On November 22, 2025, Hang Seng Indexes Company officially released the results of the quarterly review for the Hang Seng Index series, covering the period ending September 30, 2025. Among the most notable changes were: Innovent Biologics (01801.HK) being added to the Hang Seng Index for the first time, making it the first biotech company to enter the blue-chip index; the total number of constituents in the Hang Seng Index increased from 88 to 89. Meanwhile, the Hang Seng Tech Index underwent a structural adjustment, with electric vehicle manufacturer Li Auto (09863.HK) being added, while semiconductor equipment leader ASMPT (00522.HK) was removed. The number of constituents in the Tech Index remained unchanged at 30.

Innovent Biotech's Inclusion: A Milestone for the Biotech Sector

As a leading player in China's innovative drug industry, Innovent's inclusion in the Hang Seng Index marks a significant milestone for the recognition of high-growth biotech companies in the Hong Kong stock market. The company has made continuous breakthroughs in areas such as oncology immunotherapy, autoimmune diseases, and metabolic disorders, and has successfully commercialized several major products. According to its third-quarter financial report for 2025, Innovent's revenue grew by more than 60% year-on-year, with its core product, Sintilimab, continuing to see strong sales, and overseas licensing revenue significantly increasing.

Innovent's inclusion not only fills the gap in the Hang Seng Index for biotech representation but also reflects the Hang Seng Index Company's ongoing strategy of diversifying the index and enhancing coverage of emerging industries. Notably, Innovent has already been an important constituent of the Hang Seng Healthcare Index and Hang Seng Biotechnology Index, and its "blue-chip" status is expected to further attract passive fund inflows.

Structural Adjustment in Hang Seng Tech Index: Li Auto Joins, ASMPT Exits

The Hang Seng Tech Index also saw its second structural adjustment of the year. Li Auto, with its rapid expansion in the smart electric vehicle sector and cost-control advantages, successfully entered the index. Since the beginning of 2025, Li Auto has consistently ranked among the top three in new energy vehicle deliveries, accelerated its overseas export expansion, and deepened its cooperation with Stellantis, all of which helped its market capitalization and liquidity meet the criteria for inclusion.

On the other hand, ASMPT was removed from the Hang Seng Tech Index due to the downturn in the semiconductor industry cycle and a slowdown in semiconductor equipment capital expenditure, which has pressured its stock price and weakened its liquidity metrics. This move is seen as the Hang Seng Index Company's way of implementing a "survival of the fittest" mechanism in the tech sector, aiming to ensure the index better reflects the core drivers of the current technology industry.

Behind the Index Structural Upgrades: A New Ecosystem for Hong Kong Stocks

The direction of this quarterly review indicates that the Hang Seng Index system is undergoing structural upgrades. Growth sectors are increasingly gaining weight within the index, with biotech, new energy vehicles, artificial intelligence, and digital enterprises receiving more allocation space. The inclusion of Innovent and Li Auto is a reflection of the Hong Kong market's revaluation of an "innovation-driven economy." With the total number of Hang Seng Index constituents now expanding to 89, the coverage of industries has broadened, making the index distribution more balanced across finance, consumption, technology, healthcare, and high-end manufacturing, and better reflecting the current market structure.

This adjustment also reflects the changing logic behind long-term fund allocations. As the core benchmark for international investors tracking Hong Kong stocks, the increasing "new economy" characteristics of the Hang Seng and Tech Indexes are likely to attract more foreign capital through "benchmark-based allocations." Meanwhile, the weight of traditional tech manufacturing sectors has been reduced, as exemplified by ASMPT's removal, indicating that the index composition is evolving towards "de-cyclicalization"—reducing the impact of profit volatility and the significant influence of industry cycles, thereby enhancing the index's overall stability and growth characteristics.

Investor Focus on Subsequent Impact

Market participants typically view the quarterly review changes as important signals for capital flows. It is expected that these adjustments will gradually be reflected in trading over the coming weeks. Passive funds, especially ETFs tracking the Hang Seng and Hang Seng Tech Index, will adjust their positions before the changes take effect, leading to certain capital flows. The biotech and new energy vehicle sectors are likely to receive more attention from the market, which may boost sentiment in these sectors.

In the medium to long term, as the weight of new economy constituents increases, the growth potential and representativeness of the Hang Seng Index will continue to enhance. This will not only optimize the risk-return characteristics of the index but also provide global investors with a more relevant tool for allocating Hong Kong stocks that align with current development trends.