Samsung Electronics Union in South Korea Announces Strike Starting Tomorrow! Domestic Chips Defy Market Downturn, Largest HK Connect Information Technology ETF Huabao (159131) Surges 3% on Heavy Volume

On the afternoon of May 20, the Hong Kong stock chip industry chain saw a strong rally, with SMIC and Hua Hong Semiconductor both surging over 10%. The largest and most liquid* HK Connect Information Technology ETF Huabao (159131) trended upward throughout the day, closing up 3% on heavy volume, with a single-day turnover of 973 million yuan! The ETF showed significant premium throughout the day, with real-time fund subscriptions reaching 8 million units.

On the news front, Samsung Electronics' union, having failed to reach an agreement with management on bonus distribution, plans to launch an 18-day large-scale strike starting May 21, 2026. This would be the largest strike in the company's history and could significantly impact the global memory chip supply chain. Ping An Securities pointed out that SMIC and Hua Hong Company released their Q1 2026 results, showing a thriving foundry business. According to a SEMI report, global semiconductor material market sales in 2025 grew 6.8% year-over-year to reach $73.2 billion. Both wafer fabrication materials and packaging materials segments saw growth, reflecting higher process complexity, demand for advanced nodes, and continued investment in high-performance computing and high-bandwidth memory manufacturing. Domestically, wafer capacity supply, including for logic and memory, remains tight, with significant potential for fab expansion. Simultaneously, fab expansion will drive sustained positive demand for equipment and materials. Once wafer foundry capacity bottlenecks ease, it will greatly stimulate the market potential for domestic AI computing chips and storage chips in China. Since rebounding from its low on March 31, the underlying index of the HK Connect Information Technology ETF Huabao (159131)—the CSI HK Connect Information Technology Composite Index—has accumulated a gain of 26.32%. In the same period, the gains for the Hang Seng Tech Index and the HK Connect Tech Index were 3.92% and 1.91% respectively, highlighting the former's significantly sharper rally and greater elasticity.

Statistical period: March 31, 2026 - May 20, 2026. 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% respectively. Past index performance is not indicative of future results. Supports T+0 trading! Targeting the Hong Kong stock chip super cycle—the first of its kind in the market, the largest and most liquid HK Connect Information Technology ETF Huabao (159131). Its offshore feeder fund code is 026755. The underlying index is composed of "70% hardware + 30% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software," covering 52 Hong Kong-listed hard-tech companies. Among them, SMIC has a weight of 14.21%, Xiaomi Group-W has a weight of 10.31%, Lenovo Group has a weight of 9.33%, and Hua Hong Semiconductor has a weight of 8.82%. The index excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher sharpness and making it easier to capture the Hong Kong AI hard-tech trend. (As of May 5, 2026)

Data source: CSI Index Company, Shanghai and Shenzhen Stock Exchanges. Note: "First in the market" refers to the HK Connect Information Technology ETF Huabao being the first ETF in the market to track the CSI HK Connect Information Technology Composite Index. As of May 19, 2026, the latest on-exchange size of the HK Connect Information Technology ETF Huabao is 775 million yuan, making it the largest among the 7 ETFs currently tracking the CSI HK Connect Information Technology Composite Index. The average daily turnover for the HK Connect Information Technology ETF Huabao year-to-date is 166 million yuan. The annual historical returns for 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% respectively. Past index performance is not indicative of future results. Fund fee explanation: Subscription and redemption agents for the HK 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. *Institutional view reference source: Ping An Securities "Foundry Business Thriving, Focus on Opportunities in the Domestic Substitution Industry Chain." Risk Disclosure: The HK Connect Information Technology ETF Huabao 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 it was launched on June 23, 2017. The index constituents mentioned in the materials 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 manager. This product is issued and managed by Huabao Fund. Distributors do not bear responsibility for the investment, redemption, or risk management of the product. 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 a product suitable for their own risk tolerance. Past fund performance is not indicative of 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直销机构 and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by distributors and base their decisions on the matching results. Appropriateness opinions from different distributors may not necessarily一致, and 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 carefully 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 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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