Chinese AI Firms Set to Boost Hang Seng Tech Index with $1 B+ Inflows

On 8 June 2026, the Hang Seng Tech Index will add two Chinese AI model firms—Knowledge Atlas Technology, which runs Zhipu AI, and MiniMax. Morgan Stanley analysts estimate the additions will generate $1.25 billion-$1.75 billion of passive inflows, a significant and substantial boost, reshaping the index.

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The Hang Seng Tech Index has dropped over 11 % YTD, with only seven constituents posting gains—Hua Hong Semiconductor, Lenovo, JD.com, Midea and several EV makers. Investor interest in Chinese generative-AI models remains high after Knowledge Atlas and MiniMax listed in January.

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Knowledge Atlas Technology (Zhipu AI) focuses on coding-oriented large-language models; MiniMax offers a broader suite covering text, audio and AI-agent tasks. Morgan Stanley’s Asia-Pacific equity research team raised price targets to HK$990 for Knowledge Atlas and HK$1,100 for MiniMax.

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Morgan Stanley projects each AI model could earn at least US$1 billion in 2026, potentially more than doubling in 2027. The cost of Chinese AI services rose to about 17 % of U.S. pricing in Q1 2026, up from 5 % a year earlier.

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The inflows should raise the index’s AI exposure, improve liquidity and draw AI-focused funds. Analysts say AI and large-language-model names will become a “much bigger driver” of market performance, shaping future index rebalancing.

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Morgan Stanley analysts note strong regulatory support, with tech accounting for 40 % of Hong Kong IPO fundraising YTD and 43 % of the pipeline, reinforcing AI as a durable market force.

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Tencent and Alibaba, the index’s two largest constituents, have each fallen double digits this year, underscoring doubts that AI-driven inflows alone can lift the broader tech sector.

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• “We believe AI and [large language model] names will become a much bigger driver of Hong Kong equity markets, reshaping index composition, performance, liquidity, and fund flows,” — Morgan Stanley analysts

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• “Strong regulatory support is evident, with tech accounting for 40% of HK IPO fundraising YTD and 43% of the pipeline, reinforcing AI as a durable force in Hong Kong's equity market,” — Morgan Stanley analysts

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The Hang Seng Tech Index will be rebalanced on 8 June 2026 to add Knowledge Atlas and MiniMax. Morgan Stanley expects both firms to exceed US$1 billion in revenue this year, with earnings potentially more than doubling in 2027, further shaping fund flows into Hong Kong’s tech sector.

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