On August 17th, A-share and Hong Kong-listed chip and semiconductor stocks rallied in tandem, with the Hong Kong chip supply chain showing notable strength. The Hua Bao Hong Kong Stock Connect Information Technology ETF (159131), the largest and most liquid fund of its kind, saw its intraday price climb during morning trading before holding steady in the afternoon to close up 2.4%, with the closing price touching the 60-day moving average and daily turnover reaching 1.612 billion yuan.
Among its constituent stocks, Fortior Technology, MetaX Intelligence, and AsiaInfo Technologies surged over 10%, while Montage Technology and Kingboard Laminates gained more than 9%. Kingboard Holdings, SenseTime Group, and GigaDevice rose over 8%, with Hua Hong Semiconductor and Biren Technology climbing more than 7%. SMIC and Victory Giant Technology advanced over 6%.
Notably, the two major domestic foundry giants that hold significant weight in the index, SMIC and Hua Hong Semiconductor, both delivered second-quarter 2026 results that beat expectations. SMIC reported Q2 2026 sales revenue of $3 billion, up 20% quarter-over-quarter and surpassing its previous guidance. Its gross margin came in at 3%, a sequential improvement of 5.2 percentage points, while capacity utilization reached 93.7%. The company forecasts Q3 revenue to grow 2% to 4% sequentially, with gross margin in the range of 26% to 28%, expressing optimism about demand conditions in the second half of the year.
Hua Hong Semiconductor posted record Q2 2026 sales of $17.5 billion, up 26.8% year-over-year, with gross margin of 16.5%, an increase of 5.6 percentage points from the prior year. Profit attributable to owners of the parent company reached $38.6 million, surging 385.9% year-over-year.
Analysts at China Galaxy Securities noted that driven by robust AI demand and price increases, domestic foundry earnings are expected to improve quarter by quarter. Guosheng Securities pointed out that the better-than-expected results from industry leaders, combined with optimistic third-quarter guidance, signal that China's wafer foundry industry has clearly entered an upward cycle. With the triple catalysts of AI demand spillover, accelerated domestic substitution, and cyclical industry recovery, the broader semiconductor supply chain is poised for systematic growth opportunities.
This ETF offers exposure to scarce, pure-play hard tech in Hong Kong with support for T+0 trading. As the market's first and largest Hong Kong Stock Connect Information Technology ETF, its off-exchange feeder fund carries the code 026755. The underlying index, the Hong Kong Stock Connect Information Index, is composed of 85% hardware and 15% software, with heavy allocations to Hong Kong-listed semiconductor, electronics, and computer software companies. It covers 60 hard-tech companies, with the two foundry giants SMIC and Hua Hong Semiconductor together accounting for over 26% of the weight. Lenovo Group, the leading domestic AI PC maker, holds a weight exceeding 10%, while the PCB leaders Kingboard Holdings and Kingboard Laminates together represent more than 11% of the index—the highest concentrations among all index-linked products in the market. Additionally, on June 15th, the index added several new Hong Kong-listed hard-tech names including Zhipu AI, Victory Giant Technology, MetaX Intelligence, and Biren Technology. The index excludes large-cap internet companies such as Alibaba, Tencent, and Meituan, providing sharper focus and better capture of Hong Kong's AI hard-tech rally.
Data source: CSI Index, as of June 30, 2026. Image generated by AI. Market volatility may be significant in the near term, and short-term performance does not indicate future results. Fund investing may incur losses. Investors should make decisions based on their own financial situation and risk tolerance, paying close attention to position and risk management. The stocks mentioned are for illustration only and do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the manager's umbrella. Data sources: CSI Index Company, Shanghai and Shenzhen stock exchanges. Reference institutional viewpoints: China Galaxy Securities (August 16) "Rebound Weakens, Focus on Sectors with Clear Marginal Improvement"; Guosheng Securities (August 15) "SMIC's Record Results Validate Industry Momentum, Storage Revaluation Logic Continues to Strengthen". Note: "Market's first" refers to the fact that this ETF is the first in the market to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of August 11, 2026, the ETF's latest on-exchange scale was 2.414 billion yuan, the largest among eight ETFs tracking the same index; its average daily turnover this year has been 1.079 billion yuan, the highest among those eight ETFs. The underlying index's annual historical returns from 2021 to 2025 were -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively, with annual volatility of 4.13%, 4.63%, 4.00%, 5.49%, and 5.45% over the same period. Past index performance does not indicate future results. Fee information: When subscribing or redeeming fund shares, agents may charge commissions at a rate not exceeding 0.5%. On-exchange trading fees are subject to actual brokerage charges, with no sales service fee. For the feeder fund, subscription fees below 1 million yuan are 0.30%, from 1 million to 2 million yuan are 0.20%, and 2 million yuan and above are 1,000 yuan per transaction. Redemption fees for individual investors are 1.50% within 7 days and 0.00% from 7 days onward. For institutional investors, redemption fees are 1.50% within 7 days, 1.00% from 7 to 30 days, 0.50% from 30 to 180 days, and 0.00% from 180 days onward. No sales service fee is charged. Risk disclosure: The ETF passively tracks the CSI Hong Kong Stock Connect Information Technology Composite Index, which has a base date of November 14, 2014, and was published on June 23, 2017. Constituent stocks are adjusted periodically according to the index methodology, and backtested historical performance does not indicate future performance. The index constituents shown are for illustration only and do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the manager's umbrella. According to the fund manager's assessment, the ETF carries a risk rating of R4 (medium-high risk), suitable for aggressive investors (C4) and above. Please refer to the sales institution for suitability matching opinions. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice of any form to readers, and no liability is assumed for any direct or indirect losses arising from the use of this content. Fund investing involves risks. Past performance does not represent future performance. Performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Please invest with caution.
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