorable Chinese technology policies.

Among subsectors, hard-tech areas such as semiconductors and hardware equipment are widely favored and expected to continue attracting capital. Against the backdrop of sustained global AI infrastructure expansion, Chinese hard-tech companies with core technological moats are being added to the "must-own assets" lists of an increasing number of international investors.

The massive influx of Korean capital may be just a microcosm of global capital repricing Chinese hard-tech assets. As more overseas funds join in, the valuation center of Hong Kong's hard-tech sector is expected to shift further upward.