Global semiconductor and chip industry sentiment has surged recently, bringing "hard tech" into the market spotlight. Within the Hong Kong tech sector, the CSI HK Connect Information Technology Index, representing Hong Kong's hard tech, has rallied over 30% since hitting a low on March 31, significantly outperforming the Hang Seng Tech Index (8.88%) and the HK Connect Tech Index (8.07%) over the same period. Its sharpness and resilience are notably leading, earning it the market moniker "Enhanced Hang Seng Tech."
Statistical period: 2026.3.31-2026.5.11. The annual historical returns for the HK Connect Information C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30%. Past index performance does not indicate future results. Concurrently, the resilient advantages of Hong Kong's hard tech continue to attract capital inflows. The market's first, largest, and most liquid* HK Connect Information Technology ETF, Hua Bao (159131), saw total net inflows exceeding 118 million yuan over the past 5 days and over 230 million yuan in the past 10 days.
Why is hard tech, with semiconductors at its core, receiving such strong market favor? On the news front, on May 11, the Shanghai Stock Exchange announced that SMIC's share issuance for asset acquisition met restructuring conditions and information disclosure requirements, successfully passing the review. According to the plan, SMIC intends to issue shares at a price of 40.6 billion yuan to the National Integrated Circuit Industry Investment Fund, the Integrated Circuit Investment Center, Yizhuang State-owned Investment, Zhongguancun Development, and Beijing Industrial Investment to acquire their combined 49.00% stake in SMIC North. Upon completion, SMIC will wholly own SMIC North, further consolidating mature process capacity. From an industry logic perspective, wafer foundry is a typical capital-intensive and technology-intensive sector, where economies of scale and capacity utilization directly determine profitability. Industry analysts note that this merger will not only optimize the group's governance structure but also accelerate the adoption process of domestic semiconductor equipment, supporting the scaled development of mature processes. Datong Securities analysis points out that currently, the AI computing hardware supply chain is generally achieving high growth, with significant gross margin improvements in segments like memory chip modules and niche memory. Semiconductor equipment is benefiting from wafer fab expansion and domestic substitution, leading to accelerated profit release. Overseas large model manufacturers continue to increase AI capital expenditures, and domestic policies explicitly support "AI+" and computing-power coordination, driving sustained growth in computing demand. Signals such as CPU shortages, memory price increases, and PCB full-capacity production indicate the continued prosperity of the AI hardware sector. Central China Securities analysis indicates that in Q1 2026, the capital expenditures of the four major North American cloud providers—Google, Microsoft, Meta, and Amazon—increased by 81% year-on-year and 10% quarter-on-quarter, with upward revisions to their 2026 capital expenditure plans. In Q4 2025, capacity utilization rates at SMIC, Hua Hong, and UMC remained largely flat quarter-on-quarter, with Hua Hong operating at full capacity. According to SEAJ data, global semiconductor equipment sales grew 8% year-on-year in Q4 2025, while China's semiconductor equipment sales grew 11% year-on-year. The semiconductor industry remains in an upward cycle, with AI being a key driver of growth. Looking ahead, Datong Securities believes that the AI computing and memory industry's prosperity continues to rise, with high-end products like HBM, high-capacity DRAM, and 3D NAND becoming focal points for capacity expansion. While industry competition intensifies, overall strong demand supports continued supply chain expansion. T+0 trading supported! Targeting the Hong Kong chip super-cycle—the market's first, largest, and most liquid HK Connect Information Technology ETF, Hua Bao (159131), with its feeder fund code 026755. The underlying index is composed of "70% hardware + 30% software," heavily weighted in Hong Kong's "semiconductors + electronics + computer software," covering 52 Hong Kong hard tech companies. Among these, SMIC holds a weight of 14.21%, Xiaomi Corporation-W 10.31%, Lenovo Group 9.33%, and Hua Hong Semiconductor 8.82%. It excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher sharpness and easier capture of Hong Kong's AI hard tech trends. (As of 2026.5.5)
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges. Note: "Market's first" refers to the HK Connect Information Technology ETF Hua Bao being the first ETF in the market to track the CSI HK Connect Information Technology Composite Index. As of 2026.5.11, the latest on-exchange size of the HK Connect Information Technology ETF Hua Bao was 828 million yuan, making it the largest among the 7 ETFs currently tracking the CSI HK Connect Information Technology Composite Index; its year-to-date average daily turnover is 166 million yuan. The annual historical returns of the underlying index, the CSI HK Connect Information Technology Composite Index (HKD), from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30%. Past index performance does not indicate future results. Fund fee description: Subscription and redemption agents for the HK Connect Information Technology ETF Hua Bao may charge a commission of up to 0.5%. On-exchange trading fees are subject to the actual charges by securities firms. No sales service fee is charged. *Institutional views reference sources: China Merchants Securities "China Merchants Securities Industry Sentiment Observation: Steady Growth in May Day Travel Consumption, March Global Semiconductor Sales Growth Expands." Central China Securities "Semiconductor Industry Monthly: Overseas Cloud Providers Raise 2026 Capex Plans, CPU Returns to AI Data Centers." Risk Disclosure: The HK Connect Information Technology ETF Hua Bao and its feeder fund passively track the CSI HK Connect Information Technology Composite Index, with a base date of November 14, 2014, and a release date of June 23, 2017. Index constituents in this material are for illustrative purposes only; descriptions of individual stocks do not constitute any form of investment advice nor represent the holdings or trading动向 of any fund managed by the management company. This product is issued and managed by Hua Bao Fund Management Co., Ltd. Selling agents do not assume responsibility for the product's investment, redemption, or risk management. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other fund legal documents to understand the fund's risk-return characteristics 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 involves risks! The fund manager assesses this fund's risk level as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Selling institutions (including the fund manager's direct sales机构 and other selling institutions) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by selling institutions and base their decisions on the matching results. Appropriateness opinions from different selling institutions may not necessarily be consistent, and the risk等级评价 results of fund products issued by fund selling institutions shall not be lower than the risk等级评价 results made by the fund manager. There may be differences between the fund's risk-return characteristics described in the fund contract and its risk等级 due to different consideration factors. Investors should understand the fund's risk-return situation,结合 their own investment objectives, horizon, experience, and risk tolerance to prudently select fund products and bear the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate its substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks; investment requires caution.
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