The Hang Seng Tech Index has launched the biggest overhaul in its history.

The Hang Seng Tech Index is actively embracing hard technologies.

On the evening of August 10, Hang Seng Indexes Company published a consultation paper, stating that the composition of Hong Kong's technology sector continues to expand, and companies with rapid revenue growth often have relatively small market capitalization. To enhance the market representativeness of the Hang Seng Tech Index, the company is soliciting market opinions on the index revision plan.

The key points of this reform include: fully removing industry restrictions, revising the six major technology themes, introducing a dual-track stock selection mechanism based on market capitalization and revenue growth, and expanding the number of constituent stocks from 30 to 50.

"The Hang Seng Index has been under great pressure in the past six months, missing out on the dividends brought by the global AI (Artificial Intelligence) rally," a person close to Hang Seng Indexes Company told Caijing, "This is only the first step of the reform. We will issue the consultation document first, and then observe the market feedback afterwards."

According to the simulation calculation of Hang Seng Indexes Company, among the 50 constituent stocks of the revised Hang Seng Tech Index, the number of constituent stocks related to advanced hardware and artificial intelligence will increase from the current 5 and 3 to 15 and 6 respectively.

The revision result is expected to be announced at the end of September, and the constituent stock changes will take effect officially on the index adjustment date in December. If the plan is finally approved, this will be the most extensive and systematic structural reform of the Hang Seng Tech Index since its launch in 2020.

As of the end of June 2026, the assets of global funds tracking this index have reached 40.4 billion US dollars. Any change in the constituent stock list and weight will trigger large-scale passive fund position adjustment, whose impact on the Hong Kong stock technology sector goes far beyond the adjustment at the level of index compilation technology.

1

Changes in the Technology Ecosystem of Hong Kong Stocks

Looking back at July 2020, the Hang Seng Tech Index was officially launched, with the original intention of providing global investors with a tool to track the overall performance of Hong Kong-listed technology companies, and the selection scope was limited to the 30 technology enterprises with the largest market capitalization. Today, the Hang Seng Tech Index has grown into one of the most influential flagship indices in the Hong Kong stock market, with the tracking asset size increasing from the initial 1.5 billion US dollars to 40.4 billion US dollars, a surge of nearly 26 times.

Although the market status of the index is growing day by day, its characterization ability has failed to keep pace with the drastic changes in the Hong Kong stock technology ecosystem. In the past, as the Hang Seng Tech Index has been highly concentrated in the two themes of internet and e-commerce since its establishment, the weights of internet platform companies such as Tencent, Meituan, and Alibaba have long been dominant. The rise and fall of the index are largely bound to the outcome of the food delivery subsidy war, the data of e-commerce promotion seasons, and even the approval rhythm of game version numbers.

The investment scope of Hong Kong stock technology continues to expand. In the past few years, the Hong Kong stock market has welcomed a number of artificial intelligence, semiconductor, robotics and specialized technology companies, and the number of enterprises listed in accordance with the new Chapter 18C rules of the Hong Kong Stock Exchange is also increasing. However, these enterprises generally have a short listing history and small market capitalization, and are systematically excluded before reaching the market capitalization threshold.

According to data from Hang Seng Indexes Company, the theme with the highest proportion among Hong Kong tech stocks at the end of 2021 was the internet, accounting for 37.3%. By the first half of 2026, the proportion of the internet dropped to 25.0%, and intelligentization overtook it, accounting for 32.1%.

In addition, within the Hong Kong stock technology sector, companies with strong revenue growth often have small market capitalization. Data from Hang Seng Indexes Company shows that the median revenue growth of existing constituent stocks of the Hang Seng Tech Index is significantly lower than that of non-constituent companies with smaller market capitalization that have not been included.

At present, the Hang Seng Tech Index has included two AI-listed companies, but it has not impacted the weighted stocks. The latest change to the Hang Seng Tech Index that took effect on June 8 included MiniMax and Zhipu, with a combined weight of less than 1%.

2

What is the Impact of the Two Major Revision Proposals?

The revision plan of the Hang Seng Tech Index carries out structural adjustments around two dimensions.

The first is to expand the coverage of technology themes. The specific suggestions are: remove industry requirements, as technological innovation has been integrated into all walks of life and is no longer limited by traditional industry classifications; revise the six major technology themes, covering digital platforms and solutions, artificial intelligence, advanced hardware, robotics and automation, cloud, and frontier technology. In addition, the number of sub-technology themes under the six major technology themes will be expanded from 16 to 24.

Source: Official website of Hang Seng Indexes Company

The second is to introduce a grouped stock selection mechanism. Hang Seng Indexes Company proposes that the stock selection scope of the Hang Seng Tech Index will be limited to the constituent stocks of the Hang Seng Composite LargeCap & MidCap Index. At the same time, a grouped stock selection mechanism will be introduced, selecting stocks under the dual-track system of "market capitalization group" and "revenue growth group", and the number of constituent stocks will be increased from 30 to 50. Specifically, the top 40 stocks will be selected by market capitalization ranking, and the top 10 stocks will be selected by revenue growth ranking.

Source: Official website of Hang Seng Indexes Company

According to the simulation results released by Hang Seng Indexes Company, the revision will bring three impacts on the index characteristics.

First, the index concentration will decrease slightly. The simulation results of Hang Seng Indexes Company show that the weight proportion of the top ten constituent stocks of the index will drop from the current 70.6% to 66.3%, and the index's exposure to leading companies will be more diversified.

Second, the distribution of technology themes will be more diverse. According to the new theme structure, the number of constituent stocks related to "advanced hardware" will increase from 5 to 15, the number of constituent stocks related to "artificial intelligence" will increase from 3 to 6, and new themes such as "frontier technology" will also get access to be included, which significantly broadens the coverage of the technological attributes of the index.

Finally, the revenue growth group will introduce high-growth targets. The simulation results show that the 10 new constituent stocks added from the "revenue growth group" have a median revenue growth of up to 82%, which is higher than the 23.4% of the new stocks added from the "market capitalization group", and far higher than the 13.8% revenue growth rate of the existing constituent stocks.

This article is from the WeChat Official Account "Dushu Yizhi" (ID: dushuyizhi007), Author: Cheng Mengqi, Editor: Guo Nan, Published by 36Kr with authorization.