Recently, more and more friends are looking into Hong Kong stocks, but many don't know where to start. Actually, getting started with Hong Kong stocks isn't that complicated. I've organized some of my observations here, hoping to help those interested in entering the market.

To be honest, Hong Kong stocks are indeed worth paying attention to now. Compared to the Japanese market hitting new highs and the US stock market approaching all-time highs, Hong Kong stocks still have valuations at low levels overall, which presents a good opportunity for value investors. Moreover, the Hong Kong stock market has been trading since 1891, with over 130 years of history. Its market regulation and oversight are top-notch globally, making the investment environment quite mature.

Why is it worth entering Hong Kong stocks? There are several main reasons. First, the geopolitical advantages of Hong Kong, Macau, and Taiwan are obvious—located in East Asia, trading hours are almost the same, language barriers are minimal, making it much more convenient than investing in European or American markets. Second, there are over 1,000 stocks to choose from in the Hong Kong market. Plus, with the Shanghai-Hong Kong Stock Connect now open, mainland funds are continuously flowing in, ensuring ample liquidity. Third, Hong Kong stocks have no limit-up or limit-down restrictions, and two-way trading is allowed, meaning there’s profit potential whether prices go up or down.

Regarding practical operations for beginners in Hong Kong stocks, trading hours are from 9:30 to 12:00 and 13:00 to 16:00 Taipei time, with a one-hour midday break. The minimum trading unit is a "lot," with the specific number of shares decided by the issuing company. Hong Kong stocks use a T+0 trading system, so stocks bought on the same day can be sold on the same day, increasing trading flexibility. Settlement occurs on T+2, meaning funds and stocks are exchanged on the second business day after the trade.

Looking at the indices, the Hang Seng Index is the most watched, composed of the 50 largest listed companies. There’s also the Hang Seng China Enterprises Index focusing on H-shares, and the Hang Seng Tech Index tracking technology stocks. According to HKEX data, as of the end of May 2025, the total market capitalization of Hong Kong stocks is about $5.2 trillion USD, ranking among the top globally.

Personally, I favor several stocks. First is Tencent. As the largest company by market cap on HKEX, Tencent is a leader in China’s communications and social services, and the biggest internet company by scale. Although its stock price plunged in early 2021 due to gaming regulation and anti-monopoly investigations, it started rebounding after policy stability in 2024. As of June 2025, the stock price is in the range of HKD 400-450, with a P/E ratio of about 23, below its five-year average, making it attractive valuation-wise.

BYD is also worth watching. Founded in 1995, the company started with battery manufacturing and has now become a global leader in new energy vehicles. In 2024, BYD’s global vehicle sales reached 4.27 million units, surpassing Tesla to become the top seller in new energy vehicles, ranking fourth worldwide in total vehicle sales. Revenue was approximately $107 billion USD, up 29% year-over-year, with net profit of 40.25 billion RMB, up 34%. The gross profit per vehicle is about 21.02%, even higher than Tesla’s 17.9%. The company is accelerating its international expansion, establishing production bases in multiple countries.

China National Offshore Oil Corporation (CNOOC) also has investment potential. As China’s largest offshore oil and natural gas producer, in 2024, its crude oil output was about 530 million barrels, and natural gas output was around 115 billion cubic meters. According to IEA forecasts, global natural gas demand is expected to grow at an average of 2% annually over the next decade, which is positive for their natural gas business. However, investors should be aware of risks from global oil price fluctuations and environmental policies.

Baidu, China’s largest search engine and AI technology company, reported revenue of about 32.5 billion RMB in Q1 2025, up nearly 3% year-over-year, mainly driven by rapid growth in cloud computing and AI services. The Chinese cloud computing market is expected to grow at an average annual rate of 30% in the coming years. Baidu’s investments in the autonomous driving platform “Apollo” also show long-term potential, attracting collaborations with multiple automakers. But, market competition and policy changes pose risks.

Pop Mart is another interesting stock. This trendy toy company is known for original IPs and blind box products, with its IP Labubu becoming a hit in recent years. It has over 500 stores worldwide and more than 2,000 Robo-Shops across over 30 countries. In Q1 2025, total revenue grew 165% year-over-year, with overseas markets increasing about 475%. JPMorgan predicts that the sales of the “THE MONSTERS” series featuring LABUBU could reach 14 billion RMB by 2027. The company is still in a high-growth phase, especially with strong overseas performance.

Regarding how to invest in Hong Kong stocks for Taiwanese investors, there are mainly three options. First, through Taiwanese brokerage firms via cross-border entrustment—advantages are trading directly in TWD, but it only allows long positions, no leverage, and higher fees. Second, opening an account with a Hong Kong broker—fees are lower, but you need to exchange TWD for HKD or deposit directly in HKD, which involves currency conversion risk. Third, trading via Contracts for Difference (CFDs)—supporting both long and short positions, leverage available, no currency exchange worries, but only suitable for large-cap stocks.

A few points to note when investing in Hong Kong stocks: first, choosing a trading platform is crucial—look for those with strict warning mechanisms and real protection of investor capital. Second, since Hong Kong stocks have no limit-up or limit-down rules, volatility can be higher, so setting reasonable stop-loss points is essential for risk management. Third, avoid putting all your funds into a single stock; diversification helps mitigate risks.

Overall, compared to the Japanese market hitting new highs and the US market approaching record levels this year, the value investment opportunities in Hong Kong stocks are quite abundant. Unless you are very bearish on China’s economy, investing at these valuation levels in leading companies is quite rare. But before entering, you should consider your own investment preferences and risk tolerance to choose the right timing. The high volatility of Hong Kong stocks brings both risks and opportunities.