Nio Expected to Join Hong Kong Stock Index Amid Weak Share Performance

HONG KONG — Nio Inc. (NYSE: NIO, HKG: 9866) is poised to be included in another Hong Kong stock index, potentially attracting passive investment inflows despite its shares’ lackluster performance. The Hang Seng Indexes Company Limited (HSI) will announce the results of its semi-annual review of the Hang Seng family of indexes after trading hours on Friday, February 21, with adjustments taking effect on Monday, March 10, according to a note from Chinese brokerage CICC.

The review will cover major flagship indices, including the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng Tech Index, and Hang Seng Composite Index. Analyst Liu Gang‘s team at CICC highlighted that Nio is the most likely candidate for inclusion in the Hang Seng Index, followed by JD Logistics, Innovent Bio, and Pop Mart.

The team’s calculations prioritized market capitalization, alongside other factors such as the companies’ industry positions. However, they cautioned that historical trends suggest actual results may differ. For instance, Innovent Bio and JD Logistics have previously ranked high in forecasts but were ultimately excluded from the index.

Given the variability of semi-annual deliberations and the significant size of passive funds tracking the flagship index, potential changes in constituents and fund flows are worth monitoring. According to data from Bloomberg and Wind, the current size of ETFs tracking the Hang Seng Index is approximately $27.53 billion, the Hang Seng China Enterprises Index about $5.41 billion, and the Hang Seng Tech Index around $18.66 billion.

Nio, which completed its secondary listing in Hong Kong on March 10, 2022, under the ticker symbol 9866, trades in board lots of 10 Class A ordinary shares. Despite its inclusion prospects, Nio’s stock has struggled in 2024, declining approximately 53 percent for the year in Hong Kong. In contrast, the Hang Seng Index rose about 18 percent, and the Hang Seng Composite Index increased by 16 percent during the same period.

The Hang Seng Index, launched on November 24, 1969, is one of Hong Kong’s earliest stock market indices and remains a key barometer of the region’s market performance. The Hang Seng Composite Index, established on October 3, 2001, covers the top 95 percent of the total market capitalization of securities listed on the Hong Kong Stock Exchange‘s main board.