HK tech stocks slide 1.4% as A-share plunge spills into Hong Kong

The Hang Seng Tech Index slid 1.4% to 4,795 as a selloff in mainland China's technology stocks dragged down Hong Kong-listed AI and hardware names on futures settlement day.

"Intensifying competition in China's AI sector is putting pressure on valuations," said HSBC Research analysts, who cut Z.AI's target price to HKD 1,500 and cited expectations for an earlier turn to profit next year.

The Shenzhen Component Index and ChiNext Index, heavily weighted toward technology stocks, plunged 3.4% and 5.4%, respectively, while the STAR Composite Index fell 5.6%. The Shanghai Composite Index declined nearly 1% to 3,790. Hong Kong's benchmark Hang Seng Index was little changed, up 13 points at 25,821, with turnover of HKD 132.3 billion.

The selloff erased more than HKD 4.3 billion from Z.AI's market value in a single session, while the debut of optical module maker ZJ INNOLIGHT below its IPO price reflects waning appetite for new listings in the region's tech sector.

Z.AI (02513.HK) opened 1.45% higher before reversing course and nosediving as much as 17.7% to HKD 850, its lowest level in more than two and a half months. The stock last traded at HKD 870, down 15.78%, with turnover of HKD 4.34 billion and short selling accounting for 5.63% of volume. MINIMAX-W (00100.HK) reversed lower after opening up 0.1% and last reported at HKD 203.8, down 4.23%, with short selling at 9.7% of turnover. Big data service provider XUNCE (03317.HK) fell 5.92% to HKD 97.75.

AI-related hardware stocks faced heavy selling across the board. MONTAGE TECH (06809.HK) fell 5.79% to HKD 254, ILUVATAR COREX (09903.HK) dropped 8.87% to HKD 402.8, and LUXSHARE ICT (02475.HK) declined 6.09% to HKD 55.55. LENS (06613.HK) fell 6.22% to HKD 19.9, while YOFC (06869.HK) dropped 10.02% to HKD 92.5 with turnover of HKD 1.82 billion. GIGADEVICE (03986.HK) fell 3.53% to HKD 421.2 after the company disclosed Chairman Zhu Yiming had reduced his A-share holdings, cashing out a cumulative RMB 4.4 billion, while planning to increase his A-share holdings by at least RMB 1 billion starting from mid-December.

ZJ INNOLIGHT (03308.HK), the optical module giant listed in Hong Kong today, traded at HKD 904.5, 7.7% below its listing price of HKD 980, with turnover of HKD 6.4 billion. The weak debut adds to a growing list of Hong Kong IPOs that have struggled to hold their offer prices during the broader tech downturn.

The divergence between the flat HSI and the sharp decline in tech-heavy indices highlights the two-speed nature of Hong Kong's market, where traditional sectors held steady while technology names bore the brunt of the A-share contagion. Investors will watch for further analyst rating changes and the performance of upcoming tech listings as sentiment indicators for the sector.

This article is for informational purposes only and does not constitute investment advice.