Hong Kong's hard technology sector saw a strong rally today, with ASMPT surging over 10%, GigaDevice up more than 8%, Kingdee International rising over 7%, and Kingboard Holdings gaining more than 6%. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, HuaBao (159131), opened sharply higher, climbing 3% and has attracted over 570 million yuan in net inflows over the past four trading sessions.
Fund Manager's Perspective
The fund manager for HuaBao HK-Connect Information Technology ETF (159131), Cao Xuchen, believes that the core reason for the global memory stock rally since April is the increasing proportion of long-term agreement revenue, as this provides a guarantee for 2027-2028 performance. As a cyclical industry, memory's key advantage is the potential for its upcycle to last longer than expected, with supply chain agreements (SCA) being a core safeguard. The upcoming market phase may involve these SCAs providing a guarantee increasing from 50% to over 70%, which would be a process of valuation expansion. Looking at the quarterly reporting schedule, the next reports are due around September 25th. The market is likely to apply significantly more stringent scrutiny to the cyclical nature of memory companies after their recent gains. Given that memory is a central component of this round of AI computing power investment, this timing aligns well with the expectation for a strong technology sector performance from June to September.
Sector Performance Divergence
Over the past six months, the Hong Kong technology sector has shown a stark divergence in performance. The underlying index for the hard-tech-focused HuaBao HK-Connect Information Technology ETF (159131) – the CSI Hong Kong Stock Connect Information Technology Composite Index – has gained 29.8%. This significantly outperformed the Hang Seng Tech Index by 48%, the HK-Connect Technology Index by 46%, and the HK-Connect Internet Index by over 65%, demonstrating superior sharpness and elasticity.
Performance period: 2025.12.25-2026.6.25. The historical annual returns for the HK-Connect Information Technology Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% respectively. Past index performance is not indicative of future results.
ETF Product Features
A rare "pure-play" hard technology ETF for Hong Kong! Supports T+0 trading! HuaBao HK-Connect Information Technology ETF (159131) is the first of its kind in the market, the largest, and most liquid. Its 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 60 Hong Kong hard-tech companies. The combined weight of the two wafer fabrication giants, SMIC and Huahong Grace, exceeds 26%. The domestic AI PC leader, Lenovo Group, has a weight over 10%. The combined weight of PCB leaders Kingboard Holdings and Kingboard Laminates is over 11%. These three holdings represent the highest concentration in any index with linked products across the entire market. Furthermore, the index recently added several new Hong Kong-listed hard-tech heavyweights like Zhipu AI and Biren Technology. The index components do not include large-cap internet enterprises like Alibaba, Tencent, or Meituan, resulting in higher sharpness and making it easier to capture the Hong Kong AI hard-tech market trend.
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to HuaBao HK-Connect Information Technology ETF being the first ETF to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of 2026.6.25, the latest on-exchange scale of the ETF was 1.848 billion yuan, making it the largest among the 8 ETFs currently tracking the index. Its average daily turnover year-to-date is 647 million yuan. The historical annual returns for the underlying index, the CSI Hong Kong Stock Connect Information Technology Composite Index (HKD), from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% respectively. Past index performance is not indicative of future results.
Fee Information
Subscription and redemption agents for HuaBao HK-Connect Information Technology ETF 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.
Risk Disclosure
HuaBao HK-Connect Information Technology ETF and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The index base date is 2014.11.14, and its release date was 2017.6.23. 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 Management Co., Ltd. Distributing institutions do not bear responsibility for the product's investment or redemption. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other legal fund documents to understand the fund's risk-return characteristics and choose 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 level as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributing institutions (including the fund manager's direct sales channels and other distributors) evaluate this fund's risk according to relevant laws and regulations. Investors should pay timely attention to the appropriateness opinions issued by distributors and base their decisions on the matching results. Appropriateness opinions from different distributors may not be entirely consistent. The risk rating results of the fund product issued by distributors shall not be lower than the risk rating result made by the fund manager. There may be differences between the fund's risk-return characteristics described in the fund contract and its risk level due to different considerations in their assessment. Investors should understand the fund's risk-return profile and choose fund products prudently 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 a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.
A MACD golden cross signal has formed, indicating positive momentum for these stocks.
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