Hong Kong's hard technology stocks faced another pullback today (July 13th). The largest and most liquid* Hong Kong Connect Information Technology ETF, Huabao (159131), saw its price fluctuate and decline throughout the day, closing down 6.39% with a turnover of 2.7 billion yuan. Trading volume contracted slightly, while net subscriptions of 26 million units flowed into the fund during the session.
Regarding the constituent stocks, nearly 90% declined. Seven stocks, including Kingboard Holdings Ltd, Kingboard Laminates Holdings Ltd, and GigaDevice Semiconductor Inc, plunged over 10%. Among the heavyweight components, Semiconductor Manufacturing International Corporation (SMIC) fell 1.63%. Xiaomi Corporation closed flat, Lenovo Group Ltd dropped over 4%, and Huahong Grace Semiconductor Manufacturing Corporation fell more than 7%.
Is the market style shifting? How should investors respond now?
One securities firm analysis suggests the market is likely still in a phase of volatility and structural rebalancing. AI remains a medium to long-term main theme, but short-term fluctuations following high-crowding trades require more order confirmations, earnings reports, or commercialization progress to digest. The recovery in non-AI sectors stems more from valuation shifts and low-position catch-ups, with its sustainability needing validation from fundamental catalysts. In terms of allocation, a balance between the tech main theme and non-AI recovery is advisable. Within AI, focus on segments with clearer validation; for non-AI directions, look to sectors with industrial catalysts or signs of improving fundamentals, rather than continuing to bet on the extreme extension of a single style.
Specifically for the semiconductor sector, the analysis points out that a super expansion cycle is beginning, ushering in a super era for semiconductor equipment. On the demand side, AI computing power is driving an explosion in demand for high-end memory, with AI servers requiring significantly higher DRAM and NAND capacities than traditional servers. On the supply side, overseas memory leaders are allocating most of their advanced process capacity to HBM and high-end DDR5, squeezing capacity for general-purpose memory. This widening supply-demand gap is pushing memory chip prices and volumes higher. Against this backdrop, capital expenditures by overseas leaders have surged significantly. Coupled with the imminent listings of two major domestic memory firms expected to continue expanding production, global memory manufacturers are structurally increasing their capital expenditures.
Huabao (159131) offers a rare "pure-play" hard tech exposure in Hong Kong and supports T+0 trading. It is the first ETF of its kind in the market, the largest and most liquid Hong Kong Connect Information Technology ETF. 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 the PCB leaders, Kingboard Holdings and Kingboard Laminates, exceeds 11%. These three represent the highest concentration among all indices with linked products in the market. Furthermore, on June 15th, the index included several new Hong Kong hard tech entrants such as Zhipu AI, Biren Technology, and Shenghong Technology. The constituent stocks exclude large-cap internet companies like Alibaba Group, Tencent Holdings, and Meituan, giving it a sharper focus and making it more effective for capturing Hong Kong's AI hard tech trends.
Data sources: China Securities Index Co., Ltd., as of June 24, 2026. Image generated by AI. Data sources: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to Huabao (159131) being the first ETF to track the CSI Hong Kong Connect Information Technology Composite Index. As of June 30, 2026, the latest on-exchange size of Huabao (159131) was 1.979 billion yuan, the largest among the 8 ETFs tracking the same index. Its year-to-date average daily turnover was 689 million yuan, the highest among the 8 ETFs tracking the same index. 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%, 39.30% respectively. Its annualized volatility for 2021-2025 was: 4.13%, 4.63%, 4.00%, 5.49%, 5.45% respectively. Past index performance does not indicate future results. Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Fund investments may incur losses. Investors must invest rationally based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management.
Fund fee explanation: Subscription and redemption agents for Huabao (159131) 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.
Reference institutional views sourced from securities research reports dated July 7, 2026, and July 9, 2026.
Risk Disclosure: Huabao (159131) and its feeder fund passively track the CSI Hong Kong Connect Information Technology Composite Index. The index base date 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 manager. This product is issued and managed by Huabao Fund Management Co., Ltd. Distributing institutions do not bear the investment or redemption liability for the product. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other fund legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk承受 capacity. Past fund performance does not predict its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment involves risk! The fund manager assesses this fund's risk等级 as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors.销售机构 (including the fund manager's直销机构 and other销售机构) assess the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by销售机构 and base their decisions on the matching results. Appropriateness opinions from different销售机构 may not necessarily be consistent, and the fund product risk等级评价 results issued by fund销售机构 shall not be lower than the risk等级评价 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谨慎 choose fund products based on their own investment objectives, horizon, experience, and risk承受 capacity, 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.
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