Watch this video to learn more about Global X Hang Seng TECH ETF (2837)
China's economy has undergone a significant transformation in recent years, evolving from a factory-driven model to a leading force in the tech industry. China's rising internet penetration rate has enabled it to become a global leader in mobile payments and e-commerce, while the COVID-19 pandemic has accelerated the pace of business digitization and led to tremendous growth in China's cloud companies.
Additionally, advanced battery technology, competitive pricing, and generous government policies have helped a handful of homegrown Chinese electric vehicle companies emerge as top sellers worldwide. With increasing numbers of unicorns seeking to list in Hong Kong, and Chinese companies representing three of the top five most valuable unicorns, the Hang Seng TECH Index is an ideal option for those looking to capture growth opportunities in the region.
China’s internet sector represents the largest weight of the Hang Seng TECH Index at nearly 55%. 1,2 With the regulation releases, the overall environment for the internet sector becomes more positive. This sets the stage for a gradual recovery in revenue and earnings growth for relevant companies. Additionally, as China relaxes its COVID-19 control measures, the 3-year impact on consumer spending and the macro economy is at a turning point, presenting a promising growth prospects for the internet sector in FY23.
While online platforms may revert to a cash-intensive approach to attract new users or increase consumer spending, we anticipate a more cautious attitude towards expenditures. Instead of exorbitant spending on sales and marketing efforts, internet businesses are likely to prioritize sustainable growth by enhancing efficiency and implementing cost-control measures.
Consequently, the industry should experience improvements in both company fundamentals and valuation multiples. For instance, the risk of ADR de-listing has significantly diminished due to the US PCAOB's favorable audit inspection results for ADRs, eliminating immediate de-listing threats for US-listed Chinese internet companies.
Since 2021, Chinese internet firms have augmented share buybacks and dividend distributions to boost shareholder returns. Nevertheless, compared to their US counterparts, China's internet sector continues to trade at a roughly 20% discount (as of 9 January 2023, based on Bloomberg data) even after experiencing a marked upswing since mid-November. This suggests potential for further valuation multiple recuperation, accompanied by a resurgence in earnings growth.
Stock Code | 2837 (HKD)# |
Underlying Index** | Hang Seng TECH Index |
Total Net Asset Value* (As of ) | HKD $ |
Ongoing Charges Over A Year | 0.45% |
Inception Date | 29 Mar 2023 |
# Investment involves risk. Before making any investment decision to invest in the Fund, investors should read the Fund’s Prospectus for details and the risk factors. Visit Global X ETFs Hong Kong website for more details relating to this Fund (including but not limited to the Fund’s iNAV, market price, performance, daily holdings and tracking difference / error).
* Source: Mirae Asset Global Investments (Hong Kong) Limited.
**The Underlying Index is a net total return, modified free float-adjusted market capitalization weighted index. A net total return index reflects the reinvestment of dividends or coupon payments, after deduction of any withholding tax (including any surcharges for special levies, if applicable).
Global X Hang Seng TECH ETF enables investors to access high potential growth through 30 largest technology or innovative companies listed on the Hong Kong Stock Exchange with total market capitalisation of approximately HKD 9.8 trillion^.
^Hang Seng Indexes, as of 28 Mar 2023.
Convenient, cost-effective access to businesses highly related to selected technology themes: Cloud, Digital, E-Commerce, FinTech, Internet, or autonomous activities.
In a single trade, the fund delivers access to dozens of companies with high exposure to the Hang Seng TECH Index constituents at a charge up to 0.45%.