The Tencent Holdings Ltd. building stands in the Nanshan district in Shenzhen, China. (PHOTO / BLOOMBERG)

One of Hong Kong’s biggest stocks and its benchmark index are telling two different stories. While Tencent Holdings Ltd. rallied to a fresh record high this week, the Hang Seng Index remained sluggish.

The correlation between the Hang Seng Index and one of its heaviest-weighted stocks is approaching a five-year low, underscoring the contrast between the tech giant’s 6 percent rally this year and the benchmark’s disappointing 13 percent plunge.

Massive southbound inflows and the potential revaluation of fintech businesses as investors await Ant Group Co.’s listing spurred a rally in Tencent this week through Thursday

Massive southbound inflows and the potential revaluation of fintech businesses as investors await Ant Group Co.’s listing spurred a rally in Tencent this week through Thursday. Its shares gained nearly 8 percent in the period, surpassing HK$600 and adding US$53 billion to the company’s market value -- more than eight times the value of fellow index member AAC Technologies Holdings Inc. Tencent fluctuated between gains and losses in early Friday trade.

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Mainland investors have piled into Tencent ahead of the scheduled Nov 12 release of third-quarter results. Its Hong Kong shares have recorded net southbound buying for three consecutive days this week, with inflows topping HK$11 billion, according to exchange data. Tencent is expected to report a 46 percent increase in net income, up from 37 percent in the previous quarter, according to consensus estimates on Bloomberg.

Brokerages believe Ant Group’s raised valuation at US$315 billion has boosted Tencent’s recent performance. As two major competitors in China’s mobile payment market, Ant’s listing is likely to trigger a revaluation of WeChat Pay, Tencent’s flagship mobile payment platform.

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Tencent is “more profitable in payments than Ant” and is “strategically more comfortable” in ramping up its payment operations, Macquarie analyst Han Joon Kim wrote in a note dated Tuesday. WeChat Pay could be worth as much as US$346 billion by 2022, said Kim, who boosted Tencent’s stock target to HK$815, the most bullish among all analyst ratings tracked by Bloomberg.