How Mainland Chinese Investors Can Buy Tencent Stock via Stock Connect Without Opening a Hong Kong Account

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Do you want to invest in Tencent but don’t have a Hong Kong account? The good news is that you can fully use your existing A-share account to buy directly through the “Stock Connect” mechanism. Many investors participate in Hong Kong stocks via this official channel, with southbound trading volume reaching 3.2 trillion HKD in the previous fiscal year alone. This solves the problem of not being able to directly buy Tencent A-shares.

You only need to meet two prerequisites:

1. You already have an A-share securities account.
2. Your account assets have averaged no less than 500,000 RMB per day over the past 20 trading days.

The entire activation and trading process can be completed online, so you don’t need to visit Hong Kong in person.

Key Points

• Mainland investors can buy Tencent stocks through the “Stock Connect” mechanism using their A-share account without needing to open an account in Hong Kong.
• Activating Stock Connect requires meeting two conditions: having an A-share account and maintaining an average daily asset value of at least 500,000 RMB over the past 20 trading days.
• The Stock Connect activation process is simple and can be completed online via the broker’s app, including submitting an application and passing a knowledge assessment.
• When trading Hong Kong stocks via Stock Connect, the system automatically handles RMB-to-HKD currency conversion, but investors should be aware of trading fees and dividend taxes.
• The Hong Kong stock market uses T+0 trading with no price limit restrictions, which differs from A-share rules, so investors need to understand these risks.

Stock Connect Activation: Checking Prerequisites

Before you start the online Stock Connect activation process, you need to confirm that you meet the two mandatory prerequisites. Think of it as completing the “newbie tasks” before unlocking the exciting content ahead. Let’s check them one by one.

Asset Requirement: Average 500,000 RMB Daily

This is the core financial threshold for activating Stock Connect. Your securities account must meet the requirement of “an average daily asset value of no less than 500,000 RMB over 20 consecutive trading days.”

How is the “average 500,000 RMB” calculated? The calculation is straightforward. The broker’s system automatically tallies the total assets in your securities and cash accounts, then divides by the 20 trading days to get the daily average. The asset scope is quite broad and typically includes:

• Stock market value
• Fund share value
• Bond market value
• Cash balance in the account

In simple terms, you just need to ensure that over the past roughly one month, the total assets in your securities account average at least 500,000 RMB per day.

Account Requirement: Existing A-Share Account

Stock Connect is not a separate account that you need to open anew; it is an “additional permission” added to your existing A-share account. Therefore, you must already have a normal-status A-share account opened with a mainland Chinese broker (whether for the Shanghai or Shenzhen exchange).

The official name of this mechanism is “Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect”, which together form the trading link connecting mainland China and Hong Kong stock markets. Once the permission is activated, you can directly buy stocks listed on the Hong Kong Stock Exchange through your Shanghai or Shenzhen account. Since there is no Tencent A-share equivalent, Stock Connect becomes the official way for you to invest in this company.

Online Stock Connect Activation: Three Steps to Complete

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Once you confirm that you meet the asset and account prerequisites, the activation process is very simple. You can complete all operations on your phone, and the entire process is as convenient as applying for a credit card. Below, we break down the three steps.

Log into Broker App and Find the Entry Point

The first step is to locate the Stock Connect activation application entry. This feature is usually tucked away in a menu within your regular broker app.

Focus on the following common locations:

• Business Handling Center: Most brokers place Stock Connect activation in sections like “Business Handling” or “Online Services Hall.”
• My Account Page: Some apps may also provide a quick entry for permission activation on the “My” or “Account Settings” page.

Tip If you can’t find the entry, the fastest way is to use the search function within the app. Try searching for keywords such as “Stock Connect”, “Activate Hong Kong Stocks”, or “Shanghai-Hong Kong Connect”, and the system will usually guide you to the correct page.

Submit Application and Complete Knowledge Assessment

After finding and entering the entry point, you will proceed to the formal application process. This mainly involves two parts: submitting information and completing a simple knowledge questionnaire.

First, you need to submit the application online. This step primarily confirms your identity and intent, with the following specific steps:

1. Confirm Personal Information: The system will automatically display your basic details; you just need to verify they are correct.
2. Read and Agree to Agreements: You will see a “Stock Connect Business Risk Disclosure Statement” and related agreements. Please read them carefully to understand the Hong Kong market’s trading rules and potential risks, then check the agreement box.
3. Submit Activation Request: After completing the above, you can submit the application. The broker will handle the subsequent account linkage with the exchange on your behalf.

Next, you need to complete a “Stock Connect Knowledge Assessment.” This questionnaire ensures you have a basic understanding of Hong Kong stock investing characteristics. Questions typically cover basics like trading hours, T+0 system, and no price limits.

Per regulatory requirements, the minimum passing score is 70 points, though some brokers may require 80 points or higher to pass. Don’t worry—the broker usually provides study materials beforehand, and if you fail the first time, multiple attempts are generally allowed.

Wait for Review and Confirmation of Activation

After successfully submitting the application and knowledge assessment, all that’s left is to wait. Your application will enter the review stage.

This process typically takes 1-2 business days. Your broker will first conduct an initial review, then submit your information to the Shanghai or Shenzhen Stock Exchange for filing. The entire workflow is automated, requiring no additional action from you.

Once approved, your broker will formally notify you via SMS or app push: “Dear customer, your Stock Connect trading permission has been successfully activated.” Receiving this message means you’ve successfully unlocked the new map for Hong Kong stock investing and can prepare to buy stocks like Tencent Holdings (00700) at any time.

Buying Tencent Stock: Practical Trading Guide

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Congratulations—your Stock Connect permission is now activated. You’re just one step away from holding Tencent stock. The subsequent trading operations are very intuitive, though the fund flows and rules differ from A-shares. This guide will walk you through the entire process from fund preparation to successful order placement.

Fund Operations: Automatic RMB-to-HKD Conversion

One of the most convenient aspects of trading Hong Kong stocks via Stock Connect is that you don’t need to manually exchange HKD. The system handles everything automatically—you just need to ensure sufficient RMB in your cash account.

Core Mechanism: RMB Pricing, HKD Settlement When you place an order to buy Tencent stock, the trading software displays the price in HKD but freezes the corresponding RMB amount in your account. During clearing and settlement, China Securities Depository and Clearing Corporation Limited (ChinaClear) uniformly converts RMB to HKD and completes settlement with the Hong Kong clearing house.

Although automatic, this process involves some costs and fees you should understand:

• Exchange Rate Cost: Conversion references the real-time exchange rate, but there is usually a bid-ask spread, forming a hidden conversion cost.
• Trading Fees: Trading Hong Kong stocks incurs various fees. While commission policies vary by broker, the main fee components are similar.
  Here are some common fee types in Stock Connect trading; note that these are automatically deducted during transactions:

• Dividend Tax: If you hold Tencent long-term and receive dividends, mainland individual investors via Stock Connect must pay 20% personal income tax on dividends per regulations. This tax is withheld by ChinaClear at payout, so you receive the after-tax amount. For red-chip companies like Tencent registered in Hong Kong, the situation may be more complex, with effective dividend tax potentially reaching 28%.

Placing Orders: Search 00700 and Buy

With funds and fees understood, we can proceed to the actual buying operation. Since there is no Tencent A-share, you must use its official code on the Hong Kong Exchange.

1. Enter Stock Connect Trading In your broker app, locate and enter the “Stock Connect” or “Hong Kong Stocks” trading interface.
2. Search Stock Code In the search box, enter Tencent Holdings’ stock code: 00700. Make sure to use this code—it is the unique identifier on the Hong Kong Stock Exchange.
3. Enter Order Details You will see Tencent Holdings’ real-time quotes. Next, input the buy price and quantity. Here’s a key point to note:

   Trading Unit: Lot-Based Buying Hong Kong stocks use the concept of “lots,” where one lot equals a fixed number of shares. For Tencent Holdings (00700), one lot equals 100 shares. Your order quantity must be a multiple of 100, such as 100, 200, or 1,000 shares.

4. Confirm and Submit After checking the price and quantity, click “Buy” and confirm the order. Once the order executes on the market, you have successfully purchased Tencent Holdings shares.

Trading Rules: T+0 and No Price Limits

The Hong Kong stock market’s trading rules differ significantly from mainland A-shares. Familiarizing yourself with these can help you better manage risks. This is completely different from any Tencent A-share trading rules you might know.

• T+0 Trading System Hong Kong uses T+0 trading, meaning you can sell shares bought on the same day. This offers greater flexibility but may increase short-term trading risks. In contrast, A-shares use T+1, where shares bought today cannot be sold until the next trading day.
• No Daily Price Limits This is one of the biggest features of the Hong Kong market. Unlike A-shares with 10% daily limits, Hong Kong stocks theoretically have no single-day price movement restrictions.

  Risk Warning No price limits mean share prices can fluctuate dramatically in one day. A stock could rise 50% or fall 50% in a single session. While enjoying potential high returns, you must also face the corresponding substantial risks.

• T+2 Settlement Although T+0 trading is allowed, actual share and fund settlement occurs on the second business day after the trade (T+2). This has little impact on ordinary investors, as your broker system handles it automatically, and funds from a T+0 sale can be immediately reused for other purchases.

Now you’ve mastered the complete path to investing in Tencent via Stock Connect. The entire process can be summarized in three core steps:

1. Check Threshold: Confirm your securities account assets average at least 500,000 RMB daily over 20 consecutive trading days.
2. Activate Online: Log into your broker app, complete the knowledge assessment, and submit the Stock Connect permission application.
3. Buy Directly: After activation, use RMB to search code 00700 and place orders.

Stock Connect provides a compliant and convenient official channel, solving the issue of no Tencent A-share. However, remember to follow the rules of both markets and watch for potential trading restrictions. If you meet the conditions, you can follow this guide to easily start your Hong Kong stock investment journey.

FAQ

What happens if my assets fall below 500,000 RMB after Stock Connect activation?

You don’t need to worry. Even if assets temporarily drop below 500,000 RMB after activation, your Stock Connect eligibility won’t be revoked. You can still sell existing Hong Kong holdings, but buying new ones will be restricted until assets recover.

Can I trade all Hong Kong stocks?

You cannot trade all Hong Kong stocks. You are limited to specific stocks included in the “Stock Connect” eligible list, which is periodically updated by the exchanges. You can view the full eligible stock list in your broker app.

What if the two markets have different holidays?

Stock Connect is only open on days when both mainland China and Hong Kong markets are trading. If either market is closed for a holiday, you cannot trade via Stock Connect that day. Please check the exchange-published trading calendars in advance.

Can I participate in Hong Kong IPOs via Stock Connect?

Currently, you cannot participate in Hong Kong initial public offerings (IPOs), or “new share subscriptions,” via Stock Connect. Stock Connect is mainly for secondary market stock trading.