It's the beginning of the year again—does Hong Kong's AI sector still hold promise?

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Guolian Minsheng Securities posed a thought-provoking question in its latest strategy report: Is history repeating itself in the Hong Kong stock market? Looking back at early 2025, the Hong Kong market broke out on heavy volume, driven by the dual forces of “spring fever” and the “Deepseek moment.” Standing at the start of 2026, the market seems to sense an extremely similar atmosphere.

Guolian Minsheng Securities stated in its January 19 report that the current Hong Kong stock environment is an astonishing “mirror” of last year: investors still face a weak denominator (overseas liquidity), but the numerator (AI application layer) is brewing for a dramatic explosion.

For investors, this means that simply relying on a “beta market” driven by US Federal Reserve rate cuts may offer limited room; true excess returns will come from precise bets on the “revaluation of China’s AI value.” The iteration process of global large models and the speed at which applications land will be key factors determining success or failure in Hong Kong stock investing in 2026.

“Mirror” market under liquidity tightening: History is rhyming

Guolian Minsheng Securities’ review shows the Hong Kong stock market is at a delicate juncture at the beginning of 2026. Looking back at 2025, the bull run in Hong Kong stocks started after January, when market expectations for Fed rate cuts saw ample room but insufficient urgency, limiting liquidity on the denominator side. However, the Deepseek hype during Spring Festival fully ignited the domestic AI market, not only boosting risk appetite but also driving the Hang Seng Internet sector to surge rapidly in February and March.

Guolian Minsheng Securities points out that the current environment closely mirrors that time. Recently announced US inflation data was below expectations but still hasn’t reached the level that would trigger an immediate Fed policy shift. This suggests limited expectations for improvement in the Hong Kong stock market’s denominator-side liquidity. However, the catalyst for the numerator side is in place. Guolian Minsheng Securities stresses that catalysis of big models at the AI application layer is being continuously brewed, highly comparable to the situation early last year. Investors should focus on structural opportunities brought by model iteration.

China AI revaluation: The certainty premium in 2026

Looking ahead to 2026, Guolian Minsheng Securities is firmly optimistic about the revaluation of China’s AI value. This sentiment is not only emotional but also based on solid industrial catalysts. Domestically, DeepSeek V4 is expected to be released during the February Spring Festival, directly replicating last year’s “Spring Festival offensive.” At the same time, domestic tech giants’ capital expenditure is expected to continue rising in 2026, laying a solid computing power foundation for model capabilities.

Overseas, Guolian Minsheng Securities forecasts a dense release period for models in the first half of 2026. Google, Meta, and xAI are all expected to release next-generation large models and multi-modal video models in Q1 and Q2. In this context of global resonance, hardware infrastructure stands to benefit first. Guolian Minsheng Securities believes that the vigorous development of large models domestically and abroad will give AI hardware companies a “certainty premium,” and suggests attention to mature process foundries benefiting from outsourcing price hikes such as SMIC and Hua Hong, as well as leading memory chip company GigaDevice and domestic GPU leader firms.

Breakthrough at the application layer: A qualitative leap from “chatting” to “getting things done”

Guolian Minsheng Securities believes that the improvement in model capabilities is raising the ceiling of the application layer, and 2026 will be a key year for multi-dimensional application deployment. The highlight lies in platform-based Internet companies with “Chinese characteristics.” Guolian Minsheng Securities specifically mentioned Alibaba’s AI assistant “Qianwen app.” Within two months of launch, its C-end monthly active users (MAU) quickly surpassed 100 million; on January 15, more than 400 task-handling features were launched, marking Alibaba’s AI strategy’s accelerated penetration from the “model layer” to the “application layer,” leading the industry from simple “chat dialogue” into the age of “AI task-handling.”

Additionally, Kuaishou’s Kelin app has performed better than expected in overseas markets, with its motion control feature receiving enthusiastic feedback on overseas social media.

Smart driving: The largest AI scenario to scale up in 2026

Among all AI applications, Guolian Minsheng Securities defines smart driving/autonomous driving as the largest AI application direction already launched and speeding up development in 2026. This judgement is based on several important industry trends: Overseas, Tesla’s FSD combined with Grok has enhanced the smart driving experience, and on January 13, the US House of Representatives lifted the restriction of 2,500 vehicles for Robotaxi companies, indicating the large-scale operation of Robotaxi is about to begin.

Domestically, the expansion by OEMs and Robotaxi companies has also exceeded expectations. Based on this, Guolian Minsheng Securities suggests investors pay attention to OEMs committed to full-stack in-house R&D of smart driving.

Capital flows & market data: Giants favored, valuations rising

Capital flows in the market corroborate the above logic. According to Guolian Minsheng Securities’ statistics for this week’s southbound capital inflow through HK Stock Connect, Tencent Holdings ranked first with a net purchase of 7.729 billion yuan, followed by Kuaishou-W and Xiaomi Group-W with 3.412 billion and 3.275 billion yuan, respectively, indicating strong preference for leading tech platforms.

In terms of valuation, as of January 16, 2026, the Hang Seng Index PE has rebounded to 11.7 times, up 1.66% from last week, while the AH Premium Index fell to 129.11. In stock performance, Alibaba-W surged 13.45% this week, SMIC rose 6.45%, validating institutional optimism about platform companies and hardware infrastructure. Guolian Minsheng Securities remains bullish on the China AI revaluation trend.

Risk warning and disclaimerThe market has risks, and investment needs caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific situation. Investment decisions made accordingly are at their own risk.

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