In 2020, the Hang Seng Tech Index debuted carrying the hopes of becoming "the Nasdaq of Hong Kong," tracking the 30 largest tech companies by market capitalization. Six years on, it never became the Nasdaq — instead the market gave it an unflattering nickname: the "food delivery index."
The reason is obvious: among those 30 slots, internet platform companies carry too much weight, with food delivery, e-commerce, and short-video businesses propping up half the index. Yet this round of AI rally has been driven by computing power, chips, and robotics — leaving the Hang Seng Tech Index watching the gains slip past from the sidelines, failing to "capture any of this round of tech upside."
Not until the evening of August 10 did Hang Seng Indexes Company release a consultation paper, proposing the biggest overhaul of the index since its 2020 launch — expanding constituents from 30 to 50, widening the tech sub-themes from 16 to 24, and unprecedentedly adding two new themes: "Artificial Intelligence" and "Frontier Technology."
On the surface it is about "redesigning an index"; at its core, it is a battle over asset pricing power.
1. Six Years of Itch for the "Food Delivery Index"
A few numbers first, to show just how awkward this index has become.
As of June 2026, assets under management tracking the Hang Seng Tech Index had reached US$40.4 billion — a 27-fold increase from the US$1.5 billion at its 2020 launch. Real money has flowed in, but what that money buys has grown increasingly unworthy of the name.
In 2021, Hong Kong's tech sector was almost synonymous with the internet, with "Internet" and "E-commerce" as the two dominant themes. By 2026, companies engaged in advanced hardware and offering AI solutions were listing on the Hong Kong Stock Exchange in waves, and Specialist Technology Companies (Chapter 18C) were coming to market one after another — the industry landscape had long since changed, yet the index was still stuck on the old map.
The result: this round of AI rally has been concentrated in hard-tech sectors such as computing power, chips, and robotics, while the Hang Seng Tech Index — its weight anchored in internet platforms — simply missed out on the gains. The market voted with its feet and stuck the "food delivery index" label on it.
An index of US$40.4 billion in scale, treated by global capital as "the gateway to Chinese tech assets" — if it remains misaligned, what is at stake is not merely face, but pricing power.
2. A Major Overhaul That "Actually Listened"
Hang Seng Indexes Company's stance this time, in the words of the media, was to "actually listen." The reform in the consultation paper boils down to two pillars:
First, redraw the tech map. Remove the industry restrictions and reorganize the original tech themes into six new themes: Digital Platforms & Solutions, Artificial Intelligence, Advanced Hardware, Robotics & Automation, Cloud, and Frontier Technology. The sub-themes expand from 16 to 24.
Two changes are especially critical: first, "Artificial Intelligence" is elevated from a sub-theme of the former "Intelligence" category directly to a standalone first-tier theme — for the first time, AI has its own "registration" in the index; second, the new "Frontier Technology" theme brings fields that sound deeply "futuristic" — aerospace and satellite technology, quantum computing, brain-computer interfaces, novel food technology, and advanced materials — into the index for the first time.
Second, revamp the stock selection mechanism. Constituents expand from 30 to 50, using a dual-track selection: 40 stocks chosen by market-capitalization ranking, and another 10 chosen by "revenue growth over the past 12 months" ranking — a dedicated door left open for companies that "grow fast but whose market cap has not yet caught up."
This move is intriguing. Hang Seng Indexes Company itself pinpointed the pain: within Hong Kong's tech sector, the companies with the strongest revenue growth often do not have the largest market caps. The old pure market-cap selection would shut these high-growth, smaller-scale companies out. Opening a "revenue growth track" is tantamount to admitting one thing — pricing a tech company cannot rely only on its current size; it must also account for its future slope.
The simulation results also confirm the direction of the reform: the weight of the top ten constituents will fall from 70.6% to 66.3%, lowering concentration; constituents related to "Advanced Hardware" rise from 5 to 15, and those related to "Artificial Intelligence" from 3 to 6 — hard tech's share has visibly risen.
3. The Essence: This Is About Pricing Power, Not the Index
Lift your gaze from "how the index is compiled" to what is really being fought over.
The value of an index lies in its defining "which assets deserve allocation from global capital." The index is the gateway, the compass for passive money. US$40.4 billion in AUM follows that compass, and global ETFs, pension funds, and sovereign funds come to know "Chinese tech" through it.
For the past six years, the Chinese tech this gateway presented to the world was food delivery, e-commerce, and short video — not that these things are unimportant, but that they represent only the "first half" of China's tech industry. The computing power, chips, AI models, robotics, and quantum computing that truly represent the "second half" either never entered the index or carried too little weight.
Reforming the index means reforming this gateway's "catalogue." When "Artificial Intelligence" becomes a standalone theme and "Frontier Technology" is brought in, global capital opening this gateway again will see a more complete Chinese tech sector — and that is the true meaning of "pricing power": making China's hard-tech assets "visible and buyable" to global capital.
In fact, Hong Kong has long been paving the way for AI assets — in May this year, Zhipu and MiniMax, two leading large-model companies, were simultaneously added to the Hang Seng Composite Index and the Hang Seng Tech Index, effective June 8, completing the "three-step" path of index inclusion and Stock Connect inclusion. The investability of AI assets is being unlocked step by step. This reform turns a road already half-paved into a full-blown main artery.
This follows the same logic as the southbound capital. Since the start of this year, southbound capital has made net purchases of over HK$370 billion in Hong Kong stocks; even amid August's market volatility and correction, southbound flows kept buying against the tide. Capital is surging in the same direction — slowly wresting the pricing power of Chinese tech assets back from the hands of the "misaligned old index."
4. Who Will Be the Winners
Once the reform takes effect, several asset classes will clearly benefit:
Hard tech gains weight. Advanced-hardware-related constituents triple (5→15), and AI-related ones double (3→6). Sectors such as semiconductors, computing power, and smart hardware will earn a larger share of "visibility" in the index.
High-growth small-cap companies get their ticket. Who are those 10 slots in the "revenue growth track" for? For companies whose revenue is doubling but whose market cap has not yet caught up. In the past, such companies "could not enter the index no matter how strong they were"; now they have a dedicated channel.
A passive-flow windfall for new entrants. When the constituent changes take effect in December, the newly included companies will be bought in concentrated fashion by the passive funds tracking the index — the most reliable "free lunch" of every annual index rebalancing.
Of course, every coin has another side: the weight of mega-cap platform companies will be diluted (the top ten from 70.6% to 66.3%), and they may face short-term rebalancing sell pressure from passive funds. But over the longer term, an index that better represents the full picture of the tech industry is good for all participants.
5. What Happens Next
The timetable is already clear: the consultation period ends on September 18, the revised results are announced in late September, the September 30 index review is implemented, and the final constituent changes take effect at the December index rebalancing.
For investors, there are three dates worth watching: the finalized revisions in late September, the constituent changes taking effect in December, and the passive-fund rebalancing window around that effective date.
Back to the opening question: what is Hong Kong fighting for?
The answer lies not in the index methodology, but somewhere further out — when an offshore market is to host China's hardest-core tech assets, it must first have a ruler worthy of those assets. This biggest reform of the Hang Seng Tech Index in six years is precisely about changing the ruler.
Not investment advice.
⚠️ Disclaimer: This article reflects personal views only and does not constitute any investment advice. All cases cited have been anonymized.