On June 24, AI hardware made a powerful comeback, with the semiconductor sector leading the charge. The STAR 50 Index surged 3.85%, setting another record high. The thematic rally intensified, with over 4,000 stocks falling across the broader market, resulting in a total turnover of 3.3 trillion yuan.
The Huabao STAR Chip ETF (589190), known for its relatively low management fees*, and the Huabao Electronic ETF (515260), which includes popular concepts like PCBs, both saw their on-exchange prices rise over 4%. Hong Kong-listed chip stocks demonstrated significant elasticity. The Huabao Hang Seng Hong Kong Stock Connect Information Technology ETF (159131), the largest and most liquid fund of its kind*, saw its on-exchange price surge as much as 5% intraday, closing up 4.57% with a record single-day turnover of 3 billion yuan. The robust gains attracted heavy capital inflows, with the fund receiving a net subscription of 159 million shares today, following an influx of over 80 million yuan yesterday.
The chemical sector rebounded, led by carbon fiber, phosphorus chemicals, and petrochemicals. The Huabao Chemical ETF (516020), which tracks the overall performance of the chemical sector, rose over 3% on-exchange. The sector's fundamentals are showing signs of bottoming out, with the basic chemicals sector (CITIC Primary Industry) attracting over 10 billion yuan in net main fund inflows for the day.
Additionally, Hong Kong-listed healthcare and medical stocks rallied strongly, led by CXO companies. The Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), which allocates over 40% of its portfolio to leading CXO firms, saw its on-exchange price rise as much as 5.44% intraday, closing up over 4%. The Huabao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880), which focuses 100% on innovative drug R&D companies, touched a high of 3.94% before settling up over 2%.
Notably, the long-dormant Hong Kong internet sector showed signs of life. Tencent Holdings surged 5% intraday. The Huabao Hang Seng Hong Kong Stock Connect Internet ETF (513770), heavily weighted in internet leaders, saw its on-exchange price climb as much as 2%. Goldman Sachs maintained its 12-month target price for Tencent, stating that its valuation recovery depends on the progress of its AI narrative, with the internal testing of WeChat AI being a key step. Current valuations for Hong Kong internet leaders are near historical lows, with the Hang Seng Stock Connect Internet Index's P/E (TTM) at only 17.8 times, sitting at the 0.7th percentile over the past decade.
Market sentiment remains high. As of June 23, the balance of margin financing and securities lending on the A-share market exceeded 3 trillion yuan for the first time in history, with the information technology sector seeing net financing purchases of over 100 billion yuan in the past month. However, the ratio of this balance to the A-share market's circulating market capitalization is about 2.83%, still significantly below historical peaks.
Key Market Themes and Analysis
From a strategic perspective, Zheshang Securities believes that, in the medium term, technology manufacturing sectors like semiconductors and communications possess certainty driven by supply-demand imbalances. Simultaneously, driven by demand from hard tech, cyclical sectors like non-ferrous metals and chemicals have pricing power certainty. Furthermore, with average daily turnover and margin trading balances remaining high, the securities brokerage sector benefits from strong performance coupled with low valuations, presenting a relatively clear opportunity for recovery.*
Southbound Capital Flows Accelerate into Hong Kong Hard Tech
Today, Hong Kong hard tech staged a dramatic rebound. Major wafer foundry giants Huahong Grace and SMIC soared together. The Huabao Hang Seng Hong Kong Stock Connect Information Technology ETF (159131), the largest and most liquid fund of its type*, surged as much as 5% intraday, closing up 4.57% with a record single-day turnover of 3 billion yuan since its listing. On the capital flow front, this ETF attracted significant interest for two consecutive days: following an 81.29 million yuan inflow on a dip yesterday, it saw massive subscriptions of 189 million shares today, with a net subscription of 159 million shares, highlighting strong confidence in the hard tech theme.
Fundamentally, southbound capital is accelerating its accumulation of Hong Kong hard tech leaders. Over the past five days, seven of the top ten companies receiving southbound capital inflows are constituents of the ETF's underlying index. Among them, Kingboard Laminates Holdings, Kingboard Holdings, Zhipu AI, SMIC, and Huahong Grace received net inflows of approximately 9.227 billion, 6.305 billion, 5.618 billion, 3.134 billion, and 1.343 billion Hong Kong dollars, respectively, over five days. The enthusiasm of southbound capital for Hong Kong hard tech stocks is resonating with the ETF's strong fundraising.
Looking ahead to the second half of the year, Galaxy Securities notes that the Chinese economy may continue to exhibit a pattern of "intensifying structural differentiation while maintaining growth resilience." During this critical period of transitioning between old and new economic drivers, the robust growth and export resilience of the new economy, represented by AI, high-end manufacturing, and new energy, are the main forces supporting the achievement of annual economic targets. The comprehensive implementation of the "AI+" action is a key policy focus for the second half. Investment and demand in AI infrastructure and application layers are expected to maintain high growth, and following the global AI investment cycle, the export competitiveness of AI-related hardware remains strong, suggesting strong export resilience in the latter half of the year.
Over the past six months, the CSI Hong Kong Stock Connect Information Technology Composite Index, tracked by the Huabao Hang Seng Hong Kong Stock Connect Information Technology ETF (159131), has gained 29.8%, outperforming the Hang Seng Tech Index by over 50%, the Hong Kong Stock Connect Tech Index by 44%, and the Hong Kong Stock Connect Internet Index by over 64%, demonstrating superior sharpness and elasticity.
TSMC Price Hikes Ignite Market; Advanced Packaging Activity Heats Up
The electronics sector led the market, attracting a net main fund inflow of 76.1 billion yuan for the day, ranking first among the 31 Shenwan primary industries in terms of capital attraction. JCET and Luxshare Precision received net main fund inflows of 8.2 billion and 4.3 billion yuan, respectively, taking the top two spots on the A-share capital attraction list.
Among popular ETFs, the Huabao Electronic ETF (515260), which encompasses hot concepts like PCBs and advanced packaging, staged a strong rebound, with its on-exchange price surging 4.57% to approach its historical high. Its daily turnover reached 124 million yuan, a 30% increase from the previous session.
Accompanying the hot market, capital is actively entering. Data from the Shanghai Stock Exchange shows the Huabao Electronic ETF (515260) has seen net inflows for three consecutive days, totaling 98.51 million yuan. Over a longer period, it has attracted 154 million yuan in the past 20 trading days.
Among its constituents, Lens Technology, Hangzhou Changchuan Technology, and three other stocks hit the daily limit-up. GigaDevice, JCET, Sanan Optoelectronics, and others reached new historical highs. XTC New Energy Materials rose nearly 11%, while Luxshare Precision, Shengyi Technology, SMIC, and others followed with significant gains.
Fundamental catalysts for the electronics sector are emerging from multiple directions, with two key positive developments:
1. TSMC Potentially Raising Prices Across the Board: Advanced packaging activity is heating up, with JCET topping the A-share capital attraction list. Reports suggest TSMC has begun notifying customers of price increases for wafer fabrication. The hikes are expected to cover not only the previously rumored 3nm process but also all advanced processes at 7nm and below, with overall increases of about 5% to 10%. Aijian Securities points out that advanced packaging is evolving from a traditional back-end process to a front-end-like one, with increasing process complexity and value. The industry overall shows a trend of high growth parallel with import substitution.*
2. PCB Concept Stocks Stage Collective Rebound: Stocks like Shengyi Electronics and Shengyi Technology rose together. On one hand, market rumors about "Nvidia asking PCB manufacturers to cut prices by 10%" have been debunked, as high-end capacity remains tight, giving PCB makers stronger bargaining power. On the other hand, rising prices for upstream raw materials like electronic cloth and electronic resin are driving price increases for copper-clad laminates, with smooth transmission through the industrial chain.
According to Everbright Securities, the high-end PCB industry chain is generating strong profit effects. Upstream electronic cloth and copper foil companies have full order books and record-high profits. Midstream CCL manufacturers hold pricing power, with profit margins expanding. Downstream high-end PCB enterprises are seeing increased value per unit, with prices and profits steadily rising. As Rubin servers approach mass production and delivery, companies with advanced technological positioning are expected to see earnings elasticity.*
Looking ahead, Dongwu Securities notes that for the A-share market, July will usher in a密集 window for semi-annual earnings previews, where growth will be the core pricing factor.* The AI hardware industrial chain, a major focus of the electronics sector, is one of the areas where growth线索 are concentrated for the 2026 semi-annual reports.
CXO Leads the Rebound; High-CXO ETF 159137 Surges 5.44% Intraday
Hong Kong Stock Connect healthcare stocks staged a long-awaited strong rally, with the innovative drug industrial链 rebounding powerfully. CXO companies led the charge: Asymchem Laboratories soared 13.12%, followed closely by GenScript Biotech's 11.5% gain. WuXi XDC, WuXi AppTec, and WuXi Biologics, all weighty leaders in the "WuXi系," rose 8.88%, 8.33%, and 4.17%, respectively.
The Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), with over 40% of its portfolio in leading CXO companies, demonstrated high elasticity with an intraday peak gain of 5.44%. It closed up 4.35%, reclaiming both its 5-day and 10-day moving averages, with a turnover of 65.31 million yuan, the highest in nearly four months.
As the mid-year reporting season approaches, several institutions have highlighted investment opportunities in the CXO sector. Huafu Securities explicitly emphasized the strategic allocation value of CXO for the full year, citing three key reasons:
1) Solid Performance/Orders: Leading CDMOs are expected to continue their strong performance into Q2, with favorable order trends; domestic demand for CXO services shows strong order growth, with prices/gross margins continuing to recover.
2) Catalysts Present: Oral GLP-1 molecules are expected to generate strong order demand. Looking forward, robust demand for new molecules like Pan-RAS, triple-target, Amylin, cyclic peptides, bispecific/multispecific antibodies, and small nucleic acids is likely to drive continued industry growth.
3) Low Valuations: Most companies have a 2026 PEG below 1x, with WuXi AppTec's 2026 P/E below 15x.
Turning to the Hong Kong Stock Connect innovative drug sector, stocks rebounded broadly. Haisco Pharmaceutical Group led with a 12.5% gain, followed by Kelun-Biotech's 6.13% rise. Weighty leaders like Innovent Biologics, BeiGene, and CSPC Pharmaceutical Group all closed higher.
The Huabao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880), a pure play on innovative drug R&D, touched a high of 3.94% before closing up 2.36%, with turnover surging to 669 million yuan, a two-month high.
Analysis suggests that with the ESMO and WCLC conferences approaching in Q3, domestic innovative drugs are expected to regain global spotlight, with their clinical value likely becoming more apparent. Furthermore, the realization of innovative R&D value in the second half of the year is expected to further push the overall valuation center upward. Currently, many high-quality companies have corrected close to previous lows, suggesting potential opportunities for逢低配置.
To actively capture the rebound opportunities in Hong Kong Stock Connect healthcare, consider two T+0 instruments:
For exposure to the innovative drug industrial链 (including CXO), consider the Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), with a current "CXO含量" of 45.17%, while also covering leaders in innovative drugs, AI healthcare, and medical devices (including brain-computer interfaces).
For pure exposure to innovative drugs, consider the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880), which excludes CXO and invests 100% in innovative drug R&D companies, with its top ten holdings accounting for over 70% of the portfolio, highlighting its龙头属性.
*Note: The Huabao STAR Chip ETF (589190) has a management fee of 0.3% and a custody fee of 0.08%, resulting in a total expense ratio of 0.38%, which is relatively low among ETFs tracking the same underlying index.
*Note: As of June 16, 2026, the Huabao Hang Seng Hong Kong Stock Connect Information Technology ETF (159131) had an on-exchange规模 of 1.337 billion yuan, making it the largest among the 8 ETFs tracking the CSI Hong Kong Stock Connect Information Technology Composite Index. Its year-to-date average daily turnover was 565 million yuan.
*Note: Fund fee details are available in respective fund legal documents. Institutional views are sourced from the referenced reports. All data is截至 June 24, 2026, unless otherwise stated. Index and fund performance is historical and not indicative of future results. Investment involves risks.
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