Why is northbound capital seeing net outflows?

Mainland investors are becoming more risk-averse due to slowing domestic demand and policy uncertainty.

How was JD Health's target price determined?

Based on earnings forecasts, sector-average P/E, and growth rates using DCF and relative valuation models.

Why is HKEX considering extended trading hours?

To enhance integration with Shanghai and Shenzhen markets and improve trading convenience for global investors.

What impact does declining southbound flow have on the market?

Short-term liquidity pressure, but limited long-term structural impact.

What caused the AI stock sell-off?

Profit-taking driven by overheating concerns and weaker-than-expected earnings from some firms.

【Yuan Zhifeng Column】Northbound Funds Record Two Consecutive Days of Net Selling

Published Jul 21, 2026 5:50 AM ・ Updated Jul 21, 2026 6:09 AM ・ 9 min read ・ Source: PR Times

Today's pick is JD Health (6618, $38.28), with a target price of $42.0 and a stop-loss at $36.0. Northbound funds saw net outflows for the second consecutive day, while Hong Kong stocks rose amid declining turnover.

Today's Recommendation - JD Health (6618, $38.28), Target Price $42.0, Stop-Loss Price $36.0

1) Market Outlook

Hong Kong stocks rose significantly on Monday, but turnover declined, and short-selling ratio increased to a relatively high 20.2%. Southbound funds maintained net selling, primarily reducing positions in large-cap index ETFs. The market is expected to consolidate in the short term, with the Hang Seng Index potentially falling to 24,000 points. Investors are advised to buy on dips.

2) Summary of Monday’s China-Hong Kong Market Conditions

The Hang Seng Index opened 273 points higher on Monday, peaking at 25,156 (up 593 points), before narrowing its gains to close near the day's high at 25,143, up 580 points or 2.4%. Turnover decreased by 12% to HK$304.3 billion, compared to a June average of HK$319 billion.

Southbound funds under Stock Connect recorded net outflows of approximately HK$6 billion. Alibaba (9988), NetEase (9999), and Meituan (3690) saw net inflows of HK$1.86 billion, HK$1.41 billion, and HK$470 million respectively. E Fund Hang Seng ETF (2800), CSOP Hang Seng Tech Index (3033), and Tencent (700) recorded net outflows of HK$5.19 billion, HK$1.28 billion, and HK$580 million respectively. Cumulative net inflows since July amount to approximately HK$72.6 billion, compared to HK$27.1 billion in June.

The Hang Seng Index rose 2.4%, with 86 components up, 5 down, and 2 flat. CNOOC (883) surged over 5%, the strongest among blue chips. PetroChina (857), China Construction Bank (939), CSPC Pharmaceutical (1093), China Resources Power (836), China Aluminum (2600),洛阳钼业 (3993), and Lao Pu Gold (6181) rose over 4%. Bank of China (3988), China Merchants Bank (3968), Anta Sports (2020), Innovent Biologics (1801), WuXi Biologics (2269), Sino Biopharm (1177), BeiGene (6160), and Hansoh Pharma (3692) gained over 3%. ICBC (1398), Ping An (2318), CITIC Limited (267), China Resources Land (1109), China Hongqiao (1378), and China Unicom (762) rose over 2%. Power Assets (6) and CLP Holdings (2) fell over 1%, the worst performers among blue chips.

The Hang Seng Tech Index rose 2.8% to close at 4,752, with 25 components up, 4 down, and 1 flat. Large tech stocks outperformed: Alibaba (9988), Tencent (700), Meituan (3690), Xiaomi (1810), and JD.com (9618) rose over 3%; NetEase (9999) and Kuaishou (1024) gained over 4%. SenseTime (20) surged over 5%, the top gainer. NIO (9866), Bilibili (9626), Trip.com (9961), Tongcheng Travel (780), Hua Hong Semiconductor (1347), and SMIC (981) rose over 3%. Zhipu (2513) and Minimax (100) plunged over 19% and 10%, the worst performers. Tencent Music (1698) fell over 1%.

By sector, large tech, coal, oil, gold, mining, pharmaceuticals, aviation, and power stocks outperformed. Yankuang Energy (1171) and China Coal Energy (1898) rose over 9% and 8% respectively. CNOOC (883) and PetroChina (857) rose over 5% and 4%. Zhaojin Mining (1818) and Shandong Gold (1787) gained over 5% and 3%.洛阳钼业 (3903) and China Aluminum (2600) rose over 4%. CSPC Pharmaceutical (1093) and Hengrui Medicine (1276) gained over 4%. China Eastern Airlines (670) and China Southern Airlines (1055) rose over 4%. China Resources Power (836), Huaneng Power (902), and China Power (2380) rose over 4%.

AI and lithium mining stocks declined. Zhipu (2513) and Minimax (100) fell over 19% and 10%. Ganfeng Lithium (1772) and Tianqi Lithium (9696) dropped over 4%.

The Shanghai Composite Index opened 0.7% higher, briefly rising 1.8%, then gradually declined, falling as much as 0.6% to 3,741.11 in the afternoon—the lowest in over 10 months—before rebounding to close at 3,796.28, up 0.9%. The Shenzhen Component Index fell 0.7%. The STAR 50 Index rose 0.2%. Total turnover in Shanghai and Shenzhen reached approximately RMB 2.7 trillion, up RMB 50 billion from the previous day. The June daily average was about RMB 3.11 trillion.

3) Stock-Specific News

Bloomberg, citing sources, reported that HKEX (388) is considering extending trading hours, including starting 30 minutes earlier and eliminating the lunch break. (Hong Kong Economic Journal)

The UK Financial Times reported, citing sources, that CK Hutchison’s (1) plan to list Watsons Group in London may be delayed until next year due to regulatory and other complexities in Asia. (Hong Kong Economic Journal)

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Source: PR Times
Category: News
Organizations: Minimax

【Yuan Zhifeng Column】Northbound Funds Record Two Consecutive Days of Net Selling

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