The Hong Kong stock market's hard tech sector maintained its robust performance today (July 9th), with KNOWLEDGE ATLAS (HKEX: 02513) soaring 16%, GigaDevice surging over 10%, and Montage Technology climbing more than 8%. The largest and most liquid* ETF tracking this sector, the HK Stock Connect Information Technology ETF Huabao (159131), which rose nearly 3.5% yesterday, gapped higher at the open and surged another 3.05% today.

On the news front, KNOWLEDGE ATLAS announced the completion of a placement raising approximately HK$31.41 billion. The proceeds will be primarily used for foundational model R&D, computing infrastructure construction, commercialization expansion, and global ecosystem development. The placement received broad subscription from international long-term funds, industrial investors, and professional investment institutions.

Market Analysis and Outlook

Analysis points out that global large language model API call volumes are expected to have increased for 11 consecutive weeks. Domestic models are leading in traffic due to their high cost-effectiveness, while revenue expectations for leading overseas providers have been revised upwards. Domestic firms are accelerating commercialization efforts, with plans for tiered pricing and membership services. In light of compliance and geopolitical factors, the logic for domestic substitution is becoming more prominent.

Across the computing hardware chain, prices are rising. Major chipmakers have announced or are expected to increase prices for consumer and server CPUs. Contract prices for memory are forecast to continue rising in Q3, with supply constraints for server storage projected to persist through 2027. The rise of Agent AI is altering computing cost structures, driving a surge in demand for CPUs and storage, with price increases spreading from GPUs across the entire data center industry chain.

Spotlight on the ETF

This ETF offers rare exposure to "pure" Hong Kong-listed hard tech and supports T+0 trading. As the first and largest ETF of its kind with superior liquidity, its underlying index is composed of "80% hardware + 20% software." It heavily concentrates on Hong Kong stocks in semiconductors, electronics, and computer software, covering 60 hard tech companies. The combined weight of the two major foundry giants exceeds 26%, the leading domestic AI PC maker has a weight over 10%, and the leading PCB manufacturers together hold over 11% weight—all representing the highest exposure available in any index with linked products. Furthermore, the index recently added several promising new Hong Kong-listed hard tech stocks. Notably, the index excludes large-cap internet companies, offering sharper focus and potentially greater capture of Hong Kong's AI hard tech trends.

Important Fund Details

The ETF tracks the CSI HK Stock Connect Information Technology Composite Index. Investors should be aware that the fund's subscription and redemption agents may charge a commission of up to 0.5%, and on-exchange trading fees are subject to the rates set by securities firms. No sales service fee is charged. Past performance of the index is not indicative of its future results.

Risk Considerations

The ETF and its feeder fund passively track the aforementioned index. The presentation of index constituents is for illustrative purposes only and does not constitute investment advice or indicate the fund manager's holdings. The fund is issued and managed by Huabao Fund. Investors are advised to read the fund's legal documents, including the Fund Contract and Prospectus, to understand its risk-return profile and ensure it matches their own risk tolerance. Fund investments carry risks. The fund is rated R4 (medium-high risk) by the manager, suitable for aggressive (C4) and above investors. Sales institutions provide their own risk assessments, which may differ. Regulatory approval of the fund does not guarantee its investment value or future returns.