On August 13, A-share and Hong Kong-listed hard tech stocks rallied together, ending a two-day losing streak for Hong Kong's hard tech sector. The largest and most liquid ETF of its kind, the HuaBao Hang Seng Connect IT ETF (159131), saw its intraday price climb in early trading, pull back, and then surge again near the close, finishing the session up 1.15% with a total turnover of 1.434 billion yuan.
Among its constituent stocks, KB Chemical surged over 10%, Montage Technology and Hua Hong Semiconductor both rose over 7%, and Guanghe Technology, GigaDevice, and KB Group each climbed over 5%. Shenghong Technology, Lenovo Group, and Biren Technology all advanced by more than 4%.
On the news front, reports indicate that SK hynix has restarted construction of its second NAND flash memory manufacturing plant in Dalian, China, aiming to expand capacity by approximately 50%. The company plans to introduce semiconductor production equipment by the end of this year and begin mass production in the first half of next year. Additionally, SK hynix is making a massive investment in its home country of South Korea, announcing plans to invest 35.2 trillion won in the Yongin "Y2" plant and 19.1 trillion won in the Cheongju "M17" plant, totaling approximately 54 trillion won.
From a semiconductor industry perspective, demand for AI computing hardware infrastructure remains robust, with global semiconductor sales continuing to see significant year-over-year growth. According to Central China Securities, global semiconductor sales increased by 123.6% year-over-year in June 2026 and 9.7% month-over-month. The World Semiconductor Trade Statistics (WSTS) projects that global semiconductor sales will reach $1.511 trillion in 2026, representing an 89.9% increase year-over-year.
Where to focus from here
On the technical front, a research report from Guosen Securities suggests that areas like AI computing hardware may be in an M-top formation. The conditions for a second wave of upward momentum are gradually building, and the focus now is on whether the criteria for moving to the right-side high point are being met. First, the decline in AI computing hardware stocks has been significant, but the decline in trading indicators has been relatively modest. Second, while market concerns about the sustainability of capital expenditure (Capex) have eased slightly following cloud service provider (CSP) earnings reports, they have not been eliminated. The conditions for a second wave of the AI computing hardware rally are still accumulating, and the current period may be a bottoming phase. Going forward, attention should be on two key factors: whether the high growth in AI revenue can be sustained, and whether a new narrative catalyst, similar to the surge in AI agent adoption in early 2026, can emerge to drive a new round of upward expectations for the broader tech sector.
Hong Kong's "Pure" Hard Tech Opportunity
The HuaBao Hang Seng Connect IT (159131) ETF, the first of its kind in the market and the largest and most liquid offering targeting the Hang Seng Connect IT Index, supports T+0 trading. Its off-exchange feeder fund (code 026755) tracks the same index. The Hang Seng Connect Information Technology C Index, composed of "85% hardware and 15% software," heavily weights Hong Kong-listed "semiconductor, electronics, and computer software" companies. It encompasses 60 Hong Kong-listed hard tech firms, with the two major wafer foundries, Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, accounting for a combined weight of over 26%. The domestic AI PC leader, Lenovo Group, makes up over 10% of the index, while the PCB leaders KB Group and KB Chemical together represent over 11%. These three components are the highest-weighted among all index-linked products in the market. Furthermore, on June 15, the index was updated to include several new Hong Kong-listed hard tech stocks such as Zhipu, Shenghong Technology, Tianshu Zhixin, and Biren Technology. The index excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering a higher "purity" and greater sensitivity to the Hong Kong AI hard tech sector.
Data source: China Securities Index, as of June 30, 2026. Image generated by AI. Market volatility may be significant in the near term, and short-term gains or losses do not predict future performance. Fund investments may incur losses. Investors must prudently manage their positions and risk based on their own capital situation and risk tolerance. The stocks mentioned in this material are for illustrative purposes only and do not constitute investment advice of any kind, nor do they represent the holdings or trading activities of any fund managed by the fund manager. Data sources: China Securities Index, Shanghai and Shenzhen Stock Exchanges. Reference sources: Central China Securities, August 11, 2026, "Overseas Cloud Vendors Continue to Raise 2026 CapEx Plans, Server CPU Demand Strong"; Guosen Securities, August 8, 2026, "Revisiting the Tech M-Top: When Will the Second Wave of Tech Arrive?"
Note: "The first of its kind in the market" refers to the Hang Seng Connect IT ETF being the first ETF in the market to track the CSI Hang Seng Connect Information Technology Index. As of August 11, 2026, the on-exchange net asset value of the Hang Seng Connect IT ETF was 2.414 billion yuan, the largest among the eight ETFs tracking the same index. The average daily trading volume of this ETF since the beginning of the year is 1.079 billion yuan, the highest among the eight. The historical annual returns for the CSI Hang Seng Connect Information Technology Composite Index (HKD) from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%. The volatility for the same periods was 4.13%, 4.63%, 4.00%, 5.49%, and 5.45%. Past performance of the index does not predict future results. Fee structure: Investors may be charged a commission of up to 0.5% by the subscription and redemption agent. On-exchange trading fees are determined by the securities company and do not include a sales service fee. The subscription fee for the HuaBao CSI Hang Seng Connect IT ETF Feeder Fund is 0.30% for amounts under 1 million yuan, 0.20% for amounts between 1 million and 2 million yuan, and a flat fee of 1,000 yuan for amounts of 2 million yuan or more. The redemption fee for individual investors is 1.50% for holdings under 7 days and 0.00% for holdings of 7 days or more. For institutional investors, the redemption fee is 1.50% for holdings under 7 days, 1.00% for holdings between 7 and 30 days, 0.50% for holdings between 30 and 180 days, and 0.00% for holdings of 180 days or more. No sales service fee is charged. Risk disclosure: The Hang Seng Connect IT ETF passively tracks the CSI Hang Seng Connect Information Technology Index. The index's base date is November 14, 2014, and it was launched on June 23, 2017. The index's constituent stocks are adjusted according to its compilation rules. Its back-tested historical performance does not predict future index performance. The index constituent stocks mentioned in this document are for illustrative purposes only and do not constitute investment advice of any kind, nor do they represent the holdings or trading activities of any fund managed by the fund manager. According to the fund manager's assessment, the risk level of the Hang Seng Connect IT ETF is R4 (medium-high risk), suitable for active (C4) and above investors. The suitability rating should be confirmed with the sales institution. Any information appearing in this document (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must be responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this document do not constitute investment advice of any kind to readers, and the relevant parties shall not be liable for any losses directly or indirectly incurred from the use of this content. Fund investments carry risks. Past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investments should be made with caution. (The MACD golden cross signal appears, and these stocks are showing good upward momentum.)
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