On Tuesday, June 25th, Hong Kong's hard tech sector staged an intraday deep-V reversal. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, Huabao (159131), surged over 2% in early trading. After briefly dipping into negative territory, it reversed course again to close up 0.45% at 1.127, setting a new record high since its listing. The fund saw subscriptions of 198 million units and net inflows of 168 million units for the day, marking the third consecutive session of substantial capital inflows.
Among its constituent stocks, Biren Technology, GigaDevice, Jiufang Zhitou Holdings, and Kingboard Laminates were among six stocks that rose over 10%. Zhipu AI gained over 8%, Montage Technology climbed more than 6%, and Lenovo Group advanced over 4%.
On the news front, Micron Technology reported explosive earnings for its fiscal third quarter of 2026. The company achieved revenue of $41.46 billion, a sequential increase of 73.8% and a year-over-year surge of 345.7%, significantly exceeding market expectations. Micron also disclosed that it has signed long-term supply agreements with 16 strategic customers, involving approximately $22 billion in financial commitments, securing sales for the next three to five years.
Fund manager Cao Xuchen of the Huabao Hong Kong Stock Connect Information Technology ETF believes that the core driver behind the rise in global memory stock prices since April has been the increasing proportion of long-term agreement revenue, as this provides a guarantee for 2027-2028 performance. As a cyclical industry, the ultimate advantage for memory is an unexpectedly extended cycle duration, with SCA being its core safeguard. However, the upcoming trading dynamic may involve the market's perception of this SCA guarantee increasing from 50% to over 70%, a process that re-rates valuations. Looking at the earnings calendar, the next quarterly report is due around September 25th. The market is likely to apply significantly stricter scrutiny to the cyclical nature of memory companies after their recent gains. Given that memory is the absolute core of this round of AI computing investment, this timing aligns perfectly with our positive outlook for the tech sector's performance rhythm from June to September.
Examining the past six months, a stark divergence has emerged within the Hong Kong tech space. The underlying index of the Huabao ETF, the CSI Hong Kong Stock Connect Information Technology Composite Index, which focuses on Hong Kong hard tech, has delivered a cumulative return of 29.8%. This significantly outperforms the Hang Seng Tech Index by 48%, the Hong Kong Stock Connect Technology Index by 46%, and the Hong Kong Stock Connect Internet Index by over 65%, demonstrating superior sharpness and elasticity.
Performance Period: December 25, 2025 - June 25, 2026. The annual historical returns for the Hong Kong Stock Connect Information C 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.
A rare 'pure-blood' hard tech play in Hong Kong! Supports T+0 trading! The Huabao Hong Kong Stock Connect Information Technology ETF (159131) is the first of its kind in the market, the largest, and most liquid ETF tracking its category. 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, with the two wafer foundry giants, SMIC and Huahong Grace, collectively accounting for over 26% of the index weight. The domestic AI PC leader, Lenovo Group, holds a weight exceeding 10%, while the PCB leaders, Kingboard Group and Kingboard Laminates, together account for over 11%. These three segments represent the highest concentration among all market indices with linked products. Furthermore, the index recently added several new Hong Kong hard tech heavyweights like Zhipu AI and Biren Technology. The index excludes large-cap internet companies such as Alibaba, Tencent, and Meituan, resulting in higher sharpness and making it more effective at capturing the Hong Kong AI hard tech rally.
Data Source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Huabao Hong Kong Stock Connect Information Technology ETF being the first ETF to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of June 16, 2026, the ETF's latest on-market size was 1.337 billion yuan, making it the largest among the 8 ETFs currently tracking the index. Its year-to-date average daily turnover is 565 million yuan. The annual historical 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 the Huabao Hong Kong Stock Connect Information Technology ETF may charge commissions of up to 0.5%. On-market trading fees are subject to the rates set by securities firms. No sales service fee is charged.
Risk Disclosure: The Huabao Hong Kong Stock Connect Information Technology ETF and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The index's base date is November 14, 2014, and it was launched on June 23, 2017. The index constituents mentioned in this material are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice and do not represent the holdings or trading activities of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributors do not bear responsibility for the investment performance or redemption obligations of the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other legal documents to understand the fund's risk-return characteristics and select products 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 level as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's direct sales channels and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should pay attention to the suitability opinions provided by distributors and base their decisions on the matching results. Suitability opinions from different distributors may not be consistent, and the risk rating results provided by fund distributors shall not be lower than those determined by the fund manager. The description of the fund's risk-return characteristics in the Fund Contract and its risk rating may differ due to different assessment factors. Investors should understand the fund's risk-return profile and choose fund products cautiously based on their investment objectives, horizon, experience, and risk tolerance, bearing their own risks. 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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