Changpeng Wan
Korean Capital Floods Chinese Equities
South Korean retail investors have dramatically intensified their investments in Chinese securities as revealed by Korea Securities Depository’s SEIbro data center. Boosting their acquisition of Hong Kong and mainland A-shares, these investors positioned Chinese equities as their second-largest overseas investment destination to date in 2025. Journalist Wu Juanjuan (吴娟娟) reports unprecedented trading volumes reflect strategic positioning in tech, green energy, and consumer sectors.
Summary and Key Trends
- Korean investors poured $5.76 billion into Chinese stocks (A+H shares) year-to-date, trailing only US markets in overseas allocations
- Alibaba-W became the most purchased Hong Kong stock, attracting $20.4 million in net buys during July 21-25 alone
- Industrial leaders like BYD and Xiaomi dominated yearly purchases while niche players like BitMine surged in popularity
- Margin debt ballooned to ₩21.83 trillion ($16.2 billion) as KOSPI’s 33.79% surge fueled investment fervor
- A-shares including Hengli Hydraulics and Kweichow Moutai gained traction in South Korean portfolios
Market Allocation Shifts Revealed
According to KSD’s SEIbro datasets tracking international equity flows, cumulative Korean retail transactions through July 25 expose critical geographical preferences:
- United States: $335.27 billion
- China (A+H Shares): $5.76 billion
- Eurozone: $4.40 billion
- Japan: $3.92 billion
China’s Consistent Allure
This Korean buying spree solidifies China’s position as the preferred Asian investment hub despite market volatilities. Lower valuations following regulatory adjustments and sectoral growth potential in EVs and renewables attracted methodical accumulation. Persistent net inflows to Hong Kong listings demonstrate confidence in Chinese tech’s global competitiveness.
Weekly Hong Kong Stock Leaders
July 21-25 witnessed intensified Korean acquisition velocity. Net purchases reveal targeted bets:
- Alibaba-W: $20.39 million
- Contemporary Amperex Technology (CATL): $17.95 million
- BYD Co.: $7.24 million
- Global X China Core Tech ETF: $2.72 million
- XPeng Inc.: $2.12 million
- UBTECH Robotics: $1.47 million
- Akeso Inc.: $1.09 million
- Meituan: $0.99 million
Accelerating Purchase Momentum
Transaction values notably outpaced the previous week, indicating growing conviction. Alibaba-W purchases surged 52.4% week-over-week while consumertech darling UBTECH entered top rankings. Analysts attribute this Korean buying spree to relative valuation gaps versus overheated domestic tech stocks.
A-Share Accumulation Patterns
Korean capital simultaneously targeted mainland listings, with industrial and financial firms leading:
- Hengli Hydraulics: $2.94 million
- Proya Cosmetics: $0.36 million
- Kweichow Moutai: $0.28 million
- Tongwei Solar: $0.27 million
- Jiangsu Bank: $0.23 million
- AVIC Shenyang Aircraft: $0.22 million
Industrial and Tech Focus
Korean investors demonstrated clear preferences for automation (Hengli Hydraulics), renewable infrastructure (Tongwei), and aerospace defence (AVIC). Selective accumulation reflects confidence in China’s advanced manufacturing policy tailwinds.
Yearlong Investment Leaders
Aggregate 2025 figures reveal strategic positioning in new economy champions:
Dominant Hong Kong Holdings
- Xiaomi Group-W: $169.0 million
- BYD Co.: $101.0 million
- Alibaba-W: $89.9 million
- Contemporary Amperex: $78.8 million
- Lao Feng Xiang Gold: $29.2 million
Mainland Stock Champions
- BYD (Shenzhen): $7.18 million
- Hengli Hydraulics: $3.59 million
- Huatai Securities: $2.16 million
- Top Group Auto Parts: $1.48 million
- ChinaAMC Robotics ETF: $1.31 million
Market Context: Investor Psychology
Unprecedented leverage accompanies Korean stock enthusiasm. Unsettled margin balances reached ₩21.83 trillion ($16.2 billion/USD) by July 25 as KOSPI’s 33.79% yearly surge encouraged risk appetite. While deposit balances slightly dipped to ₩65.16 trillion ($48.4 billion), brokerages report expanded credit lines for cross-border trades.
Strategic Implications and Forward Outlook
This Korean buying spree signals recognition of Chinese equities’ recovery potential. Several factors suggest continuity:
Follow-On Capital Deployment
Portfolio rebalancing remains likely as Korean investors seek diversification beyond domestic tech concentration risks. ETF inflows (Global X China Tech, ChinaAMC Robotics) indicate passive strategy adoption alongside stock picking.
Sector Rotation Signals
Heightened interest in automation equipment, renewable supply chains, and premium consumer goods marks early cyclical positioning. These Korean purchases may preview broader institutional momentum.
Investors should monitor SEIbro’s monthly disclosures for confirmation of sustained accumulation and broadening scope beyond current leaders. Deep value opportunities exist among smaller A-share industrials with export exposure while Hong Kong’s tech stalwarts offer growth at reasonable multiples. The ongoing Korean buying spree warrants investor attention as leading indicator of regional capital flows.
