SHANGHAI/HONG KONG, Dec 24 (Reuters) - Hong Kong is on track to become the world"s worst-performing major stock market this year amid its poorest performance in a decade following China"s regulatory crackdowns on tech firms, but investors are raising bets that the sell-off is overdone. Beijing"s tightening regulations in sectors ranging from property to gaming, including Evergrande Group"s (3333.HK) debt woes that raised concerns about possible defaults, had also hit banks, insurers and other companies listed in the financial hub. But there are signs of a turnaround. "From a valuation perspective, it"s a good buying opportunity," said Zhu Haifeng, an individual investor who has been boosting exposure to Hong Kong"s Internet stocks via exchange-traded funds (ETFs). Despite short-term volatility, "I"m very optimistic toward Chinese Internet firms such as Alibaba, Tencent and Meituan over the long term," he said. More than a billion dollars worth of funds from the China mainland gushed into ETFs targeting Hong Kong stocks over the past month, while Chinese money flows into the city"s bourse via Stock Connect hit a six-month high in December, exchange data shows. In addition, there was a burst of share buy-backs from Hong Kong-listed companies including Xiaomi Corp (1810.HK) and WuXi Biologics (2269.HK) during the month. The benchmark Hang Seng Index (.HSI) has slumped nearly 15% so far in 2021, and the Hang Seng Tech Index has tumbled 33%. In contrast, the Shanghai Composite Index (.SSEC) is up roughly 4%. Offshore Chinese stocks far underperformed mainland A-shares under the double whammy of Hong Kong"s shrinking liquidity and Beijing"s hawkish regulation against Internet giants - most of which are listed overseas, wrote Hong Hao, head of research at BOCOM International. But he said the Hang Seng is "showing deep allocation value," and such divergence between offshore and onshore Chinese market is unlikely to last. Wan Chengshui, portfolio manager at Golden Eagle Fund Management Co, said he believed the rocky Sino-U.S. relationship had already hit a bottom. "I think the relationship between China and the United States will likely improve a bit next year, thus luring U.S. and European money back to the Hong Kong market, benefiting stocks." ChinaAMC Hang Seng Technology ETF (513180.SS) saw its assets under management (AUM) jump 55% over the past month to 5.5 billion yuan ($863.4 million), despite a decline in the underlying index. ChinaAMC Hang Seng Internet & IT ETF (513330.SS) witnessed a 30% jump in its AUM to 18 billion yuan. Net flows into Hong Kong stocks under Stock Connect exceeded $10 billion in December. Companies are buying shares too. According to China Industrial Securities, 185 Hong Kong-listed companies, including Xiaomi Corp (1810.HK) have spent HK$33.51 billion ($4.3 billion) buying their own shares this year, pushing the value of share buybacks to a record high. "This is certainly positive. It shows insiders have conviction in the company"s value," said Mark Dong, co-founder of Chinese hedge fund house Minority Asset Management, which holds Hong Kong-listed banks and developers. Many blue chips offer dividend yield of 7-8%, making them "more rewarding than high-yield bonds." ($1 = 6.3699 Chinese yuan)