One of the boats was carrying more than 120 people to a fireworks display when it collided with a ferry, causing the first boat to start to sink.
There were 28 people pronounced dead at the scene, and 100 more were taken to hospital, eight of whom later passed away.
One survivor told The South China Morning Post: “After 10 minutes out, a boat crashed into ours from the side at very high speed. The rear… started to sink. I suddenly found myself deep under the sea. I swam hard and tried to grab a life buoy. I don’t know where my two kids are.”
The fire department have not ruled out the possibility that there are still people trapped inside the boat and rescue work is continuing with a large-scale air and sea search for survivors.
The collision was during one of Hong Kong’s busiest period for travelling, coming at the end of a long holiday weekend to mark the mid-autumn festival that this year, coinciding with China’s National Day on 1 October.
Witnesses said the boat went under very fast, and one passenger said the ship had sunk in under ten minutes.
Another passenger said: “I was on the top deck of the ferry and felt the impact – it threw people off of their seats. The sound the collision made was horrific. As my ferry docked in Lamma, it was clear everyone was in shock and desperately concerned for the ship left behind.”
The crash occurred on Monday evening, when low visibility and the many obstacles on the vessel made it difficult for people to escape the damaged ship.