This afternoon on July 21st, the chip and semiconductor sector ignited market sentiment, with Hong Kong-listed hard tech stocks continuing their strong performance. Zhipu skyrocketed 30%, Hua Hong Hongli surged 15%, and multiple stocks including GigaDevice Semiconductor, Montage Technology, Iluvatar CoreX, and Kingboard Laminates Holdings all rose over 10% in tandem. The largest and most liquid* Hong Kong Connect Information Technology ETF, Hua Bao (159131), saw its on-market price surge 5.71%, attracting subscriptions of 90 million units and net subscriptions of 60 million units.
On the news front, global semiconductor equipment leader ASML recently released its Q2 2026 earnings report, which comprehensively exceeded expectations, and significantly raised its full-year revenue guidance to 43-45 billion euros. The company stated that demand for AI-related equipment investment is strong, with logic and memory chip revenue expected to grow approximately 25% and 75% respectively, and EUV business revenue growing about 45%.
Galaxy Securities pointed out that the global semiconductor sector has been undergoing a continuous correction since July, with the decline intensifying last week. There are no major negative fundamental factors for the industry; the correction is primarily attributed to factors such as fund deleveraging, profit-taking in the memory segment, and valuation adjustments for some stocks. The firm believes the sector's current position has already significantly released risk. They suggest focusing on advanced packaging, wafer foundries, semiconductor equipment and materials related to capacity expansion, as well as the domestic computing power theme.
Hua Bao Fund Manager Cao Xuchen, who manages the Hong Kong Connect Information Technology ETF (159131), noted during yesterday's trading session that despite recent increased market volatility, he still believes a wave of computing power-related market activity could occur in August-September. Investors may subsequently focus on the following three key event nodes: July 22nd-30th: Quarterly reports from the four major CSPs - Google, Microsoft, Meta, Amazon; August 7th: US July Non-Farm Payrolls and Unemployment Rate; August 26th: NVIDIA's earnings report. Regarding investment direction, the optical modules focused on by the ChiNext Artificial Intelligence ETF Hua Bao (159363) and the FABs (foundries) focused on by the Hong Kong Connect Information Technology ETF Hua Bao (159131) are currently relatively resilient and high-quality sectors, warranting a firm stance.
Hong Kong Connect's Rare "Pure" Hard Tech Play! Supports T+0 Trading! The market's first, largest, and most liquid Hong Kong Connect Information Technology ETF, Hua Bao (159131), has an off-market feeder fund code 026755. Its underlying index, the SZSE-HK Connect Information Technology Composite Index, is composed of "85% hardware + 15% software", heavily weighted towards Hong Kong-listed "semiconductors + electronics + computer software". It covers 60 Hong Kong-listed hard tech companies. The combined weight of the two major foundry giants, SMIC and Hua Hong Hongli, exceeds 26%. The weight of domestic AI PC leader Lenovo Group exceeds 10%. The combined weight of PCB leaders Kingboard Chemical Holdings and Kingboard Laminates Holdings exceeds 11%. These three holdings represent the highest concentration among all market indices with linked products. Furthermore, on June 15th, the index included several Hong Kong-listed hard tech newcomers such as Zhipu, Shenghong Technology, Iluvatar CoreX, and Biren Technology. The constituent stocks exclude large-cap internet enterprises like Alibaba, Tencent, and 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., as of June 30, 2026. Image generated by AI.
Recent market volatility may be significant. 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.
Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: "First in the market" refers to the Hong Kong Connect Information Technology ETF Hua Bao being the first ETF in the market tracking the SZSE-HK Connect Information Technology Composite Index. As of June 30, 2026, the latest on-market size of the Hong Kong Connect Information Technology ETF Hua Bao is 1.979 billion yuan, the largest among the 8 ETFs tracking the same index. Its year-to-date average daily turnover is 689 million yuan, the highest among the 8 ETFs tracking the same index. The historical annual returns of the underlying index, the SZSE-HK 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 predict future results.
Fund Fee Explanation: Subscription and redemption agents for the Hong Kong Connect Information Technology ETF Hua Bao may charge a commission not exceeding 0.5%. On-market transaction fees are subject to the actual charges by securities firms. No sales service fee is charged.
Institutional View Source: Galaxy Securities report dated July 17, 2026, titled "Sector Correction Accelerates, Risk Largely Released".
Risk Disclosure: The Hong Kong Connect Information Technology ETF Hua Bao and its feeder fund passively track the SZSE-HK 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 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 trends of any fund managed by the fund manager. This product is issued and managed by Hua Bao Fund Management Co., Ltd. Selling agents do not assume responsibility for the investment or redemption of the product. 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 its future performance. 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 rating as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Selling institutions (including the fund manager's direct sales channels and other selling institutions) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by selling institutions and base their decisions on the matching results. Suitability opinions from different selling institutions may not necessarily be consistent, and the risk rating results for the fund product issued by fund selling institutions shall not be lower than the risk rating result made by the fund manager. The description of the fund's risk-return characteristics in the fund contract and the fund's risk rating may differ 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.
Comments