This afternoon on June 25th, Hong Kong's hard technology sector staged a rally, turning positive. The largest and most liquid* Hong Kong Stock Connect Information Technology ETF, Huabao (159131), experienced a V-shaped intraday reversal, currently up 0.53%. Real-time subscription units surged to 198 million, representing a net subscription of 168 million units. This follows two consecutive trading days where funds poured in a combined total exceeding 258 million yuan.
Key Catalyst for the Rally
The catalyst for the move appears to be the blockbuster third-quarter fiscal 2026 earnings report from Micron Technology (MU). The fund manager for the Huabao Hong Kong Stock Connect Information Technology ETF (159131), Cao Xuchen, expressed his view that the core reason for the global memory stock rally since April has been the increase in the proportion of long-term agreement revenue. This is seen as a guarantee for 2027-2028 performance. As a cyclical industry, the 'ace in the hole' for the memory sector is when the cycle duration exceeds expectations, with SCA (supply contract agreements) being its core safeguard. The upcoming phase of trading may involve the SCA guarantee increasing from 50% to over 70%, which is a process of valuation re-rating. Looking at the quarterly reporting schedule, the next report is due around September 25th. The market is expected to apply extremely stringent scrutiny to the cyclicality of memory sector companies following this rally. Given that memory is the absolute core force in this round of AI computing power investment, this dynamic aligns perfectly with the optimistic outlook for the technology sector's performance from June to September.
Impressive Recent Performance
Over the past six months, the underlying index of the Huabao Hong Kong Stock Connect Information Technology ETF (159131), which focuses on Hong Kong's hard tech—the CSI Hong Kong Stock Connect Information Technology Composite Index—has accumulated gains of 29.8%. This significantly outperforms the Hang Seng TECH Index by 50%, the Hong Kong Stock Connect Technology Index by 44%, and the Hong Kong Stock Connect Internet Index by over 64%, demonstrating superior sharpness and elasticity.
Performance Period: December 24, 2025 - June 24, 2026. The historical annual 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 performance of an index is not indicative of future results.
Unique Pure-Play Hard Tech Exposure
This ETF offers rare 'pure-blood' hard tech exposure in the Hong Kong market and supports T+0 trading. As the first of its kind in the entire market, the largest, and most liquid Hong Kong Stock Connect Information Technology ETF, Huabao (159131), with its offshore feeder fund code 026755, tracks an index composed of '80% hardware + 20% software'. It has significant exposure to Hong Kong-listed 'semiconductors + electronics + computer software', encompassing 60 hard tech companies. The combined weight of the two wafer foundry giants, SMIC and Huahong Grace, exceeds 24%. The domestic AI PC leader, Lenovo Group, holds a weight of over 11%. The combined weight of the PCB leaders, Kingboard Holdings and Kingboard Laminates Holdings, is also over 11%. All three represent the highest concentration in their respective sectors among all market indices with linked products. Furthermore, the index recently included several new Hong Kong-listed hard tech heavyweights with market caps in the hundreds of billions, such as Zhipu and Biren Technology. Notably, the constituent stocks exclude large-cap internet enterprises like Alibaba, Tencent, and Meituan, resulting in higher sharpness and making it more effective for capturing the Hong Kong AI hard tech rally.
Data Source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.
Note: 'First in the entire 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 latest on-exchange scale of the Huabao Hong Kong Stock Connect Information Technology ETF was 1.337 billion yuan, making it the largest among the 8 ETFs currently tracking the CSI Hong Kong Stock Connect Information Technology Composite Index. Its year-to-date average daily turnover is 565 million yuan. The historical annual 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 performance of an index is not indicative of future results.
Fund Fee Information
Subscription and Redemption Agents for the Huabao Hong Kong Stock Connect Information Technology ETF may charge a commission not exceeding 0.5%. On-exchange trading fees are subject to the actual charges by securities firms. No sales service fee is charged.
Reference Institutional View Source: Galaxy Securities report 'The Puzzle of Depressed Valuations, Accumulating Strength on a Long Slope – 2026 Mid-Year Hong Kong Stock Investment Outlook'.
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 base date for this index is November 14, 2014, and its release date was June 23, 2017. The index constituents mentioned in this material are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holding information or trading动向 of any fund managed by the asset manager. This product is issued and managed by Huabao Fund Management Co., Ltd. Distributing institutions do not bear responsibility for the investment performance 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 select a product 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 and requires caution! The fund manager assesses this fund's risk等级 as R4 – Medium to High Risk, suitable for Aggressive (C4) and above investors. Distributing institutions (including the fund manager's直销机构 and other distributors) conduct risk assessments of this fund according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by distributing institutions and rely on their matching results. Appropriateness opinions from different distributing institutions may not necessarily be consistent. The fund product risk等级 evaluation results issued by fund distributors shall not be lower than the risk等级 evaluation result 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, time horizon, investment experience, and risk承受能力,谨慎 select fund products and bear 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前景, or returns. Funds carry risks; investment requires caution.
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