Hong Kong Tech Short Selling Surges: Zhipu Short Volume Hits Record High

Recent volatility in Hong Kong's tech sector has triggered a sharp escalation in long-short fund battles. According to the latest short-selling data, short interest in key stocks—including Alibaba and Zhipu—has surged, with Zhipu recording an all-time high in shorted shares.

Alibaba: Widening Trading Range Fuels Divergence, Short-Selling Indicators Hit Multi-Week Highs

Alibaba's share price has been oscillating around the HK$110 level, influenced by southbound fund rebalancing following its inclusion in the Stock Connect program and the competitive landscape of the e-commerce peak season.

Short Volume:

• Rose steadily from 9.609 million shares at the end of August to 14.0219 million shares on September 23.
• During the period, daily short volume peaked at 19.5034 million shares, the highest since August 26.

Short Value:

• Increased from HK$1.091 billion at the end of August to HK$1.554 billion on September 23.
• The daily peak reached HK$2.261 billion, also a new high since August 26.

Tencent: Frequent Share Buybacks Coincide with Short-Selling Spikes

Similar to Alibaba, Tencent has been trading in a sideways range. Despite maintaining daily share repurchases of approximately HK$100 million to support secondary market resilience, external liquidity concerns have prompted some funds to increase hedging via short positions.

Tencent's short-selling indicators saw a notable surge in mid-September:

Short Volume:

• Rose from 2.9088 million shares at the end of August to 3.4338 million shares on September 23.
• Within the reporting period, daily short volume spiked to 7.4011 million shares, the highest since July 22.

Short Value:

• Increased from HK$1.310 billion at the end of August to HK$1.518 billion on September 23.
• The daily peak reached HK$3.367 billion, also the highest since July 22.

Zhipu: Growth Premium Under Pressure as Short Sellers Converge

Unlike the relatively stable defense seen in Alibaba and Tencent, Zhipu—a high-beta AI tech stock—has experienced a sustained pullback. The exit of momentum-driven capital has attracted concentrated short-selling activity.

Zhipu's short-selling data surged significantly:

Short Volume:

• Rose from 835,300 shares at the end of August to 1.432 million shares on September 23, an increase of 71.4%.
• During the period, daily short volume spiked to 4.2223 million shares, setting an all-time record.

Short Value:

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

Market Implications: Divergent Risk Appetite in Hong Kong Tech

The recent anomalies in short-selling data highlight a divergence in risk preference across Hong Kong's tech sector:

• Large-cap stocks such as Alibaba and Tencent: The increase in short-selling is characterized by "periodic spikes," primarily driven by long-term funds using short positions as a hedge against overseas macro volatility. The impact on trend direction is relatively limited.

• High-growth stocks such as Zhipu: Short-selling data has hit historical highs, reflecting a bearish stance by speculative funds on high-valuation concept stocks. This is often accompanied by bearish candlestick patterns on heavy volume.

From a trading perspective, elevated short positions not only suppress short-term rebounds but also accumulate significant potential for short covering. Should macro liquidity improve beyond expectations or positive catalysts emerge, the concentrated short positions could trigger a short squeeze, acting as a catalyst for a technical rebound in the tech sector.

(Source: Cailianshe)