The Hong Kong stock market saw a strong rally in hard technology stocks today (June 22nd). The largest and most liquid* ETF tracking Hong Kong Connect information technology stocks, Huabao (159131), surged over 3% in early trading before experiencing some volatility. It regained momentum in the afternoon session, ultimately closing up 2.63% and setting a new record high since its listing, with daily turnover reaching 2.354 billion yuan.
Among its constituent stocks, eight companies, including TianShu ZhiXin, Zhipu, Minglue Technology-W, and Kingboard Holdings, saw gains exceeding 10%. Semiconductor Manufacturing International Corporation (SMIC) rose over 3%.
Pacific Securities analysts noted that global tech giants are accelerating their AI capital expenditures, entering a new era of nearly trillion-dollar investments by 2026. The combined capital expenditures of the six largest tech giants are projected to exceed $350 billion in 2025 and surpass $800 billion in 2026. As large language models and related applications continue to penetrate the market, capital spending is expected to keep rising. The optical chip sector is entering a period of rapid growth, with three major players engaging in differentiated competition. HBM (High Bandwidth Memory) is experiencing explosive growth, and memory prices are forecast to continue rising. The HBM market is expected to maintain high double-digit growth through 2026, with current capacity from the three major manufacturers fully sold out. According to Gartner, DRAM prices are projected to rise 125% and NAND prices 234% by 2026, with supply shortages likely to persist for an extended period.
Cao Xuchen, the fund manager of the Huabao (159131) ETF, pointed out that the underlying CSI Hong Kong Connect Information Technology Composite Index recently added eight new constituents, including Zhipu, Shenghong Technology, TianShu ZhiXin, Biren Technology, Huaqin Technology, Minglue Technology, Haizhi Technology, and Health Road, with no deletions. As a comprehensive index, its number of constituents will continue to grow. The quality of the newly added stocks is very high, encompassing a leading large language model company (Zhipu), a core PCB leader, two GPU companies, and a server company. The index prioritizes the inclusion of new electronics and computer science companies listed through the Hong Kong Connect, and benefits from the wave of new AI and tech listings in Hong Kong, making it a broad-based choice for investing in Hong Kong's AI sector.
Over the past six months, the CSI Hong Kong Connect Information Technology Composite Index, tracked by the Huabao (159131) ETF, has accumulated gains of over 30%. This performance has outpaced the Hang Seng Tech Index by 45%, the Hang Seng Stock Connect Technology Index by 41%, and the Hang Seng Stock Connect Internet Index by over 58%, demonstrating significantly sharper and more elastic returns.
This ETF offers exposure to Hong Kong's rare "pure-play" hard technology sector and supports T+0 trading. As the first and largest ETF of its kind with the strongest liquidity, its feeder fund code is 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted towards Hong Kong-listed "semiconductors, electronics, and computer software." It covers 60 Hong Kong hard tech companies. The combined weighting of the two wafer fabrication giants, SMIC and Hua Hong Semiconductor, exceeds 21%. The domestic AI PC leader, Lenovo Group, holds a 15.89% weighting. The combined weighting of PCB leaders Kingboard Holdings and Kingboard Laminates exceeds 10%. These weightings are the highest among all indices with linked products in the market. Furthermore, the index recently added several new high-profile Hong Kong hard tech companies like Zhipu and Biren Technology. The index does not include large-cap internet companies like Alibaba, Tencent, or Meituan, giving it a sharper focus and making it more effective at capturing trends in Hong Kong's AI and hard technology sector.
*Note: "First of its kind" refers to this being the first ETF to track the CSI Hong Kong Connect Information Technology Composite Index. As of June 16, 2026, the on-exchange size of the Huabao (159131) ETF was 1.337 billion yuan, making it the largest among the eight ETFs tracking this index. Its year-to-date average daily turnover is 565 million yuan. The underlying index, the CSI Hong Kong Connect Information Technology Composite Index (HKD), had annual returns of -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% from 2021 to 2025. Past index performance does not indicate future results.
Fee Information: Subscription and redemption agents for the Huabao (159131) ETF may charge a commission of up to 0.5%. On-exchange trading fees are subject to the rates set by securities firms. No sales service fee is charged.
Risk Disclosure: The Huabao (159131) ETF and its feeder fund passively track the CSI Hong Kong Connect Information Technology Composite Index. The index base date is November 14, 2014, and it was launched on June 23, 2017. Constituent stocks mentioned in this material are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form and do not represent the holdings or trading intentions of any fund under the manager. This product is issued and managed by Huabao Fund. Distributing institutions do not assume investment or redemption liability for the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return profile and choose products suitable for their own risk tolerance. Past fund performance does not predict future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment carries risks. The fund manager assesses this fund's risk level as R4 (Medium-High Risk), suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's direct sales channels and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should pay attention to the suitability assessment opinions provided by distributors and base their decisions on the matching results. Suitability opinions may vary among distributors, and a distributor's risk rating for a fund product cannot be lower than the rating assigned by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different assessment factors. Investors should understand the fund's risk-return characteristics and choose fund products prudently based on their own investment objectives, horizon, experience, and risk tolerance, bearing the associated risks. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.
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