Hong Kong's three major stock indices experienced a broad decline today, with the Hang Seng Tech Index falling nearly 3%. However, driven by positive catalysts both domestically and internationally, the AI computing hardware industry chain saw another significant surge. The CPO (Co-Packaged Optics) concept bucked the overall market downtrend, propelling both Science and Technology Innovation Growth and Communication ETFs higher.
At the close, the Hang Seng Index was down 1.56% at 25,633.21 points, with a full-day turnover of HK$322.921 billion. The Hang Seng Tech Index fell 2.74% to 5,056.97 points. Among major Hong Kong-listed ETFs by size, the Tracker Fund (02800) closed down 1.44% at HK$25.94. The CSOP Hang Seng Tech Index Daily (2x) Leveraged Product (07709) rose 5.14% to HK$146.2, while the CSOP Hang Seng TECH Index ETF (03033) fell 2.85% to HK$4.95.
Market Sector Performance
The AI computing hardware industry chain experienced a renewed surge, with Science and Technology Innovation Growth and Communication ETFs leading gains across the market. At the close, the E Fund Science and Technology Innovation Growth ETF (588020) was up 5.20% at 2.831 yuan. The GF Science and Technology Innovation Growth ETF (588110) gained 4.99% to 2.757 yuan. The Guotai Communication ETF (515880) rose 4.95% to 1.716 yuan, and the Fullgoal Communication ETF (159583) increased by 4.88% to 2.019 yuan.
On the news front, the world's first ultra-low-loss multi-core optical cable line supporting S+C+L three bands, independently designed by China Mobile and its industry partners, was officially completed and launched in Qingdao, Shandong. This breakthrough overcomes traditional optical fiber transmission capacity limits and marks a new commercial stage for China's space-division multiplexing fiber and multi-band fusion technology. This development catalyzed continued gains for CPO concept stocks and a collective strengthening of the semiconductor sector.
Analysis from Guosheng Securities suggests that as we move into June, order guidance and capacity planning signals from overseas CSPs (Cloud Service Providers) and core chip manufacturers are being released intensively. This will gradually clarify the full-year 2027 demand trajectory and earnings outlook, with overall industry sentiment continuing its upward trend. Concurrently, supply constraints for core upstream materials like optical chips are gradually easing. The earnings of leading optical module companies, previously constrained by supply, are expected to accelerate. Leading manufacturers with strong supply chain control and large order volumes are poised to demonstrate the most significant capacity flexibility and earnings realization capability.
Overseas, on June 2nd, NVIDIA announced that its NVIDIA Spectrum-X Ethernet Silicon Photonics technology is now in full production. The new-generation Spectrum-X switches are built on Co-Packaged Optics (CPO) technology, supporting the deployment of AI factories across data centers and regions for the NVIDIA Vera Rubin platform. Compared to networks using traditional transceivers, Spectrum-X Ethernet Silicon Photonics technology can achieve 5x greater energy efficiency, 5x improved AI uptime, and deployment times that are 1.3x faster.
Wanlian Securities noted that with the full deployment of CPO in NVIDIA's Spectrum-X switches and a surge in custom XPU orders from Marvell, the market size for ELSFP modules is expected to exceed $100 million by 2026 and surpass $1.5 billion by 2030. Cignal AI predicts that global annual CPO port deployments will exceed 30 million by 2030.
Institutional Perspectives
Everbright Securities' view is that while the overall market declined in May, market differentiation was significantly more pronounced than volatility. At the index level, science and technology innovation indices were notably stronger. At the sector level, communications and electronics led market gains. Furthermore, there has been significant divergence in individual stock performance since the start of the year, influenced by both fundamental divergence and differential capital flows. Looking ahead to June, the market still has room for upside, with fundamentals remaining the most robust underlying support. The market in June is expected to lean towards a scenario of "weak reality, strong sentiment," corresponding to a growth-oriented market style.
ETF Developments
The China Southern SSE Composite Index ETF (510910) made its debut today, closing up 0.20% at 0.999 yuan with a turnover of 66.9666 million yuan. The fund closely tracks the SSE Composite Index (a broad-based index for the entire Shanghai market), covering all listed companies on the Shanghai Main Board and STAR Market. This includes leading companies across sectors such as finance, energy, consumer goods, advanced manufacturing, and TMT, making it a broad-based ETF product for a one-stop investment in the Shanghai large-cap market.
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