Market Review and Key Perspectives: In the Hong Kong market last week, the Hang Seng Stock Connect China Central SOE Dividend Index declined by 0.11%, while the Hang Seng Index fell by 3.02%, and the Hang Seng Tech Index dropped by 6.51%. In the A-share market, the CSI State-Owned Enterprise Dividend Index rose by 0.17% last week, whereas the CSI 300 Index decreased by 1.29%.

Recent market activity has shown significant style rotation, with the previously strong tech growth sector and the dividend value style exhibiting a seesaw effect. Following a recent pullback, the dividend sector's advantages of high yield and low valuation have become prominent once again. Coupled with persistently accommodative monetary policy, emerging expectations for a pro-cyclical recovery, and allocation demand from long-term funds such as insurance, the Hong Kong Connect central SOE dividend sector presents investment opportunities.

Expectations for a pro-cyclical recovery are strengthening, continuously solidifying the earnings foundation for central SOEs. As domestic economic operations stabilize overall, traditional pro-cyclical industries such as real estate, transportation, and energy are entering a critical period of marginal improvement in sentiment. In the real estate sector, policy support continues to intensify. The central government has emphasized coordinating high-quality development with high-level security, while local authorities are deepening city-specific measures. Actions including the orderly relaxation of purchase and loan restrictions, dynamic reductions in mortgage rates, accelerated construction of affordable housing, and steady progress on project delivery are being implemented, improving market expectations for a stabilization and recovery in the real estate industry. Against this backdrop, these policy measures may help alleviate cash flow pressures for developers and generate positive spillover effects on related upstream industries such as building materials, infrastructure, and utilities.

Dividend assets offer relatively high value, attracting increased capital allocations recently. Last week's market trends indicated a shift from high-valuation, high-volatility growth sectors towards lower-valuation, relatively stable value assets. In this context, the Hong Kong Connect Central SOE Dividend Index, characterized by its high dividend yield, stable distribution capability, and relatively solid fundamentals, has become an important direction for investor portfolio rebalancing. Simultaneously, the allocation demand for high-dividend assets from long-term funds like insurance and pensions continues to rise, further bolstering capital support for the dividend sector. Enhanced by the convenient cross-border access provided by the Hong Kong Connect mechanism, high-dividend central SOEs listed in Hong Kong have become an effective supplement to A-share dividend strategies.

Hong Kong Connect central SOE dividends offer higher yields and lower valuations. The Hang Seng Stock Connect China Central SOE Dividend Index boasts a dividend yield of 5.70% (compared to 4.80% for the CSI Dividend Index), with a price-to-book ratio of 0.65 and a price-to-earnings ratio of 7.31. Its total return index has accumulated a return of 158% over the past five years, outperforming the Hang Seng Total Return Index by 150%. The CSI State-Owned Enterprise Dividend Index has a dividend yield of 4.76%, a PB of 0.86, a PE of 8.59, and its total return index has gained 74% over the last five years, exceeding the CSI 300 Total Return Index by 78%.

Looking ahead, the low-interest-rate environment within the domestic rate-cutting cycle and the context of a weak economic recovery are both favorable for dividend strategies. Guided by market value management objectives, central and state-owned enterprises demonstrate strong willingness and capability to pay dividends. The Hong Kong Connect Central SOE Dividend ETF (513920) and the State-Owned Enterprise Dividend ETF (561060) present significant allocation value.

Hong Kong Connect Central SOE Dividend ETF (513920) Product Overview: The Hong Kong Connect Central SOE Dividend ETF (513920) is the first ETF in the market to combine exposure to Hong Kong stocks, central SOEs, and dividend attributes. It is also the largest ETF tracking the Hang Seng Stock Connect China Central SOE Dividend Index (HSSCSOY), which comprehensively includes high-quality, high-dividend central SOEs listed in Hong Kong. Related offshore products include: Hua An Hang Seng Stock Connect China Central SOE Dividend ETF Link A (020866) / Link C (020867).

State-Owned Enterprise Dividend ETF (561060) Product Overview: The State-Owned Enterprise Dividend ETF (561060) tracks the CSI State-Owned Enterprise Dividend Index. This index selects 100 stocks from state-owned enterprises based on high cash dividend yield, stable dividend distribution, and certain scale and liquidity, reflecting the overall performance of representative high-dividend SOEs in the A-share market. Related offshore products include: Hua An CSI State-Owned Enterprise Dividend ETF Link A (020461) / Link C (020462).

Risk Disclosure: The above is solely an objective description of the current constituent distribution of the target indices and does not constitute any investment advice or guarantee of investment returns. Index companies may adjust the index compilation methodology subsequently; the composition and weighting of index constituents may change dynamically. Please be aware of risks related to potentially high concentration in certain index constituents with larger weights.

This fund is an equity fund, categorized as having relatively high risk and high expected returns. It primarily invests in constituent stocks and alternative constituent stocks of the target index. Its feeder fund mainly aims to closely track the target index's performance by investing in the target ETF. This fund's expected returns and risks are higher than those of money market funds, bond funds, and hybrid funds, possessing risk-return characteristics similar to the target index. The fund management company does not guarantee that this fund will be profitable, nor does it guarantee a minimum return. The fund's past performance is not indicative of its future results. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Fund product returns are subject to volatility risks. Investment requires caution. Please read the fund's contract, prospectus, and other legal documents carefully for details.