Hong Kong's Tech Rally Resumed Amid Return of Foreign Buyers, Mixue Group's IPO Attracts Huge Retail Demand

Li Chen
26 Feb, 2025
Hong Kong

Benchmark indexes in Hong Kong sharply rebounded amid an inflow of foreign funds and optimism about Beijing's policy support. 

The Hang Seng index soared more than 3% and erased 2% losses in the previous two sessions, as investors searched for bargains in tech stocks. 

Hong Kong's tech index has jumped more than 18% from the low in January after the success of Deep Seek raised hopes that more Chinese companies could afford to accelerate the use of artificial intelligence technology. 

The DeepSeek's affordable technology got worldwide attention, and investors bid up Internet platform operators as companies ramped up the application of AI-enabled tools to deliver better and expanded services. 

The Hang Seng index has led the developed world markets in 2025 with gains of 21.2%, but the mainland-focused CSI 300 index has lagged with a rise of 3%. 

Foreign investors have been increasing their allocation to stocks in Hong Kong and Europe and shifting their interest away from India and the U.S. amid attractive valuations. 

Hong Kong tech stocks are trading at significant discounts to their European and Japanese peers, but that low valuation also reflected weak earnings growth outlook, China's arbitrary policy-making, and slowing economic growth in the world's second-largest economy.

 

China Indexes and Stocks

The Hang Seng index increased 3.1% to 23,757.74, and the mainland-focused China index advanced 0.5% to 3,945.41.

Alibaba Group Holding increased 5.4% to HK $137.60, Tencent Holdings jumped 3.3% to HK $501.50, and JD.com soared 9% to HK $168.20. 

Mixue launched its book-building process on February 21, and retail subscription attracted more than HK $1.6 trillion. 

Mixue plans to sell 17.1 million shares at HK $202.50 per share, and about 10% of the offering is reserved for retail investors. 

So far, the retail tranche is oversubscribed more than 1,000 times, surpassing the level of interest during the initial public offering of Ant Group in 2020.

The minimum retail investment requirement is HK$20,454.22 for a lot of 100 shares.

The stock is expected to begin trading on March 3.