On the afternoon of June 10th, Hong Kong's hard tech sector continued to decline sharply. Shares of companies including Lenovo Group, Tianyue Advanced, Innosilicon, and Feng Tiao Technology fell by over 10%. The largest and most liquid Southbound Information Technology ETF Hua Bao (159131) in its category fell 6.38% intraday as its premium widened. Capital entered the market on the dip, with the fund seeing a real-time net inflow of 17 million units.
A recent research report noted that, considering AI-driven demand in related industries remains high and is having spillover effects across the entire supply chain, they maintain a positive outlook for the continued high growth momentum in the second half of 2026 for sectors like memory, computing, communications, and upstream semiconductor manufacturing/equipment/components/packaging & testing. The report upgraded its rating for A/H/overseas semiconductor manufacturing to overweight and raised its rating for various A/H components to overweight. The analysis suggests the AI trend is expected to continue but cautions investors about potential valuation pullback risks.
Another securities firm's analysis suggests the Hong Kong market is currently in a balancing period between external disturbances and its own recovery, with the overall risk-reward ratio still considered reasonable. The market is primarily influenced by overseas macro risks in the short term, and it is recommended to dynamically observe data and events over the next two weeks, with a focus on tracking Federal Reserve statements and the progress of AI diffusion in the U.S. stock market.
Looking at its performance over the past six months, the underlying index of the Southbound Information Technology ETF Hua Bao (159131), which focuses on Hong Kong hard tech—the CSI Southbound Information Technology Composite Index—has gained over 19%. This significantly outperformed the Hang Seng Tech Index by 35 percentage points, the Southbound Technology Index by 33 percentage points, and the Southbound Internet Index by over 47 percentage points, demonstrating notably sharper performance and greater elasticity.
Statistical period: November 9, 2025, to June 9, 2026. The annual historical returns for the Southbound Information C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%. Past index performance is not indicative of future results.
Supporting T+0 trading, the Southbound Information Technology ETF Hua Bao (159131) is the first of its kind in the market, the largest, and the most liquid ETF focusing on Hong Kong hard tech. Its feeder fund code is 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted in Hong Kong-listed "semiconductors + electronics + computer software." It covers 52 Hong Kong hard tech companies. Within the index, the combined weight of the two wafer foundry giants, SMIC and Huahong Semiconductor, exceeds 21%, the highest among all indices with linked products in the market. The weight of domestic AI PC leader Lenovo Group is 18.20%, also the highest index weighting in the market. The combined weight of PCB leaders Kingboard Holdings and Kingboard Laminates exceeds 8%, similarly representing the highest index concentration in the market. The index constituents do not include large-cap internet companies like Alibaba, Tencent, or Meituan, resulting in a sharper focus that may more readily capture the AI hard tech trend in Hong Kong.
Data source: China Securities Index Company, Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Southbound Information Technology ETF Hua Bao being the first ETF to track the CSI Southbound Information Technology Composite Index. As of May 29, 2026, the latest intraday scale of the Southbound Information Technology ETF Hua Bao was 1.346 billion yuan, making it the largest among the 8 ETFs currently tracking the CSI Southbound Information Technology Composite Index. The fund's average daily turnover year-to-date is 372 million yuan. The annual historical returns for the underlying CSI Southbound Information Technology Composite Index (HKD) from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%. Past index performance is not indicative of future results.
Fund fee explanation: Subscription and redemption agents for the Southbound Information Technology ETF Hua Bao may charge a commission of up to 0.5%. Intraday trading fees are subject to the actual charges by securities firms. No sales service fee is charged.
Investment Considerations and Risk Disclosure
The Southbound Information Technology ETF Hua Bao and its feeder fund passively track the CSI Southbound Information Technology Composite Index. The index base date is November 14, 2014, and it was released 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 Hua Bao Fund Management Co., Ltd. Distributing institutions do not assume responsibility for the investment performance or redemption of the product. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Summary," and other fund legal 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. Sales institutions (including the fund manager's direct sales channels and other sales institutions) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by sales institutions and base their decisions on the matching results. Appropriateness opinions from different sales institutions may not necessarily be consistent. The fund product risk rating results issued by fund sales institutions shall not be lower than the risk rating results determined by the fund manager. There may be differences between the fund's risk-return characteristics as described in the fund contract and its risk rating due to different considerations. 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.
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