Hong Kong's hard technology sector staged a powerful recovery during the early trading session on June 24, following a sharp decline the previous day.
Shares of Hua Hong Semiconductor Ltd and Knowledge Atlas surged more than 10%, while Semiconductor Manufacturing International Corporation and GigaDevice Semiconductor Inc rose over 6%.
The largest and most liquid Hong Kong Connect Information Technology ETF, the Huabao ETF (159131), saw its on-exchange price climb rapidly, currently up 3.45% with a turnover of 5.6 billion yuan.
Notably, during yesterday's pullback, over 80 million yuan of capital decisively flowed into the fund.
Key Market Perspectives
Galaxy Securities noted that despite short-term pressure on the AI hardware supply chain, from a medium-term perspective, the AI computing power industrial chain, semiconductors, and internet platforms remain the most scarce and growth-oriented sectors in the Hong Kong market.
The firm suggests focusing on profitable and stable sub-sectors such as semiconductor equipment/materials, and AI platform applications and software.
Soochow Securities maintains that the AI technology theme remains the primary focus, while also paying attention to the diffusion pace towards midstream and downstream applications.
If the AI theme spreads from upstream hardware to infrastructure and application software, Hong Kong stocks have a high weighting in these related directions, potentially forming a synchronized trend with US and Chinese mainland stocks.
Simultaneously, in a high-volatility environment, assets with high dividends and stable cash flows should still be monitored to hedge against potential systemic disturbances.
Performance and Fund Details
Over the past six months, the underlying index of the Huabao Hong Kong Connect Information Technology ETF (159131), the CSI Hong Kong Connect Information Technology Composite Index, has gained over 24%.
This performance has outpaced the Hang Seng Tech Index by 40%, the Hong Kong Connect Technology Index by 41%, and the Hong Kong Connect Internet Index by over 58%, demonstrating significantly sharper and more elastic returns.
The Huabao Hong Kong Connect Information Technology ETF (159131) is a rare, "pure-play" hard tech fund for the Hong Kong market and supports T+0 trading.
It is the first and largest ETF of its kind tracking the CSI Hong Kong Connect Information Technology Composite Index, with an offshore feeder fund code of 026755.
The underlying index is composed of 80% hardware and 20% software companies, heavily weighted towards Hong Kong-listed "semiconductor + electronics + computer software" firms.
It covers 60 Hong Kong-listed hard tech companies, with the two major foundry giants, SMIC and Hua Hong Semiconductor, having a combined weighting exceeding 21%.
The domestic AI PC leader, Lenovo Group, holds a 15.89% weight, while the PCB leaders, Kingboard Holdings and Kingboard Laminates Holdings, have a combined weight over 10%.
These three segments represent the highest concentrations in any index with linked products across the market.
Furthermore, the index recently included several new Hong Kong-listed hard tech leaders like Knowledge Atlas and Biren Technology.
The index excludes large-cap internet enterprises such as Alibaba, Tencent, and Meituan, resulting in higher focus and a greater ability to capture trends in Hong Kong's AI hard tech sector.
Important Disclaimers
The Huabao Hong Kong Connect Information Technology ETF and its feeder fund passively track the CSI Hong Kong Connect Information Technology Composite Index.
Index historical performance is not indicative of future results.
The fund is managed and distributed by Huabao Fund, and selling agencies do not assume responsibility for the product's investment performance or redemption.
Investors should carefully read the fund's legal documents to understand its risk-return characteristics and choose a product suitable for their own risk tolerance.
Past fund performance does not predict future results, and the performance of other funds managed by the manager does not guarantee this fund's performance.
Fund investments involve risks.
The fund manager assesses this fund's risk level as R4 (medium-high risk), suitable for aggressive (C4) and above investors.
The China Securities Regulatory Commission's registration of this fund does not indicate a judgment or guarantee of its investment value, market prospects, or returns.
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