Northbound funds | The northbound capital net bought 3.667 billion. Tencent (00700) capital expenditure exceeded expectations. The northbound investors seized the opportunity to buy Tencent shares, exceeding 5.6 billion Hong Kong dollars.

On August 13, the Hong Kong stock market saw northbound capital with a net purchase of HKD 3.667 billion. Among this, the northbound trading via Stock Connect (Shanghai) had a net purchase of HKD 3.771 billion, while Stock Connect (Shenzhen) had a net sell of HKD 104 million. The stocks with the highest net purchases from northbound capital were Tencent (00700), Semiconductor Manufacturing International Corporation (00981), and Hua Hong Grace Semiconductor (01347). The stock with the highest net sell was Cig Shanghai (06166). Active stocks in Stock Connect (Shanghai) Active stocks in Stock Connect (Shenzhen) Tencent (00700) dropped 4% after earnings, receiving a net purchase of HKD 5.616 billion throughout the day. Tencent reported second-quarter capital expenditures of HKD 52.8 billion, far exceeding market expectations. Credit Lyonnais stated that Tencent's Q2 performance met expectations and anticipates the company's capital expenditures could reach RMB 200 billion this year, leading to a 2% and 6% reduction in adjusted net profit forecasts for 2026 and 2027, respectively. However, the upcoming expansion of Xiaowei's trial use and the expected release of Hongyuan 4 later this year are believed to further drive the company's valuation reassessment. Semiconductor Manufacturing International Corporation (00981) and Hua Hong Grace Semiconductor (01347) saw net purchases of HKD 834 million and HKD 822 million, respectively. Both companies announced their results after the market closed. Semiconductor Manufacturing International Corporation reported Q2 revenue exceeding USD 3 billion, with a gross margin rising to 25.3%, showing overall improvement in profitability. Management expects that revenue and gross margin will further increase in Q3. Hua Hong Grace Semiconductor recorded Q2 sales revenue of USD 717.5 million, a new historical high, marking a year-on-year increase of 26.8% and a quarter-on-quarter increase of 8.6%; the gross margin was 16.5%, up 5.6 percentage points year-on-year and 3.5 percentage points quarter-on-quarter. KB LAMINATES (01888) had a net purchase of HKD 346 million. Bank of America Securities published a research report stating that KB LAMINATES' vertical integration capabilities significantly enhance its sensitivity to profitability amidst upstream material shortages and price increases. It is expected that the average selling price of CCL for KB LAMINATES will expand by 130% this year and 40% in the first half of next year. According to their analysis, if the average selling price of CCL were to increase by 100%, it would boost the company's CCL gross margin by 28 percentage points this year, leading to a 200% growth in earnings per share. MINIMAX-W (00100) received a net purchase of HKD 337 million. The HKEX recently announced that MINIMAX has met the criteria for fast-track inclusion in the HKEX Technology 100 Index and will be included in both the HKEX Technology 100 Index and HKEX Technology and US Technology 100 Index after market close on August 12, effective from August 13. Notably, MINIMAX was included in Stock Connect on August 6. YOFC (06869) saw a net purchase of HKD 163 million. Daiwa noted that Yangtze Optical Fibre And Cable Joint Stock is benefiting from the current strong upward cycle in the optical fiber industry, expecting the company's technical leadership and growth potential in the optical interconnect business will support this. The optical interconnect businesss gross profit compound annual growth rate is forecasted to be 137%, driving a 135% compound annual growth rate for net profit from 2025 to 2028. Additionally, BABA-W (09988) and GigaDevice Semiconductor Inc. (03986) had net purchases of HKD 189 million and HKD 139 million, respectively, while Cig Shanghai (06166) experienced a net sell of HKD 47.84 million.