Since entering 2026, southbound capital has continued to increase its holdings in the Hong Kong stock market, following the record-breaking net inflow of HK$1.4 trillion set in 2025. According to Wind data, as of January 30, the cumulative net inflow of southbound funds for the first month of 2026 has already reached HK$68.972 billion. Leading ETF provider Huabao Fund, with assets under management exceeding one hundred billion, today (February 2) initiated the fundraising and initial offering of the market's first-ever Hong Kong Stock Information Technology ETF Feeder Fund (026755), focusing on the "Hong Kong stock chip" industry chain. The underlying Hong Kong Stock Information Technology ETF (159131) is the first ETF product in the market tracking the CSI Hong Kong Stock Connect Information Technology Composite Index (referred to as "HKSC Info C"). Its target index comprises a portfolio of 42 Hong Kong-listed hard-tech companies from the information technology sector. This fund will provide another innovative fund tool for off-exchange investors to participate in and capture investment opportunities in Hong Kong's "Chinese hard-tech assets."

The unique target index focuses intently on the Hong Kong stock chip industry chain. Presently, "investment sharpness" has become a crucial label for cutting-edge hard-tech industries led by chips. It's destined to shine! The Hong Kong Stock Information Technology ETF (159131) and its feeder fund (026755) track the CSI Hong Kong Stock Connect Information Technology Composite Index (930967.CSI, "HKSC Info C"). This index selects constituents related to the primary "Information Technology" sector from the CSI Hong Kong Stock Connect Composite Index. By sub-sector, the index constituents are composed of approximately "70% hardware + 30% software," heavily weighted towards Hong Kong stocks in "Semiconductors + Electronics + Computer Software." The composition of this index primarily involves upstream computing power and downstream applications, characterized by a significant allocation to the hardware segment. Compared to general Hong Kong tech indices, the HKSC Information Technology Index excludes large-cap internet enterprises like Alibaba, Tencent Holdings, and Meituan, resulting in a sharper, more focused index that is more adept at capturing the AI hard-tech trend in Hong Kong stocks.

As of the end of December 2025, the HKSC Info C index constituents covered 42 Hong Kong-listed hard-tech companies. Among them, the domestic chip leader, SMIC, had a weight of 15.32%; Xiaomi Group had a weight of 14.21%; and HUA HONG SEMI had a weight of 5.88%. The combined weight of the index's top five constituents reached 50%, while the top ten constituted 71%, indicating a high concentration of heavyweight stocks that aligns well with the objective principle of the龙头 effect in the tech industry, making it suitable for capturing the long-term growth opportunities of leading companies. The index's compilation rules set a maximum weight cap of 15% for any single constituent; however, weights fluctuate with changes in individual stock market capitalization and may occasionally exceed 15%. The index sample is reviewed and adjusted semi-annually, at which point the weight of any single constituent generally rebalances towards the 15% cap.

The core strength of hard tech is demonstrated by significant excess returns. According to statistics from listed company quarterly reports, both operating revenue and net profit for domestic semiconductor industry chain companies listed in China saw significant growth in the first three quarters of 2025. During this period, the combined operating revenue of 167 A-share (CITIC) semiconductor industry listed companies reached RMB 547.18 billion, an 11.2% increase from RMB 492.06 billion in the same period of 2024. The combined net profit for these 167 companies in the first three quarters of 2025 was RMB 43.26 billion, a substantial 39.3% increase from RMB 31.05 billion a year earlier. Among them, SMIC led with operating revenue of RMB 49.51 billion in the first three quarters of 2025, and its net profit attributable to shareholders of RMB 3.818 billion also ranked first. It is reported that SMIC will publicly disclose its fourth-quarter 2025 results on February 10.

In recent years, the leapfrog development of the domestic hard-tech industry, spearheaded by chip technology, has also strongly supported the market performance of the HKSC Info C index. From December 30, 2022, to December 31, 2025, the HKSC Info C index achieved a cumulative gain of 71.33%, significantly outperforming the同期 gains of other Hong Kong tech indices such as the Hang Seng Tech Index (34.29%), the Hong Kong Stock Connect Internet Index (17.52%), and the Hong Kong Stock Connect Tech Index (39.21%). The maximum drawdown of the HKSC Info C index during the same period was -36.31%, which was also better than the respective maximum drawdowns of the Hang Seng Tech Index (-37.55%), Hong Kong Stock Connect Internet Index (-48.49%), and Hong Kong Stock Connect Tech Index (-43.39%).

For the full year of 2025, Hong Kong IPO fundraising amounted to HK$285.6 billion, a massive 224% increase from HK$88.1 billion in 2024, reclaiming the top spot in the global IPO market after a four-year hiatus. Particularly notable was the active participation of international long-term funds from Europe, the US, the Middle East, and emerging markets in the new share issuances of Hong Kong's tech and innovation enterprises, reflecting the high level of international attention and confidence in China's technological innovation. Behind the回流 of foreign capital lies a profound shift in global asset allocation logic. For the entirety of 2025, southbound capital net purchases accumulated to a record HK$1,404.8 billion for a single year, further underscoring the growing demand from domestic capital to allocate to Hong Kong stocks. In the future, the Hong Kong market is expected to continue welcoming more high-quality Chinese hard-tech companies for listing, and accessing index investments makes it easier to capture the beta advantages of Hong Kong IPOs. As of December 31, 2025, the price-to-earnings (P/E) ratio of the HKSC Info C index was 33.98 times, sitting at the 36.76th percentile over the past three years, significantly lower than major global tech indices like the ChiNext Index and the Nasdaq. Among the index constituents, the H-share valuations of A+H hard-tech companies, represented by SMIC, are substantially lower than their A-share counterparts. By accessing the Hong Kong IT ETF and its feeder fund, investors can more readily capture the potential growth space offered by the A-H share valuation gap.

According to statistics from the Shanghai and Shenzhen Stock Exchanges, as of January 30, 2026, the equity ETF assets under management of Huabao Fund had repeatedly reached new highs, standing at RMB 143.351 billion, ranking 9th in the entire industry. Through continuous investment and meticulous layout around high-tech strategic emerging industries, Huabao Fund has currently formed an AI industry chain ETF matrix covering computing power, large models, and applications. Its key products include the ChiNext AI ETF Huabao (159363)—the largest and most liquid AI ETF focused on the overseas computing power theme within the STAR and ChiNext market—the market's first Hong Kong IT ETF (159131) concentrating on the Hong Kong stock chip chain, the STAR Chip ETF Huabao (589190) deployed on the STAR Market chip chain, the STAR AI ETF covering the domestic computing power theme, the Big Data ETF Huabao, the Intelligent Manufacturing ETF, the Xinchuang ETF Fund, the Hong Kong Internet ETF primarily targeting large models, the Electronics ETF covering AI applications, the FinTech ETF, the General Aviation ETF Huabao, the Hong Kong Stock Connect Auto ETF Huabao, and other products.

Special reminder: Recent market volatility may be significant, and short-term price fluctuations do not indicate future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management.

ETF fund fee-related explanation: When investors subscribe for or redeem fund units, the subscription/redemption agent may charge a commission of up to 0.5%, which includes relevant fees charged by the stock exchange, registration机构, etc. For feeder fund fee rates, please refer to the fund's legal documents.

Note: "First in the market" refers to the Hong Kong IT ETF and its feeder fund being the first ETF and feeder fund in China, respectively, to track the CSI Hong Kong Stock Connect Information Technology Composite Index. As of January 30, 2026, there are 8 AI-themed ETFs tracking the ChiNext Board, 10 tracking the STAR Market, and 7 tracking the STAR & ChiNext AI theme. Among these, the ChiNext AI ETF Huabao (159363) has a size of RMB 6.492 billion and an average daily turnover exceeding RMB 700 million over the past six months, making it the largest and most liquid product in its category.

Data source: Shanghai Stock Exchange, Shenzhen Stock Exchange, HKEX, etc.

Risk提示: The Hong Kong IT ETF and its feeder fund passively track the CSI Hong Kong Stock Connect Information Technology Composite Index. The index's base date is November 14, 2014, and it was launched on June 23, 2017. The index's annual historical returns from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Index constituents are adjusted according to the index's compilation rules, and its backtested historical performance does not indicate future index performance.

The fund manager has assigned a risk rating of R4-Medium-High Risk to the Hong Kong IT ETF and its feeder fund, the STAR Chip ETF Huabao, the Hong Kong Internet ETF, the ChiNext AI ETF Huabao, the STAR AI ETF Huabao, and the Hong Kong Stock Connect Auto ETF Huabao, making them suitable for Aggressive (C4) and higher risk profile investors. The fund manager has assessed the risk rating of the FinTech ETF, Intelligent Manufacturing ETF, Xinchuang ETF Fund, Big Data ETF Huabao, Electronics ETF, and General Aviation ETF Huabao as R3-Medium Risk, suitable for Balanced (C3) and higher risk profile investors.

The above funds are issued and managed by Huabao Fund. Selling agencies do not bear the investment, payment, and risk management responsibilities for the products. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Summary," and other fund legal documents to understand the fund's risk-return characteristics and choose products that match their own risk tolerance. Selling institutions (including the fund manager's direct sales channels and other selling institutions) conduct risk assessments of the above funds based on relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by selling institutions and base their decisions on the matching results. Appropriateness opinions from different selling institutions may not necessarily be consistent, and the fund product risk等级评价 results issued by fund selling institutions shall not be lower than the risk等级评价 results made by the fund manager. The description of fund risk-return characteristics in the fund contract may differ from the fund's risk rating due to different consideration factors. Investors should understand the risk-return profile of the fund and carefully select fund products based on their investment objectives, time horizon, investment experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of the above funds does not indicate its substantive judgment or guarantee of the funds' investment value, market prospects, or returns. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors are responsible for any independent investment decisions they make. Furthermore, any views, analysis, or predictions in this article do not constitute investment advice of any form to readers, nor shall they be held responsible for any direct or indirect losses arising from the use of the content herein. The past performance and net asset value of the above funds do not预示 their future performance. The performance of other funds managed by the fund manager does not guarantee the performance of the above funds. Funds carry risks, investment requires caution!

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