Key Photoresist Material Supply Disruption from Japan Sparks Rally in Chinese Chip Stocks

Hong Kong's hard tech stocks showed strong momentum during early trading on April 24. HUA HONG SEMI and Nations Technologies Inc. surged over 10%, while SMIC and ASMPT rose more than 7%. The largest and most liquid* Hang Seng Stock Connect Information Technology ETF Hua Bao (159131), which tracks this sector, climbed as much as 2.3% intraday and was last up 2.07%, decisively reclaiming all its key moving averages. Trading volume expanded significantly, with turnover reaching 221 million yuan.

The rally was partly driven by news that Samsung and SK Hynix received notices from Japanese suppliers about a disruption in the procurement of PGME/PGMEA, key raw materials for photoresist. This development appears to have stimulated activity in the semiconductor materials segment at the market open. Central China Securities pointed out that the pace of AI application development in 2026 has overall exceeded expectations, leading to tightness across the computing power industry supply chain. Against the backdrop of constrained overseas chip supply, domestic AI chips are seeing improvements in both performance and production capacity, positioning them to benefit from ongoing market structural shifts and ultimately enhance China's computing power supply capabilities.

Supporting T+0 trading, the Hang Seng Stock Connect Information Technology ETF Hua Bao (159131) is the largest of its kind and the first in the market to focus specifically on the "Hong Kong chip" industry chain. Its offshore feeder fund code is 026755. The underlying index is composed of "70% hardware + 30% software," with significant exposure to Hong Kong-listed "semiconductor + electronics + computer software" companies. It covers 50 hard tech firms listed in Hong Kong, including XIAOMI-W with a 13.25% weighting, SMIC at 12.54%, LENOVO GROUP at 9.04%, and HUA HONG SEMI at 7.09%. The ETF excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher concentration and making it easier to capture trends in Hong Kong's AI hard tech sector. (Data as of March 31, 2026)

*Source: China Securities Index Company, Shanghai and Shenzhen Stock Exchanges. Note: "First in the market" refers to the fact that the Hang Seng Stock Connect Information Technology ETF Hua Bao (159131) is the first ETF to track the CSI Hang Seng Stock Connect Information Technology Composite Index. As of April 23, 2026, the ETF's on-market size was 508 million yuan, making it the largest among the four listed ETFs tracking the index. Its average daily turnover year-to-date is 120 million yuan.

Fee Information: Subscription and redemption agents for the Hong Kong Information Technology ETF may charge a commission of up to 0.5%. On-market trading fees are subject to the rates set by securities firms. No sales service fee is charged. *Institutional view reference: Central China Securities report titled "Rapid AI Development Creates Overall Computing Power Shortage, Domestic AI Chip Manufacturers Face Significant Opportunities." Risk Warning: The Hang Seng Stock Connect Information Technology ETF Hua Bao and its feeder fund passively track the CSI Hang Seng Stock Connect Information Technology Composite Index, which has a base date of November 14, 2014, and was launched on June 23, 2017. Constituent stocks mentioned are for illustrative purposes only; individual stock descriptions are not investment advice and do not represent the holdings or trading activities of the fund manager. This product is issued and managed by Hua Bao Fund. Distributors are not responsible for the product's investment, redemption, or risk management. Investors should read the "Fund Contract," "Prospectus," and "Fund Product Summary" to understand the fund's risk-return profile and choose a product matching their risk tolerance. Past performance does not indicate future results. The performance of other funds managed by the manager does not guarantee this fund's performance. Invest with caution. The fund manager assesses this fund's risk level as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Sales institutions (including the manager's direct sales channels and other distributors) evaluate the fund's risk per relevant laws and regulations. Investors should pay attention to the appropriateness opinions provided by sales institutions and base decisions on the matching results. Appropriateness opinions may vary among sales institutions, but a sales institution's risk rating cannot be lower than the manager's rating. Differences may exist between the risk-return characteristics described in the fund contract and the risk rating due to different assessment factors. Investors should understand the fund's risks and returns, combine this with their investment objectives, horizon, experience, and risk tolerance, make careful selections, and bear risks independently. CSRC registration does not guarantee the fund's value, prospects, or returns. Funds carry risks; invest cautiously.

A MACD golden cross signal has formed, indicating positive momentum for these stocks.