The Hong Kong hard tech sector experienced a volatile session, initially rallying before retreating. The largest and most liquid ETF of its kind, Huabao Hong Kong Stock Connect Information Technology ETF (159131), saw its price surge by as much as 1.98% in early trading before reversing to close down 0.62% on the day. The fund recorded significant trading volume exceeding 2.4 billion yuan and traded at a premium throughout the session, attracting net inflows of 56 million units. Notably, this ETF has been a consistent magnet for capital, with cumulative net inflows over the past five days reaching 566 million yuan.
Regarding the ETF's constituent stocks, 41 declined, 18 advanced, and one remained flat. Hua Hong Grace Semiconductor Manufacturing Ltd and Days Technology both fell more than 7%, while Huaqin Technology and Naxin Microelectronics dropped over 6%. Semiconductor Manufacturing International Corporation (SMIC) slipped nearly 3%. On the positive side, Xiaomi Corporation, Lenovo Group, and Kingboard Laminates Holdings Ltd managed to finish in positive territory.
Timing the Tech Rebound
When might the current technology sector adjustment conclude? Analysis from Huajin Securities suggests that strong industry trends and policy catalysts indicate the TMT (Technology, Media, Telecom) pullback may be nearing its end. Firstly, positive industry catalysts continue to emerge, including sustained global expansion in AI computing demand, the continuous launch of new AI-related products, the potential for high-growth and better-than-expected earnings from global AI companies, and ongoing financing activity for tech firms. Secondly, supportive policies are expected to continue, such as the upcoming 2026 World Artificial Intelligence Conference, the release of the "2026-2028 National Computing Infrastructure Construction Action Plan," and Shanghai's new 13-point "AI + Manufacturing" policy measures.
A Surge in Hong Kong Hard Tech Listings
The Hong Kong IPO market has demonstrated robust activity and vitality this year. Data shows that as of July 22nd, the number of new listings in Hong Kong has surpassed one hundred, with hard tech firms firmly established as the main driving force. This includes companies like Zhipu AI, MiniMax, Biren Technology, Days Technology, and GigaDevice. The trend of "A+H" dual listings continues to gain momentum. Industry observers believe that driven by factors such as deepening system reforms and growing confidence from international capital allocation, Hong Kong's role as a pivotal hub for Chinese hard tech companies going global and for global asset allocation is becoming increasingly solid. Expectations are high for the Hong Kong IPO market to maintain its strong momentum throughout 2026.
Spotlight on the Leading Hard Tech ETF
The Huabao Hong Kong Stock Connect Information Technology ETF (159131) offers a concentrated exposure to Hong Kong's "pure" hard tech sector and supports T+0 trading. As the first and largest ETF of its kind with the strongest liquidity, it tracks the SZSE-HKEx Stock Connect Information Technology Composite Index, which is composed of "85% hardware + 15% software." The fund focuses on Hong Kong-listed "semiconductors + electronics + computer software" and covers 60 hard tech companies. Notably, the combined weighting of the two wafer foundry giants, SMIC and Hua Hong Grace, exceeds 26%. The domestic AI PC leader, Lenovo Group, has a weighting over 10%, and the PCB leaders, Kingboard Holdings and Kingboard Laminates, have a combined weighting over 11%—these are the highest concentrations among all comparable index-linked products in the market. Furthermore, the index incorporated several new Hong Kong hard tech listings on June 15th, including Zhipu AI, Shenghong Technology, Days Technology, and Biren Technology. The index excludes large-cap internet firms like Alibaba, Tencent, and Meituan, offering a sharper, more focused tool to capture the potential of the Hong Kong AI and hard tech thematic investment trend.
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