The month of July was a particularly bad one for Hong Kong’s Hang Seng Index (HSI) due to the Chinese government’s crackdown on in-house technological firms and educational firms.

Chinese tech stocks in Hong Kong were among the hardest hit in the recent sell-off, which sent the HSI in a tailspin over two days.

UOB Kay Hian analysts Julia Pan and Oong Chun Sung view the correction on the China internet sector as “overdone” following the increased focus on variable interest entity (VIE) structured foreign listed entities by Chinese regulators.

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