Short Selling Surges in Hong Kong Tech Stocks: Zhipu Hits Record Short Volume, Alibaba and Tencent See Spikes

Recent volatility in Hong Kong's tech sector has triggered intensified long-short positioning, with short-selling data through late September revealing record-high activity in select heavyweight stocks.

Alibaba: Widening Price Swings Fuel Divergent Views, Short-Selling Indicators Hit Multi-Week Highs

Alibaba's stock has been trading near the HK$110 level, influenced by southbound fund rebalancing following its inclusion in the Stock Connect program and competitive dynamics in the e-commerce peak season.

Short-Selling Volume:

• Rose steadily from 9.609 million shares at end-August to 14.022 million shares on September 23
• Hit a single-day peak of 19.503 million shares during the period, the highest since August 26

Short-Selling Value:

• Increased from HK$1.091 billion at end-August to HK$1.554 billion on September 23
• Single-day peak reached HK$2.261 billion, also a new high since August 26

Tencent: Frequent Share Buybacks Coincide with Short-Selling Spikes

Tencent has been trading in a range-bound pattern. Despite maintaining daily share repurchases of approximately HK$100 million to support the secondary market, external liquidity concerns have prompted increased hedging activity.

Short-selling data saw a notable surge in mid-September:

Short-Selling Volume:

• Rose from 2.909 million shares at end-August to 3.434 million shares on September 23
• Spiked sharply to 7.401 million shares on a single day during the period, the highest since July 22

Short-Selling Value:

• Increased from HK$1.310 billion at end-August to HK$1.518 billion on September 23
• Single-day peak reached HK$3.367 billion, also a record since July 22

Zhipu: Growth Premium Under Scrutiny as Short Sellers Converge

Unlike the relatively stable defense seen in Alibaba and Tencent, high-beta AI tech stock Zhipu has experienced a sustained pullback, with late-arriving momentum funds exiting and attracting concentrated short-selling.

Short-Selling Volume:

• Surged from 835,300 shares at end-August to 1.432 million shares on September 23, a 71.4% increase
• Single-day peak hit 4.222 million shares, setting an all-time record

Short-Selling Value:

• Rose slightly from HK$958 million at end-August to HK$970 million on September 23
• Single-day peak reached HK$3.098 billion, the largest daily figure since July 9

Market Implications: Divergent Risk Appetite Across Hong Kong Tech

The recent short-selling data highlights a divergence in risk preferences across Hong Kong's tech sector:

• Large-cap stocks (Alibaba, Tencent): Short-selling has been characterized by periodic spikes, primarily used by long-term investors as a hedging tool against overseas macro volatility. The impact on underlying price trends remains relatively limited.

• High-growth names (Zhipu): Record short-selling reflects speculative funds' bearish stance on high-valuation concept stocks, often accompanied by bearish candlestick patterns on heavy volume.

From a positioning perspective, elevated short interest not only caps near-term rebounds but also builds significant potential for short covering. Should macro liquidity improve unexpectedly or positive catalysts emerge, the concentrated short positions could trigger a short squeeze, acting as a catalyst for a tactical rebound in the tech sector.

(Source: Cailianshe)