During early trading on June 5, Hong Kong-listed chip and semiconductor stocks led the market lower. The largest and most liquid* Hong Kong Connect Information Technology ETF, Huabao (159131), saw its on-exchange price fall by 2.18%, with real-time turnover reaching 5.61 billion yuan.
On the news front, major South Korean chipmakers faced heavy selling pressure. SK Hynix Inc plummeted over 9%, while Samsung Electronics Co Ltd dropped more than 7%. The US chip sector also experienced a collective slump overnight, with Broadcom Inc crashing over 12%. It is reported that the US AI giant Anthropic issued a sudden warning, stating that AI systems are advancing at such a rapid pace that they may soon be capable of self-improvement without human intervention, posing a significant risk to society. The company has called on the world's top AI labs to consider slowing the pace of development.
On June 2, the World Semiconductor Trade Statistics (WSTS) organization released its "WSTS Semiconductor Market Forecast Report." The report significantly raised its outlook for the global semiconductor market. It forecasts that the global semiconductor market will surge nearly 90% year-on-year in 2026, reaching a record $1.511 trillion, marking the largest annual increase in history. It is projected to grow a further 26.6% in 2027, rising to $1.914 trillion.
Financial Analysis Perspective on the Sector
From a deeper perspective, the current rise in the semiconductor sector is supported by three main pillars. First, a new semiconductor super-cycle driven by AI capital expenditure has been established. Second, the logic of domestic substitution is transitioning from "expectation" to "realization." Third, the earnings elasticity of the price increase cycle is being unleashed. In the current market, whether viewed from daily or monthly data, the trading volume share of tech stocks, represented by semiconductors, has reached historical extremes. This extreme market style has also led to increased stock price volatility. While this semiconductor rally is underpinned by solid industrial logic, signals such as overly rapid short-term gains, quick valuation expansion, and increasing major shareholder sell-offs should not be ignored. Under a strategy of "following the trend and focusing on leaders," it may be even more important to pay attention to timing and risk control.
Has the Hong Kong Tech Rally Stalled?
An analysis suggests that from a major cycle perspective, Hong Kong stocks have moved out of the low valuation recovery phase seen since last year and have formally entered the middle-to-late stage of a bull market. This stage will no longer be a broad-based index rally but a structural uptrend driven jointly by earnings, industry sentiment, and industrial realization. Liquidity and valuation recovery have already been largely priced in; the core variable determining excess returns going forward will shift to earnings verification.
Looking at the performance over the past six months, the underlying index of the Hong Kong Connect Information Technology ETF Huabao (159131), which focuses on Hong Kong's hard tech sector—the CSI Hong Kong Connect Information Technology Composite Index—has accumulated gains of over 25%. This significantly outperforms the Hang Seng Tech Index by 35%, the Hong Kong Connect Tech Index by 34%, and the Hong Kong Connect Internet Index by over 50%, demonstrating notably superior sharpness and elasticity.
Statistical period: November 4, 2025, to June 4, 2026. The annual historical returns of the Hong Kong Connect Information C Index for 2021-2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past index performance does not indicate future results.
Key Features of the Highlighted Fund
It supports T+0 trading! Focusing on Hong Kong hard tech, the Hong Kong Connect Information Technology ETF Huabao (159131) is the first of its kind in the market, as well as the largest and most liquid in its category. Its off-exchange feeder fund code is 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software." It covers 52 Hong Kong-listed hard tech companies, with the top holding, Lenovo Group Ltd, having a weight of 16.10%. This is currently the index with the highest Lenovo concentration among all indices with linked products in the market. The index constituents do not include large-cap internet companies such as Alibaba Group Holding Ltd, Tencent Holdings Ltd, or Meituan, giving it higher sharpness and making it more adept at capturing the Hong Kong AI hard tech trend. (Data as of May 29, 2026)
Data sources: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Hong Kong Connect Information Technology ETF Huabao being the first ETF in the market to track the CSI Hong Kong Connect Information Technology Composite Index. As of May 29, 2026, the latest on-exchange size of the Hong Kong Connect Information Technology ETF Huabao is 13.46 billion yuan, making it the largest among the 8 ETFs currently tracking the CSI Hong Kong Connect Information Technology Composite Index. Its average daily turnover year-to-date is 3.72 billion yuan. The annual historical returns of the underlying index, the CSI Hong Kong Connect Information Technology Composite Index (HKD), for 2021-2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past index performance does not indicate future results.
Important Fund Information and Risk Disclosures
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.
Market views are derived from relevant financial research.
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 launched 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 and do not represent the holdings or trading动向 of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributing institutions do not bear responsibility for the investment 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 select a product 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等级 as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributing institutions (including the fund manager's直销机构 and other distributors) assess the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by distributing institutions and base their decisions on the matching results. Appropriateness opinions from different distributing institutions may not necessarily be consistent, and the fund product risk等级 evaluation results issued by fund distributors 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 considerations. Investors should understand the fund's risk-return profile and,结合自身 investment objectives, time horizon, experience, and risk承受能力,谨慎 select fund products and bear 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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