Chip and semiconductor stocks in the A-share and Hong Kong markets showed signs of recovery this afternoon (July 3rd). In Hong Kong's hard tech sector, Ubtech Robotics and Fan Shi Intelligence both surged 12%, while Zhipu AI, Wolong Electric Group, and Shanghai Fudan Microelectronics rose over 8%. The largest and most liquid* Hong Kong-Connect Information Technology ETF, Huabao (159131), saw its on-exchange price spike up to 2.6% intraday, currently trading 1.54% higher with real-time turnover exceeding 1.9 billion yuan.
On the news front, reports indicate that South Korea is considering utilizing approximately 5 trillion won in incremental tax revenue generated from the semiconductor boom to fund the independent development of artificial intelligence (AI) models. It is reported that South Korea's Ministry of Science and ICT is discussing using this incremental tax to purchase around 10,000 Nvidia Vera Rubin GPU modules and recruit AI talent.
Based on statistics from the capital expenditures of 31 global semiconductor manufacturing companies and growth expectations of 25 semiconductor equipment firms, a research report from Huatai Securities forecasts: 1) Global semiconductor manufacturing capital expenditure is expected to reach $341.7 billion by 2028, a significant 103.3% increase (doubling) from $168.1 billion in 2025. This substantial upward revision in capital expenditure directly translates to the equipment sector. 2) The global front-end semiconductor equipment (WFE) market is projected to reach $241.4 billion by 2028, growing approximately 108% from 2025. 3) The global back-end semiconductor equipment market is estimated to be around $38.3 billion by 2028, a sharp 136.9% increase from $16.16 billion in 2025. Ranked by downstream demand, memory (+150%) > foundry (91.4%). Following inventory adjustments in 2025/2026, the Chinese market is expected to resume strong growth in 2027.
Huatai Securities further pointed out that memory capital expenditure by 2028 is projected to surge 150.1% (increasing 2.5 times) from $77.46 billion in 2025, with its share of total capital expenditure also jumping significantly from 46.1% in 2025 to 56.7%, becoming the core driving force behind the upward revision of this cycle.
Performance of Key Indices
Looking at the performance over the past six months, a stark contrast has emerged within the Hong Kong tech sector: the underlying index for the Hong Kong-Connect Information Technology ETF Huabao (159131), which focuses on Hong Kong hard tech—the CSI Hong Kong Connect Information Technology Composite Index (HK Connect Info C)—has gained 30.85% cumulatively. This outperformed the Hang Seng Tech Index by 50%, the Hong Kong Connect Technology Index by 45%, and the Hong Kong Connect Internet Index by over 65%. Extending the view to nearly three years, the HK Connect Info C Index has accumulated gains exceeding 126%, outperforming the Hang Seng Tech Index by over 117%.
Statistical period: Dec 30, 2025 - Jun 30, 2026. The annual historical returns for the HK Connect Info C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30% respectively. Past index performance is not indicative of future results.
ETF Overview and Features
A rare "pure-play" hard tech option for Hong Kong stocks! Supports T+0 trading! The first and largest, most liquid Hong Kong-Connect Information Technology ETF in the market, Huabao (159131), with its off-exchange feeder fund code 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software." It covers 60 Hong Kong hard tech companies. The combined weight of the two major foundry giants, SMIC and Huahong Grace, exceeds 26%. The domestic AI PC leader, Lenovo Group, has a weight over 10%. The combined weight of the PCB leaders, Kingboard Holdings and Kingboard Laminates, exceeds 11%. These three represent the highest concentration among all market indices with linked products. Furthermore, the index recently included several new Hong Kong hard tech entrants on June 15th, such as Zhipu AI, Biren Technology, and Shenghong Tech. The constituent stocks do not include large-cap internet companies like Alibaba, Tencent, or Meituan, offering higher focus and making it easier to capture the Hong Kong AI hard tech trend.
Data source: CSI Indexes, as of June 24, 2026. Image generated by AI.
Note: "First in the market" refers to the Hong Kong-Connect Information Technology ETF Huabao being the first ETF to track the CSI Hong Kong Connect Information Technology Composite Index. As of June 26, 2026, the latest on-exchange scale of the Hong Kong-Connect Information Technology ETF Huabao was 1.887 billion yuan, the largest among the 8 ETFs tracking the same index. The ETF's average daily turnover year-to-date is 659 million yuan. The annual historical returns for the underlying index, the CSI Hong Kong Connect Information Technology Composite Index (HKD), from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30% respectively. Past index performance is not indicative of future results.
Fee Structure and Risk Disclosure
Fund fee information: Subscription and redemption agents for the Hong Kong-Connect Information Technology ETF Huabao 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.
Reference for institutional view: Huatai Securities report "Global Semiconductor Equipment: 2028 Market Size Expected to Double Compared to 2025".
Risk warning: The Hong Kong-Connect Information Technology ETF Huabao and its feeder fund passively track the CSI Hong Kong Connect Information Technology Composite Index. The base date for this index is November 14, 2014, and it was released on June 23, 2017. The index constituents mentioned in the material are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 of any fund managed by the asset manager. This product is issued and managed by Huabao Fund. Distribution agents do not assume responsibility for the investment or redemption of the product. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other fund legal documents to understand the fund's risk-return characteristics and choose a product suitable for their own risk tolerance. Past fund performance is not indicative of 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. Sales institutions (including the fund manager's direct sales channels and other sales institutions) evaluate the fund's risk 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. Opinions on appropriateness from various sales institutions may not necessarily be consistent, and the fund product risk等级 evaluation results issued by fund sales institutions shall not be lower than the risk等级 evaluation 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 consideration factors. Investors should understand the fund's risk-return profile and choose fund products cautiously based on their own investment objectives, horizon, experience, and risk承受能力, 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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