Hong Kong's technology sector displayed divergent performance on June 3rd. While the Hang Seng Tech Index fell by 1.5%, the HK Connect Information Technology C Index, which focuses on hard tech, climbed over 1%. The largest and most liquid* ETF tracking this segment, the Huabao HK Connect Information Technology ETF (159131), surged 1.71%, with its intraday price hitting a new record high since listing. Real-time turnover exceeded 6 billion yuan.
Analyst Perspectives on Market Dynamics
Analysts point out that short-term opportunities in the Hong Kong market are likely to remain structural. Southbound capital flows continue to concentrate on information technology and select consumer leaders, reflecting a persistent preference for allocating funds towards tech growth and high-prosperity sectors. From a valuation standpoint, while the equity risk premium for the Hang Seng Index has slightly declined from last week, it still offers attractive allocation value. The price-to-earnings ratios for sectors like information technology remain at relatively low historical percentiles, indicating room for valuation recovery. For allocation, it is recommended to continue focusing on tech growth areas benefiting from AI capital expenditure expansion, sustained Southbound capital interest, and relatively low valuation percentiles, such as internet platforms, semiconductors, hardware equipment, and optical communications.
Other analysts also believe that a promising rally in Hong Kong stocks is anticipated, with positive catalysts continuing to accumulate. The current Hong Kong market simultaneously benefits from dual catalysts: "external resonance from tech diffusion" and "internal valuation rotation and repair."
Performance Comparison and Product Focus
Over the past six months, the CSI HK Connect Information Technology Composite Index, which the Huabao ETF (159131) tracks, has gained over 25%. In contrast, the Hang Seng Tech Index and the HK Connect Tech Index returned -11.33% and -6.98% respectively over the same period, highlighting the former's sharper performance and greater elasticity.
Statistical period: December 2, 2025, to June 2, 2026. The annual historical returns for the HK Connect Information Technology C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%. Past index performance does not indicate future results.
Supporting T+0 trading, the Huabao HK Connect Information Technology ETF (159131) is the market's 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 weighting Hong Kong stocks in "semiconductors + electronics + computer software." It covers 52 Hong Kong-listed hard tech companies. Its largest constituent, Lenovo Group, has a weight of 16.10%, making this the index with the highest Lenovo exposure among all indices with linked products in the market. The index components exclude large-cap internet companies like Alibaba, Tencent, and Meituan, resulting in a sharper focus and greater ease in capturing the Hong Kong AI hard tech rally.
(Data as of May 29, 2026)
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "The market's first" refers to the Huabao HK Connect Information Technology ETF being the first ETF to track the CSI HK Connect Information Technology Composite Index. As of May 29, 2026, the Huabao ETF's latest on-exchange size was 13.46 billion yuan, making it the largest among the eight ETFs currently tracking the CSI HK Connect Information Technology Composite Index. Its year-to-date average daily turnover is 3.72 billion yuan. The annual historical returns of the underlying CSI HK Connect Information Technology Composite Index (HKD) from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%. Past index performance does not indicate future results.
Fund Fee Note: Subscription and redemption agents for the Huabao HK Connect Information Technology ETF 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 View Sources: Dongwu Securities report "Focusing on the Window for Hong Kong Stock Catch-up Rally – Weekly Hong Kong Stock Views"; Guosen Securities report "Analysis of the Investment Value of HK Connect Information Technology: Preferred Hard Tech Picks in Hong Kong Under the AI Wave".
Risk Disclosure
The Huabao HK Connect Information Technology ETF and its feeder fund passively track the CSI HK Connect Information Technology Composite Index. The base date for this index is November 14, 2014, and its release date is June 23, 2017. The index constituents mentioned in the 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 manager. This product is issued and managed by Huabao Fund. Distributors do not bear responsibility for the investment performance or redemption of the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal fund documents to understand the fund's risk-return characteristics and choose a product suitable for their own risk tolerance. Past fund performance does not predict its 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等级 as R4 - Medium to 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 promptly pay attention to the suitability opinions provided by distributors and base their decisions on the matching results. Suitability opinions from different distributors may not necessarily be consistent. The fund product risk等级 evaluation results issued by fund distributors shall not be lower than the risk等级 evaluation result 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 choose fund products cautiously based on their own investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. 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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