On August 24, Yidu Technology (02158) closed down 10.2% to HK$3.875. It traded 22.422 million shares on the same day, with a turnover of HK$87.8961 million. Market sentiment was sluggish for a while under the shadow of the impending withdrawal of Hong Kong Stock Connect.
However, the market revealed a very different signal — Southbound Capital made a net purchase of 3.06 million shares on the same day, accounting for 13.41% of the day's trading volume. The net purchase amount in a single day reached HK$11.7863 million, a record high since June 25, 2026, and achieved net purchases for two consecutive trading days, with a cumulative net purchase of HK$16.9402 million.
According to the Zhitong Finance App, the meaning of this market-reversal move is self-evident: when retail investors sell out due to fears of Hong Kong Stock Connect's withdrawal, the southbound capital that knows the logic of Hong Kong Stock Connect the most is “picking up bargains.”
In fact, the news that Yidu Technology has been transferred out of Hong Kong Stock Connect has already raised concerns in the market. The Hong Kong Stock Connect is the core channel for southbound capital. Once the target is removed, it means that more mainland individual investors will not be able to buy directly through this channel, and liquidity expectations will cool down.
But the operation of the Southbound Fund gave a counterintuitive answer.
Judging from the data, Southbound Capital has accumulated net purchases of 4.615,500 shares in the past 5 trading days, with a cumulative net purchase amount of HK$18.8312 million; while the cumulative net sales for the past 30 trading days were only HK$7.1765 million. This means that in less than a week, southbound capital not only erased the net sales volume of the previous month, but also drastically converted to net purchases.
As of August 24, Southbound Capital held a total of 244 million shares, an increase of 1.25% over the previous trading day. The market value of shares held reached HK$945 million, with a shareholding ratio of 22.71%.
In other words, out of every 4 shares in circulation of Yidu Technology, nearly 1 share is held by Nanxia Capital.
The core logic of the reason why Southbound Capital dared to reverse the market and increase its positions is that the transfer of Hong Kong Stock Connect affects liquidity expectations rather than company fundamentals. Yidu Technology's 2026 fiscal year has clearly proved that the company's fundamentals are at a historic inflection point — the first full year profit was 787.66 million yuan, and net profit to mother was 72.709 million yuan, which greatly exceeded the profit forecast upper limit by about 30%; the net operating cash flow in the second half of the year was corrected to 29.3 million yuan, indicating that the company had switched from “burning money for growth” to “self-hematopoiesis.”
More importantly, the three major business segments of Yidu Technology went hand in hand: AI for Medical's revenue surged from 29.7% to 39.7%; AI for Life Sciences revenue exceeded 270 million yuan, with 17 of the world's top 20 multinational pharmaceutical companies as customers; and AI for Care's revenue of about 170 million yuan, up 37.6% year over year.
When a company also has all the elements of “initial profit+positive cash flow+high growth in the three major sectors+widening data barriers,” the determination of whether Hong Kong Stock Connect is among them does not actually have a fundamental impact on its long-term value.
From a trading perspective, the August 24 decline itself also showed signs of a panic sell-off.
The stock price plummeted 10.2% on the same day, but the volume expanded to 22.422 million shares, with a turnover close to HK$88 million — a drop in volume often meant a panic market surged out, and Southbound Capital just took on this part of the chip. Based on an average transaction price of HK$3.92, Southbound Capital has absorbed a large amount of cheap chips at a relatively low level.
From a valuation perspective, based on a profit of 787.66 million yuan in fiscal year 2026 and a market value of about HK$4.5 billion, static PE is about 50 times higher; however, if profit for the second half of the year is annualized (about 141.5 million yuan), dynamic PE is only in the 20 times range. For a company with a revenue growth rate of 14.6%, a continuous increase in gross margin, and a booming AI healthcare circuit, this valuation level is clearly underestimated.
Looking back at history, the operations of Southbound Capital before and after the transfer of the Hong Kong Stock Exchange were often forward-looking. While the market was still digesting the negative sentiment of “exit,” they were already voting with real money.
Net purchases of HK$1,88312 million were accumulated in the past 5 trading days, while net sales of HK$7.176,500 were accumulated in nearly 30 trading days — this “sharp turn” trend shows that Southbound Capital recently formed a clear consensus: the short-term shortfall of Hong Kong Stock Connect's exit has been overreacted by the market, and the fundamental inflection point of Yidu Technology is the long-term variable worth paying more attention to.
As fears spread and stock prices plummeted, the “smart money” that knows the logic of mainland finance is quietly opening positions — this itself is a reverse signal worth paying attention to. After all, in capital markets, the most expensive are often not undervalued, but missed opportunities to undervalue.