Technology stocks experienced another volatile session today (July 22). Hong Kong's hard tech sector turned lower in the afternoon. Hua Bao Hong Kong Stock Connect Information Technology ETF (159131), the largest and most liquid ETF of its kind, saw its early gains of over 1% reverse, closing down 2.63% for the day. The fund traded at a significant premium, with daily turnover reaching 33.83 billion yuan. Notably, following massive inflows of 200 million units yesterday, funds again bought over 300 million units on today's dip.
Among its constituents, 43 stocks fell while 16 rose and 1 was flat. Losses were led by the PCB and semiconductor sectors. Kingboard Laminates Holdings Ltd plunged more than 15%, Kingboard Holdings Ltd fell over 10%, and Minglue Technology -W dropped over 7%. GigaDevice Semiconductor Inc and Huahong Hongli both declined more than 4%, while Semiconductor Manufacturing International Corporation (SMIC) fell over 3%.
Analysts at Huatai Securities noted that despite resilient fundamentals, recent pullbacks in major global tech hardware indices have sparked discussions on whether the AI hardware capital expenditure cycle is nearing its peak. Reviewing historical cycles (2000, 2016-2018, and 2020-2022), they suggest: 1) The current AI computing demand is underpinned by strong growth in token consumption, which differs from the 2000 scenario. 2) The industry's primary driver is transitioning structurally from "price-driven" to "capacity expansion-driven," representing a redistribution of profits within the supply chain rather than a reversal of the overall industry logic. Considering fundamental visibility and risk-reward ratios, Huatai Securities recommends focusing on sectors with high earnings visibility (equipment) while also monitoring the recovery potential in end-markets.
Hua Bao Hong Kong Stock Connect Information Technology ETF (159131) offers a concentrated exposure to Hong Kong's scarce "pure" hard tech companies and supports T+0 trading. It is the first and largest ETF tracking the Hong Kong Stock Connect Information Technology Composite Index, with an offshore feeder fund code 026755. The underlying index is composed of "85% hardware + 15% software," heavily weighted towards Hong Kong-listed semiconductors, electronics, and computer software. It covers 60 hard tech firms. The combined weight of two major foundry giants, SMIC and Huahong Hongli, exceeds 26%. Domestic AI PC leader Lenovo Group has a weight over 10%, and PCB leaders Kingboard Holdings Ltd and Kingboard Laminates Holdings Ltd together have a combined weight over 11%. These are the highest concentrations among all indices with linked products in the market. Furthermore, the index added several new Hong Kong-listed hard tech companies like Zhipu AI, Shenghong Technology, Tianshu Zhixin, and Biren Technology on June 15. The index excludes large-cap internet firms such as Alibaba, Tencent, and Meituan, offering sharper focus and better capture of Hong Kong's AI hard tech trends.
Market volatility may be elevated recently. Short-term performance does not predict future results, and fund investments may incur losses. Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Hua Bao Hong Kong Stock Connect Information Technology ETF (159131) and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The index's base date is November 14, 2014, and it was launched on June 23, 2017. Constituent stocks mentioned are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form and do not represent the holdings or trading动向 of any fund managed by the asset manager. This product is issued and managed by Hua Bao Fund Management Co., Ltd. Distributing institutions do not bear responsibility for the product's investment or redemption. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. Past performance of the fund does not predict its future performance. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment involves risks! The fund manager assesses this fund's risk等级 as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Sales institutions (including the fund manager's direct sales channels and other distributors) conduct risk assessments of this fund according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by sales institutions and base their decisions on the matching results. Appropriateness opinions from different sales institutions may not be consistent. The fund product risk等级 assessment results issued by fund sales institutions shall not be lower than the risk等级 assessment results made by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk等级 may differ due to different considerations. Investors should understand the fund's risk-return profile and make careful choices based on their investment objectives, horizon, experience, and risk承受能力, bearing their own 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.
Comments