Quick Take Hong Kong's Hang Seng Index surged 2.2% Monday in its biggest gain since mid-August, led by a monster 19% jump in Alibaba after stellar earnings results.
The Breakdown Alibaba delivered the fireworks, posting a 78% profit surge for the quarter ending June thanks to investment gains and asset disposals. The e-commerce giant's best single-day performance since March 2022 helped lift the entire Hang Seng Index to 25,617 points. Other winners included BOC Hong Kong (up 6.7%) and Alibaba Health (up 7%).
Meanwhile, mainland Chinese markets continued their steady climb, with the CSI 300 adding 0.6%. China's stock market regulator Wu Qing endorsed the rally last week, saying the "stabilisation and uptrend" needs to be "further entrenched" – regulatory speak for "we like what we see."
Investor Lens This looks like a classic catch-up trade. While mainland stocks hit decade highs in August (Shanghai Composite up 8%, CSI 300 up 10%), Hong Kong's benchmark managed just 1.2%. The valuation gap tells the story: Hong Kong trades at 11.8x earnings versus Shanghai's 18.2x multiple.
That discount is starting to look tasty to investors hunting for relatively cheaper exposure to Chinese growth, especially with Alibaba's AI and food delivery prospects brightening.
Context Check Hong Kong's market has been the unloved stepchild of the China recovery story, overshadowed by yuan-denominated mainland stocks. But with Beijing's regulatory stance turning supportive and a "liquidity friendly environment" taking hold, the city's market may finally be finding its footing.
This shift matters beyond Hong Kong – it signals growing confidence in China's tech giants and suggests international investors are warming up to Chinese assets again after years of skepticism.
Source: South China Morning Post
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