On May 26th, the domestic chip and semiconductor industry chain experienced a slight pullback at the open. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, Huabao (159131), saw its on-market price drop by 3.72%, while attracting a rapid subscription inflow of 290 million units. Investors are reminded that this product carries a high premium, and following the trend on-market requires caution regarding high premium risks!
Regarding the impact of the recent Tau (τ) Law, Huabao (159131) ETF manager Cao Xuchen analyzed: The equivalent transistor density is projected to leap to 238MTr/mm2 by 2026, reaching the level of TSMC's 3nm process. Previously, it was expected that the semiconductor industry would achieve stable yields for 5nm mobile phone chips by year-end, with small-batch production of 5nm GPUs. This breakthrough to 3nm, bypassing EUV barriers, signifies an explosive acceleration in the domestic production process. Prior trading mainly focused on orders for domestic GPUs and capacity expansion for semiconductor equipment. This round, however, is pricing in the 3nm breakthrough and the raising of the long-term ceiling in advance, which is expected to significantly increase market volatility. Due to this overtaking opportunity at the 3nm node, the essence of this opportunity is the convergence of the Price-to-Book (PB) ratios of Semiconductor Manufacturing International Corporation and Huahong towards that of TSMC.
Since rebounding from its low on March 31st, the underlying index of the Hong Kong Stock Connect Information Technology ETF Huabao (159131)—the CSI Hong Kong Stock Connect Information Technology Composite Index—has accumulated a gain of 32.59%. In the same period, the Hang Seng Tech Index and the Hong Kong Stock Connect Tech Index rose by 3.83% and 2.6% respectively, highlighting its significantly sharper performance and greater elasticity.
Statistical period: March 31, 2026 - May 22, 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.
Supports T+0 trading! Targeting the Hong Kong stock chip supercycle—the first, largest, and most liquid* Hong Kong Stock Connect Information Technology ETF, Huabao (159131). Its off-market feeder fund code is 026755. The underlying index is composed of "70% hardware + 30% software," heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software." It covers 52 Hong Kong-listed hard-tech companies, with a memory chip concentration exceeding 26%. Notably, the combined weight of Semiconductor Manufacturing International Corporation and Huahong Semiconductor exceeds 23%, making it the index with the highest weight in advanced wafer manufacturing in the market. The index components exclude large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher sharpness and making it easier to capture the Hong Kong AI hard-tech trend. (As of May 22, 2026)
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges. Note: "First in the market" refers to Huabao (159131) being the first ETF tracking the CSI Hong Kong Stock Connect Information Technology Composite Index. As of May 22, 2026, the latest on-market size of Huabao (159131) was 8.40 billion yuan, making it the largest among the 7 ETFs currently tracking the index. Its average daily turnover this year is 2.56 billion yuan. The annual historical returns of 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.
Fund fee explanation: The subscription and redemption agents for Huabao (159131) may charge a commission of up to 0.5%. On-market trading fees are subject to the actual charges by securities firms. No sales service fee is charged. *Institutional view reference source: Kaiyuan Securities "Weekly View: NDRC Guides Domestic Large Models to Adapt to Domestic Chips, Continue to Value Domestic Computing Power."
Risk Disclosure: Huabao (159131) and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The base date of this index 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 any form of investment advice nor represent the holdings or trading动向 of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributors do not assume responsibility for the product's investment, redemption, or risk management. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other legal fund documents to understand the fund's risk-return characteristics and choose products 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等级 as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's直销机构 and other distributors) evaluate this fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by distributors and base their decisions on the matching results. Appropriateness opinions from different distributors may not necessarily be consistent, and the risk等级 evaluation results issued by fund distributors shall not be lower than those made by the fund manager. There may be differences between the fund's risk-return characteristics as described in the fund contract and its risk等级 due to different考虑因素. Investors should understand the fund's risk-return profile and结合自身 investment objectives, horizon, experience, and risk tolerance to谨慎 choose fund products and bear the risks themselves. 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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