HKEX Launches AI Index, Redefining Hong Kong’s Tech Benchmark Landscape

HKEX Launches AI Index, Redefining Hong Kong’s Tech Benchmark Landscape

TREE NEWS reports: Hong Kong Exchanges and Clearing (HKEX) has launched its own artificial intelligence index, selecting 40 Hong Kong-listed companies across the AI value chain, from chip design and infrastructure to large language models and applications. The index includes giants like Alibaba, Baidu, and Tencent, alongside newly listed AI firms such as Zhipu and MiniMax. The move marks a significant expansion of HKEX’s self-compiled index business and challenges the long-standing dominance of Hang Seng Indexes in benchmarking Hong Kong equities.

What Happened

The AI index, announced in late October, covers four themes: AI chips, AI infrastructure, AI models, and AI applications. To qualify, companies must derive at least 30% of revenue from AI-related activities, meet liquidity thresholds (average daily turnover of at least HK$20 million over six months), and satisfy other listing and ownership concentration requirements. The index uses a fundamental-adjusted free-float market cap weighting, with individual weight caps of 10% for AI chip, infrastructure, and model companies, and 3% for AI application companies. Notably, profitability is not part of the fundamental scoring; instead, HKEX emphasizes R&D spending as a percentage of revenue, capex as a percentage of revenue, and revenue growth, with revenue growth given double the weight of the other two metrics.

As of October 22, the top three constituents were SMIC (9.8%), Hua Hong Semiconductor (8.26%), and Lenovo (6.76%). Alibaba, Tencent, and Baidu held weights of 3.81%, 3.74%, and 3.52%, respectively. The index will be rebalanced quarterly.

Market Implications

The launch has several implications for investors. First, it provides a new benchmark for Chinese AI assets, potentially attracting global capital seeking exposure to China’s AI sector. HKEX has already signed a licensing agreement with Southern Asset Management to launch an ETF tracking the index in mainland China, which could channel significant retail and institutional flows into these stocks.

Second, the index’s methodology reflects the unique characteristics of AI companies: high growth, heavy investment, and often negative earnings. By excluding profitability, HKEX accommodates early-stage AI firms that may be loss-making but are investing heavily in R&D and expansion. This could make the index more representative of the AI ecosystem than traditional profitability-focused benchmarks.

Third, the differentiated weight caps favor core technology segments (chips, infrastructure, models) over applications, signaling a focus on the foundational layers of AI. This may lead to higher valuations for semiconductor and infrastructure plays relative to application-layer companies.

Fourth, the index intensifies competition with Hang Seng Indexes, which launched its own AI-themed index in 2023. The two indices have different methodologies—Hang Seng’s index uses a 12% single-stock cap and includes revenue growth as a screening criterion, while HKEX’s uses a more nuanced fundamental score. This gives investors alternative lenses to view the sector.

For the broader market, the index could boost liquidity and visibility for smaller AI names, as inclusion may drive passive fund inflows. It also reinforces Hong Kong’s role as a fundraising hub for Chinese AI companies; according to HKEX data, AI value chain companies raised HK$97.9 billion in IPOs between December 2025 and May 2026, accounting for 55% of total IPO proceeds in that period.

Key Takeaways

• New benchmark for Chinese AI: The HKEX AI Index offers a dedicated gauge for the sector, potentially attracting global capital and supporting valuation multiples for constituent stocks.
• Methodology favors growth over profitability: The exclusion of profitability metrics and emphasis on R&D, capex, and revenue growth aligns with the investment phase of many AI companies, but may also increase volatility.
• Weight caps favor core tech: Chips, infrastructure, and models receive higher individual caps (10%) versus applications (3%), which could skew index performance toward hardware and infrastructure names.
• Competition with Hang Seng Indexes: The launch challenges the incumbent’s dominance and provides investors with alternative AI benchmarks, potentially leading to product proliferation and lower fees.
• ETF pipeline: The planned mainland ETF with Southern Asset Management could drive incremental demand for constituent stocks, enhancing liquidity and price discovery.