The hard-tech sector in Hong Kong experienced another day of consolidation on July 24, with the largest and most liquid Hang Seng Tech Connect Information Technology ETF (159131) declining 1.99% to close. This marks its third consecutive day of losses, though the weekly chart remains resilient, showing a 2.97% gain. Notably, the ETF has seen sustained capital inflows recently, attracting a net total of 6.2 billion yuan over the past five trading days.
Among the ETF's underlying holdings, 51 stocks declined while only 9 advanced. Kingboard Chemical Holdings and Kingboard Laminates fell over 7%, followed by Shenghong Technology and Tianyue Advanced with drops exceeding 6%. SenseTime and China Software International both lost over 5%, while Xiaomi Group and Lenovo Group fell more than 1%. On the upside, Montage Technology surged over 6% to lead gains, Zhipu Technology rose more than 5%, and Semiconductor Manufacturing International Corporation (SMIC) along with Hua Hong Semiconductor managed to close in positive territory.
In terms of market news, today marks the final trading day before the "giant" Cxmt Corporation (Cxmt Corporation) makes its debut on the STAR Market (科创板). On the evening of July 23, Cxmt Corporation released its listing announcement, confirming it will start trading on the STAR Market on July 27. The company's IPO price is set at 8.66 yuan per share, with an initial issuance of approximately 6.688 billion shares. After fully exercising the over-allotment option, the total number of shares issued will reach about 7.691 billion, with the final strategic placement totaling roughly 1.667 billion shares. Analysts from Huaxi Securities commented that AI computing power is driving global DRAM demand expansion, and the combined effect of rising volumes and prices is pushing the memory industry into an upward cycle.
The recent global tech asset correction has prompted a review from Minmetals Securities, which stated in a research report that the long-term bullish logic for Chinese tech stocks has not fundamentally changed. The report cites three key reasons: First, global AI capital expenditure remains in an expansion phase. The combined 2026 capital expenditure expectations for Google, Amazon, Meta, and Microsoft have been further revised upward from approximately $650 billion at the start of the year to over $700 billion. Cloud services and end-user demand also maintain relatively fast growth, and there is no substantive evidence of an overall contraction in AI investment. Additionally, current core AI companies have strong earnings support, with valuation levels significantly below those seen during the internet bubble era. Second, domestic models like Kimi K3 continue to iterate, demonstrating that China is still rapidly catching up in areas such as large models, computing infrastructure, and application ecosystems. Technological progress and cost reduction are expected to expand the application scope of AI, driving demand for domestic chips, software and hardware infrastructure, and downstream applications, leaving substantial room for growth in domestic substitution. Third, state-owned capital increases and regulatory authorities' market-stabilizing statements help alleviate negative feedback loops in liquidity.
Summarizing the current situation, Minmetals Securities concluded that this round of adjustment is primarily a phase of risk release caused by a combination of external shocks and crowded trades, and it has not altered the long-term development direction of China's tech industry. A significant market correction could, in fact, provide an observation window for medium to long-term positioning.
The Hang Seng Tech Connect Information Technology ETF (159131) represents a scarce "pure-blood" hard-tech opportunity in Hong Kong, supporting T+0 trading. As the first ETF of its kind in the market and the largest and most liquid in its category, its over-the-counter (OTC) feeder fund code is 026755. The underlying index, CSI Connect Hong Kong Information Technology Index, is composed of "85% hardware + 15% software," heavily weighting Hong Kong-listed companies in the "semiconductor + electronics + computer software" sectors. It covers 60 Hong Kong hard-tech firms. Notably, the two major wafer foundry giants, SMIC and Hua Hong Semiconductor, together account for over 26% of the total weight. The domestic AI PC leader Lenovo Group holds a weight of over 10%, while the PCB leaders Kingboard Chemical Holdings and Kingboard Laminates combine for more than 11%. All three represent the highest concentrations among any index-linked products in the entire market. Furthermore, on June 15, the index added several new Hong Kong hard-tech names, including Zhipu Technology, Shenghong Technology, Tianshu Zhixin, and Biren Technology. Importantly, the component stocks do not include large-cap internet companies like Alibaba, Tencent, or Meituan, making the index more focused and better positioned to capture the AI hard-tech rally in Hong Kong.
Data source: CSI Index, 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, and fund investments may incur losses. Investors must make rational investment decisions based on their own capital situations and risk tolerance, paying close attention to position management and risk control. The stocks mentioned in this material are for display purposes only and do not constitute any form of investment advice, nor do they represent the holdings or trading intentions of any fund managed by the fund manager.
Data source: CSI Index Company, Shanghai and Shenzhen Stock Exchanges.
Note: "The first ETF in the market" refers to the Hang Seng Tech Connect Information Technology ETF being the first ETF in the market to track the CSI Connect Hong Kong Information Technology Index. As of July 22, 2026, the latest on-market scale of the Hang Seng Tech Connect Information Technology ETF was 2.319 billion yuan, making it the largest among the 8 ETFs tracking the same index. Its average daily trading volume this year has been 957 million yuan, the highest among the 8 ETFs tracking the same index. The annual historical returns of the underlying CSI Connect Hong Kong Information Technology Index (HKD) from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. The annual volatility for the same period was: 4.13%, 4.63%, 4.00%, 5.49%, and 5.45%. Past performance of an index does not predict future results.
Fund fee description: Subscription and redemption agents for the Hang Seng Tech Connect Information Technology ETF may charge commissions at a standard rate not exceeding 0.5%. On-market trading fees are subject to actual charges by securities companies. No sales service fee is charged.
Source of institutional views referenced: Minmetals Securities, July 24, 2026, "Bullish on the Long-term Trend of Chinese Tech Stocks."
Risk Warning: The Hang Seng Tech Connect Information Technology ETF and its feeder funds passively track the CSI Connect Hong Kong Information Technology Index. The index's base date is November 14, 2014, and it was published on June 23, 2017. The index component stocks shown in this material are for display purposes only. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings or trading intentions of any fund managed by the fund manager. This product is issued and managed by Hwabao Fund. Distributing institutions do not bear the responsibility for the product's investment or payment. Investors should carefully read fund legal documents such as the "Fund Contract," "Prospectus," and "Fund Product Information Summary" to understand the fund's risk-return characteristics and select products that match their own risk tolerance. Past performance of a fund does not predict its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investment requires caution! The fund manager assesses the risk level of this fund as R4 (medium-high risk), suitable for investors who are aggressive (C4) and above. Sales institutions (including the fund manager's direct sales institutions and other sales institutions) conduct risk assessments on this fund in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by sales institutions and rely on their matching results. The suitability opinions of various sales institutions may not be consistent, and the risk level evaluation results of fund products issued by fund sales institutions may not be lower than the risk level evaluation results made by the fund manager. There may be differences in the risk-return characteristics and risk levels stated in the fund contract due to different factors considered. Investors should understand the risk-return situation of the fund, carefully choose fund products based on their own investment objectives, time horizon, investment experience, and risk tolerance, and bear their own risks. The registration of this fund by the China Securities Regulatory Commission does not constitute a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Fund investment is risky; caution is required.
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