Hong Kong Stock Introduction Guide: Start Investing in Hong Kong Stocks with These Five Leading Stocks

For Taiwanese investors, Hong Kong stocks are an important gateway to international investment and a strategic layout of the Chinese and Asia-Pacific markets. This guide will systematically introduce the trading characteristics, investment advantages, and trading rules of Hong Kong stocks, and select representative Hong Kong stock targets to help investors formulate their Hong Kong stock investment plans.

Hong Kong Stock Market: Mature, Fair, Efficient

As one of Asia’s most mature capital markets, Hong Kong stocks possess several notable advantages that warrant close attention from Taiwanese investors:

Market History and Regulation Hong Kong’s securities market dates back to 1866, with the first exchange officially established in 1891. After over 130 years of evolution, it has formed clear trading rules and a strict regulatory system. As one of the fairest and most mature markets in the world, this well-regulated environment allows investors to participate in Hong Kong stock trading with confidence.

Geographical and Language Advantages Hong Kong, Macau, and Taiwan are all located in East Asia, with minimal differences in trading hours and no language barriers. Economic cooperation among the three regions is increasingly close, making it easier for investors to grasp policy developments and financial trends. Compared to the time difference and understanding costs in European and American markets, investing in Hong Kong stocks is significantly more convenient.

Rich Investment Products Hong Kong’s stock market offers over 1,000 stocks, numerous public funds, and bonds, providing ample choices for investors.

Capital Flows and Liquidity Since the launch of the Shanghai-Hong Kong Stock Connect, investors from both regions can buy each other’s stocks. Continuous inflows of mainland funds into the Hong Kong market inject sufficient trading volume and liquidity.

Two-Way Trading Mechanism Compared to mainland China and Taiwan stock markets, Hong Kong stocks allow both long and short positions without daily price limit restrictions, offering greater profit potential.

Overview of the Hong Kong Stock Market

The Hong Kong Stock Exchange (HKEX) was listed on June 6, 2000, becoming Hong Kong’s only official securities trading platform. As of the end of May 2025, the total market capitalization of Hong Kong stocks reached approximately US$5.2 trillion, ranking among the top in global securities markets.

Market Structure Hong Kong stocks are mainly divided into Main Board and GEM (Growth Enterprise Market). The Main Board includes large companies such as Tencent, Alibaba, HSBC, with higher market value and trading volume. The GEM focuses on small and medium-sized innovative companies, with higher volatility, mainly supporting growth-oriented enterprises that do not meet Main Board criteria since its redefinition in 2021.

Classification System Based on market concepts, Hong Kong stocks are mainly divided into three categories:

• Blue Chips: Constituent stocks of the Hang Seng Index, market leaders with stable performance and good reputation
• H-shares: Chinese state-owned enterprises registered in China and listed in Hong Kong
• Red Chips: Companies incorporated outside China but with actual business operations in China

Trading Characteristics Hong Kong stocks are traded from 9:30 to 12:00 and 13:00 to 16:00 Taipei time, adopting a “T+0” system (buy and sell on the same day), with settlement T+2. Trading units are measured in “lots,” with specific share quantities determined by the issuing company.

Index System The Hang Seng Index (HSI) comprises the 50 largest companies by market value in Hong Kong. The Hang Seng China Enterprises Index (HSCEI) focuses on Chinese H-shares. The Hang Seng Tech Index (HSTECH) includes Chinese technology and internet companies, representing the overall, state-owned, and technology sectors of Hong Kong stocks.

Hong Kong Stocks vs US Stocks: Trading Rules Comparison

The biggest differences between Hong Kong stocks and US stocks are the presence of midday trading breaks, lower dividend tax rates, and differences in minimum trading units. Since Hong Kong and Taiwan share no time difference, Hong Kong stock trading hours align well with Taiwanese investors’ routines, making it more accessible.

Three Ways to Invest in Hong Kong Stocks

Taiwanese investors can access Hong Kong stocks through three main channels:

Direct Trading via Taiwanese Securities Firms Open an account with a Taiwanese securities firm to trade Hong Kong stocks directly. Advantages include trading in TWD, but it only allows long positions, no leverage, no short selling, and relatively higher fees.

Opening Accounts with Hong Kong Brokers Trade through Hong Kong brokers like Interactive Brokers, Futu, etc. Advantages include lower fees; disadvantages include currency conversion costs when depositing in HKD or USD, and limited leverage for direct Hong Kong stock trading.

CFD Trading Contracts for Difference (CFD) allow traders to take both long and short positions, support margin trading and leverage. Advantages are high flexibility and no currency exchange concerns; disadvantages include typically covering only large-cap stocks, limited options for small-cap stocks, and increased risk due to leverage.

Notable Hong Kong Stock Picks (June 2025)

After screening, the following 15 companies with market caps over HKD 20 billion are noteworthy due to their industry position and historical performance:

In-Depth Analysis of Selected Hong Kong Stocks

Tencent Holdings (0700.HK): Internet Leader

As the largest company by market value on HKEX, Tencent was founded in 1998 and is China’s absolute leader in communications and social services, as well as the largest internet company. Founders Pony Ma and Jack Ma are known as the “Two Ma’s,” and many Chinese internet companies are either invested in by Tencent or hold shares in Alibaba.

In early 2021, due to gaming regulation, fintech compliance, and antitrust investigations, the stock price fell sharply from its historical high of HKD 775. However, by 2024, as policy environment stabilized, Tencent rebounded from lows. As of June 2025, the stock price remained in the HKD 400-450 range, with a P/E ratio of about 23x, below the five-year average, making valuation attractive.

Relying on an irreplaceable social ecosystem, diversified revenue streams, and improving policy environment, Tencent remains one of the most stable long-term Hong Kong stock options for investors.

BYD Co. (1211.HK): Leader in New Energy Vehicles

Founded in 1995, BYD initially started with battery manufacturing and has transformed into a global leader in new energy vehicles. In 2024, BYD sold 4.27 million vehicles worldwide, surpassing Tesla for the first time to become the global leader in EV sales, ranking fourth in global car brand sales.

Financially, in 2024, revenue was approximately US$107 billion, up 29%; net profit was RMB 40.25 billion, up 34%. The per-vehicle gross profit margin was about 21.02%, higher than Tesla’s 17.9%, indicating cost control and profitability advantages.

Accelerating international expansion, BYD has established production bases in multiple countries, helping to reduce costs and expand markets. This Hong Kong stock has strong growth potential.

China Marine Oil (0883.HK): Energy Supply Stability

CNOOC, China’s largest offshore oil and gas producer, produced about 530 million barrels of crude oil and approximately 115 billion cubic meters of natural gas in 2024, demonstrating stable energy production and growth potential.

The International Energy Agency forecasts that natural gas demand will grow at an average annual rate of 2% over the next decade, benefiting CNOOC’s natural gas business. The company’s financial performance is relatively stable, making it a worthwhile investment.

Risks include global oil price fluctuations, environmental policies, US-China trade tensions, and geopolitical risks.

Baidu Group (9888.HK): AI and Cloud Computing Outlook

Baidu, China’s largest search engine and AI technology company, reported total revenue of about RMB 32.5 billion in Q1 2025, a nearly 3% YoY increase, mainly driven by rapid growth in cloud computing and AI businesses.

Market research predicts China’s cloud computing market will grow at an average annual rate of 30% in the coming years, with Baidu showing significant growth potential. Its autonomous driving platform “Apollo” has attracted cooperation from multiple automakers, providing new growth momentum.

Investors should watch for increasing market competition (with emerging companies like ByteDance) and regulatory changes that pose risks.

Pop Mart (9992.HK): Trendy Consumer Star

Pop Mart is a leading Chinese trendy toy company known for original IPs and blind box products. Its popular IP Labubu has gone viral recently, doubling its market value, with new product launches often attracting long queues.

It has over 500 stores worldwide and more than 2,000 Robo-Shops across over 30 countries. In Q1 2025, revenue increased by 165% YoY, with overseas markets growing about 475%. JPMorgan forecasts that sales of the “THE MONSTERS” series featuring Labubu could reach RMB 14 billion by 2027.

Pop Mart’s performance remains in rapid growth, with outstanding overseas market and high-end IP commercialization, showing strong growth potential. This Hong Kong stock exemplifies opportunities in new consumer sectors.

Key Points for Hong Kong Stock Investment

Choose Reliable Trading Platforms Investment platforms are crucial; select reputable platforms that can protect principal and provide comprehensive risk alerts, avoiding irresponsible black platforms.

Set Reasonable Stop-Losses Hong Kong stocks have no daily price limit; investors should pay extra attention to risk management, setting stop-loss levels within reasonable ranges to prevent unexpected losses.

Diversify to Reduce Risks Avoid concentrating funds in a single Hong Kong stock; diversify across different targets and adopt a light position strategy to minimize asset risks.

Summary

Compared to the new highs of the Nikkei, the approaching highs of US and Taiwanese stocks, Hong Kong stocks are at a relatively low valuation, offering attractive value investment opportunities. Unless extremely pessimistic about China’s economic prospects, current prices present rare chances to participate in undervalued leading Hong Kong stocks.

Investing in Hong Kong stocks should be based on personal investment preferences and risk tolerance, choosing appropriate timing. The high volatility of stock prices brings both risks and opportunities to investors.