On May 28, the market showed extreme divergence, with Hong Kong's hard tech sector staging an intraday V-shaped reversal. Led by the two major wafer foundries, HUA HONG SEMI and Hua Hong Semiconductor Limited, the Hang Seng Stock Connect Information Technology C Index closed up 1.48%, significantly outperforming the Hang Seng Tech Index, which fell 0.43%. The largest and most liquid ETF in its category*, the Huabao Hang Seng Stock Connect Information Technology ETF (159131), surged 2.18% on heavy volume, with a single-day turnover exceeding 2.7 billion yuan, setting a new record high since its listing.

Notably, during the recent two-day pullback, the Huabao Hang Seng Stock Connect Information Technology ETF (159131) saw continuous heavy net inflows totaling over 430 million yuan, with another 5 million fund units subscribed during today's trading session.

Regarding constituent stocks, HUA HONG SEMI surged over 11% to a new all-time high. Foxconn Interconnect Technology and Kingboard Holdings rose over 6%, while Hua Hong Semiconductor Limited, LENOVO GROUP, and Kingboard Laminates were among several stocks gaining over 3%.

A research report from Great Wall Securities points out that the dual drivers of memory capacity expansion and import substitution are ushering in a period of high prosperity for equipment and materials, with opportunities in the domestic supply chain driven by the capacity expansion of local players like YMTC and CXMT. The shortage in the memory industry is expected to persist until 2027, with memory contract prices also likely to continue rising, suggesting sustained high growth for companies in the industry chain.

Soochow Securities believes the AI squeeze effect is reshaping the supply side, creating a structural mismatch in memory supply and demand. The massive demand for AI computing power is not only driving an explosion in HBM demand but is also severely squeezing the effective supply of traditional DRAM due to its extremely high wafer consumption. Simultaneously, the shift by NAND manufacturers towards higher-layer QLC production is leading to a structural tightening of overall capacity. With the strong pull from AI demand and controlled traditional capacity, the supply-demand tightness in the broader memory chip market may persist for several years.

Looking at the performance over the past six months, the underlying index of the Huabao Hang Seng Stock Connect Information Technology ETF (159131)—the CSI Hang Seng Stock Connect Information Technology Composite Index—has gained over 22%. In comparison, the Hang Seng Tech Index and the Hang Seng Stock Connect Technology Index have fallen 12.67% and 11.91%, respectively, highlighting the former's significantly sharper performance and greater resilience.

Statistical period: Dec 28, 2025 - May 28, 2026. The annual historical returns for the Hang Seng Stock Connect Information Technology C Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past index performance is not indicative of future results. T+0 trading is supported! Targeting the Hong Kong stock semiconductor supercycle—the Huabao Hang Seng Stock Connect Information Technology ETF (159131) is the first of its kind in the market, the largest in scale, and the most liquid* ETF tracking this theme. Its feeder fund code is 026755. The underlying index is composed of "70% hardware + 30% software," heavily weighted towards Hong Kong-listed "Semiconductors + Electronics + Computer Software." It covers 52 Hong Kong-listed hard tech companies, with a memory chip weighting exceeding 26%. Notably, the combined weight of Hua Hong Semiconductor Limited and HUA HONG SEMI exceeds 23%, making it the index with the highest weight in advanced wafer manufacturing in the market. The index excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering greater focus and making it more suitable for capturing the Hong Kong AI hard tech trend. (Data as of May 22, 2026)

Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges. Note: "First in the market" refers to the Huabao Hang Seng Stock Connect Information Technology ETF being the first ETF to track the CSI Hang Seng Stock Connect Information Technology Composite Index. As of May 27, 2026, the latest on-exchange size of the ETF is 1.321 billion yuan, making it the largest among the 7 ETFs currently tracking the index. Its average daily turnover year-to-date is 300 million yuan. The annual historical returns of the underlying CSI Hang Seng Stock Connect Information Technology Composite Index from 2021 to 2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30%, respectively. Past index performance is not indicative of future results. Fee Structure: Subscription and redemption agents for the Huabao Hang Seng Stock Connect Information Technology ETF may charge a commission of up to 0.5%. On-exchange trading fees are subject to the actual charges by securities firms. No sales service fee is charged. *Institutional views referenced from: Great Wall Securities report "AI-Driven Memory Price Rally to Continue, Domestic Supply Chain Opportunities from YMTC/CXMT Expansion" and Soochow Securities report "In-Depth: AI Infrastructure Drives Memory Sector Prosperity, Supply-Demand Resonance Highlights Profit Elasticity". Risk Disclosure: The Huabao Hang Seng Stock Connect Information Technology ETF 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 in this material are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form nor do they represent the holdings or trading动向 of any fund managed by the asset manager. This product is issued and managed by Huabao Fund. Distributors do not assume responsibility for the investment, redemption, or risk management of the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other legal documents to understand the fund's risk-return characteristics and choose a product suitable for their own risk tolerance. Past fund performance is not indicative of future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment involves risks! The fund manager assesses this fund's risk等级 as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's direct sales channels and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness assessment opinions provided by distributors and base their decisions on the matching results. Appropriateness opinions from different distributors may not be consistent. The risk等级评价结果 provided by fund distributors shall not be lower than the risk等级评价结果 provided by the fund manager. There may be differences between the fund's risk-return characteristics as described in the fund contract and its risk等级 due to different assessment factors. Investors should understand the fund's risk-return profile and make investment decisions结合 their own investment objectives, horizon, experience, and risk承受能力, bearing the associated risks independently. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.

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