Year-end review of Hong Kong stocks in 2025: Hang Seng Index rose nearly 28% to lead the world, Huahong rose 240%, Alibaba led the Internet counterattack, and southbound funds bought 1.4 trillion yuan

# Source: Wall Street Insights

## By Zhao Ying

Hong Kong’s major stock indices outperformed global peers, with southbound capital hitting an all-time high. The Metals and Mining sector led the rally by a mile, surging nearly 200% for the year, while the Semiconductor and Healthcare sectors also delivered stellar performances. Among individual stocks, Huahong Semiconductor soared over 240% to top the Hang Seng Tech Index, and stocks related to Horizon Robotics jumped 140% for the year. Among internet giants, Alibaba climbed over 76%, XPeng Motors rose more than 70%, and Baidu gained 59.01%.

Hong Kong’s stock market closed 2025 on a strong note with its best annual performance in five years, as core indices led gains across major global capital markets. The "valuation depression recovery" trend ran through the entire year.

Over the past year, the Hong Kong stock market followed a "strong start then moderate pullback" trajectory. A liquidity-driven rally fueled market recovery in Q1, while policy and liquidity provided dual support in the second half. The Fed’s unexpected rate cut in September pushed the Hang Seng Index to its yearly peak, and the market entered a period of mild volatility adjustment by year-end.

Southbound capital recorded a net inflow of over HK$1.41 trillion for the year, hitting a new annual high since the launch of the Stock Connect mechanism, and emerged as the anchor of market liquidity. The valuation depression recovery trend persisted throughout the year, with 13 stocks surging over 10-fold. High-growth stocks flocked to sectors such as hard technology, biopharmaceuticals, and precious metals.

The IPO market also showed robust vitality. Driven by large-scale IPOs including CATL, the total IPO fundraising in Hong Kong reached HK$286.3 billion in 2025, reclaiming the top spot globally. 19 A-share listed companies debuted in Hong Kong one after another, raising a total of approximately HK$140 billion, accounting for around half of the total IPO proceeds. This marked the year with the largest number of A-share companies listing in Hong Kong in history.

Looking ahead to 2026, multiple institutions have issued optimistic forecasts for Hong Kong’s stock market. CITIC Securities believes that Hong Kong stocks will benefit from the catalysis of the 15th Five-Year Plan and the dual easing policies of major overseas economies. As fundamentals bottom out and rebound, the Hong Kong stock market is poised to embrace a second round of valuation recovery and further earnings resurgence.

### Core Indices Rally Across the Board; Southbound Capital Hits Record High

As of the close on December 31, the Hang Seng Index climbed from around 19,600 points at the start of the year to 25,630 points, surging 27.77% for the year and posting its best annual performance in five years. The Hang Seng Tech Index moved higher in tandem, with a gain of nearly 23.45%, while the Hang Seng China Enterprises Index rose 22.27% for the year. This performance ranked among the top among major global stock indices, outpacing the Nasdaq Composite and the S&P 500.

Southbound capital served as a key driver of Hong Kong’s stock market rally. Data showed that southbound capital recorded a net purchase of HK$1.41 trillion worth of Hong Kong stocks in 2025, hitting a new historical high and representing a significant increase from approximately HK$807.9 billion in 2024.

The IPO market also demonstrated strong momentum. Total IPO fundraising in Hong Kong reached HK$286.3 billion in 2025, reclaiming the No.1 position globally. 12 companies raised over HK$5 billion each during the year, with CATL’s Hong Kong listing setting the record for the largest IPO in Hong Kong in nearly three years. 19 A-share companies listed in Hong Kong successively, raising a total of about HK$140 billion, accounting for roughly half of the total IPO proceeds in Hong Kong, and setting a new record for the number of A-share companies listing in Hong Kong in a single year.

### Metals and Mining Sector Leads by a Mile; Precious Metals Spearhead the Rally

Hong Kong’s stock sectors exhibited distinct structural characteristics. The Raw Materials sector led the rally by a wide margin, with precious metals taking the lead, while the Semiconductor and Healthcare sectors also performed well.

Benefiting from the recovery of the global commodity cycle, the Raw Materials sector surged nearly 200% for the year, emerging as the biggest highlight of the market. Hong Kong-listed gold stocks tracked the rise in gold prices, with Zhufeng Gold skyrocketing 1,286.36% for the year. Non-ferrous metals such as silver, platinum, copper, cobalt, and lithium also staged strong rallies, with Luoyang Molybdenum jumping over 281.05%.

In other sectors, driven by the accelerated domestic development of AI and semiconductor localization, the Semiconductor sector rose 139%. The Healthcare sector also delivered outstanding results, surging over 89% for the year. Domestic innovative pharmaceutical companies rolled out multiple breakthrough research outcomes, and the overseas business development (BD) of innovative drugs progressed steadily.

### 10-Bagger Stocks Flock to Market; Alibaba Leads Internet Sector Rally

The full release of profit-making opportunities in the Hong Kong stock market made "a cluster of 10-bagger stocks" the most prominent feature of the market in 2025. According to Wind data, as of December 31, 379 Hong Kong-listed stocks doubled in price in 2025, among which 13 stocks surged over 10-fold. Jidi Jinbiao Group rocketed more than 41 times to become the "stock king" of the year.

In terms of the distribution of top gainers, the sector clustering effect was clearly visible. In the hard technology and AI transformation sectors, Guangdong-Hong Kong-Macao Holdings soared 33.05 times for the year, thanks to its layout in AI computing infrastructure and strategic cooperation with Huagong Tech. In the biopharmaceutical sector, Chia Tai Tianqing, known as the "first stock of rare diseases", jumped over 18 times, while Clover Biopharmaceuticals and others also rose more than 8 times. The precious metals sector benefited from the all-time high of global gold prices, with Zhufeng Gold surging 12 times for the year.

Among the constituents of the Hang Seng Tech Index, semiconductor stocks performed the best. Huahong Semiconductor skyrocketed over 240% to lead the index, while SMIC rose more than 120% cumulatively. The humanoid robot industry also attracted much attention, with stocks related to Horizon Robotics climbing 140% for the year. Among internet giants, Alibaba rose over 76%, XPeng Motors jumped more than 70%, and Baidu gained 59.01%.

Looking ahead to 2026, both buy-side and sell-side institutions have expressed optimistic outlooks on the Hong Kong stock market. Multiple institutions believe that driven by multiple factors such as improved liquidity and corporate earnings recovery, Hong Kong stocks are expected to extend their upward trend, with the market driver shifting from valuation recovery to earnings growth. CITIC Securities pointed out that Hong Kong stocks will benefit from the internal catalysis of the 15th Five-Year Plan and the "fiscal + monetary" dual easing policies of major overseas economies, especially the US and Japan. Hong Kong stocks not only cover the complete domestic high-quality AI industrial chain, but also see an increasing number of high-quality leading A-share companies listing in Hong Kong. It is expected to benefit from the liquidity spillover from domestic and overseas markets and the continuous catalysis of the AI narrative.

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