Across-the-board selloff! Hong Kong hard tech stocks surge then sharp pullback, Hong Kong Information Technology ETF (159131) drops 1.5% as funds flock in, real-time net subscriptions 15 million shares

Today (March 19), A-shares and Hong Kong stocks declined simultaneously. After a sharp rise yesterday, Hong Kong’s hard technology stocks pulled back sharply. The only market-wide Hong Kong Information Technology ETF (159131) opened lower and remained volatile, currently down 1.5%. Notably, during the trading session, there was a real-time net subscription of 15 million shares, indicating a strong willingness among funds to buy on dips.

On the news front, U.S. stocks experienced a fierce sell-off on Wednesday. Unexpectedly high wholesale inflation data combined with Federal Reserve Chair Powell’s cautious comments on inflation outlook dealt a double blow, sharply increasing concerns about persistent inflation.

Galaxy Securities analysts believe that the resilience of Hong Kong stocks comes from their valuation discount, which attracts risk-averse funds seeking certainty. Foreign investors are largely entering Hong Kong stocks because they see a valuation gap between Hong Kong and other major global markets (such as U.S. and Japan). Hong Kong stocks’ low valuations are often accompanied by high dividend yields, which are highly attractive to risk-averse investors seeking stable cash flow.

Looking ahead to the next six months, consumer discretionary is currently the sector with the strongest growth and profitability among all Hong Kong stock sectors, while the financial sector has ample safety margins. The technology sector has shown dual characteristics amid this turbulence.

Focusing on the Hong Kong chip super cycle! The first T+0 Hong Kong chip industry chain ETF— the Hong Kong Information Technology ETF (159131), which is the only ETF in the market focusing on the “Hong Kong chip” industry chain, tracks an index composed of 70% hardware and 30% software, heavily weighted in Hong Kong-listed “semiconductors, electronics, and computer software.” It includes 45 Hong Kong hard tech companies, with SMIC (Semiconductor Manufacturing International Corporation) weighting at 14.07%, Xiaomi Group-W at 12.41%, and Huahong Semiconductor at 7.47%. Excluding large-cap internet giants like Alibaba, Tencent, and Meituan, the ETF has a sharper focus and is more capable of capturing the AI hard tech rally in Hong Kong stocks. (As of March 11, 2026)

Data source: China Securities Index Co., Ltd., Shanghai and Shenzhen Stock Exchanges.

Note: “The only in the market” refers to the only ETF tracking the CSI Hong Kong Stock Connect Information Technology Composite Index.

Institutional opinion source: China Merchants Securities “NVIDIA GTC 2026 Tracking Report”;

Fund fee disclosure: The Hong Kong Information Technology ETF’s subscription and redemption agents may charge a commission of up to 0.5%. On-market trading fees are based on the actual charges by securities firms. No sales service fee is charged.

Risk warning: The Hong Kong Stock Connect Information Technology ETF passively tracks the CSI Hong Kong Stock Connect Information Technology Composite Index, which was launched on November 14, 2014, and published on June 23, 2017. The index components shown in this material are for display purposes only; individual stock descriptions are not investment advice and do not represent holdings or trading trends of any fund managed by the fund manager. This product is issued and managed by Huabao Fund, and the distribution agency does not assume responsibility for investment, redemption, or risk management. 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 products suitable for their risk tolerance. Past performance does not predict future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Investment in funds should be cautious! The risk level of this fund, assessed by the fund manager, is R4—moderate to high risk, suitable for aggressive (C4) and above investors. Sales institutions (including the fund manager’s direct sales channels and other sales agencies) evaluate the risk of this fund according to relevant laws and regulations. Investors should pay attention to the suitability opinions issued by sales agencies and rely on their matching results. Different sales agencies may have different opinions on suitability, and the risk rating provided by the sales agency should not be lower than the fund manager’s assessment. The fund contract may specify different risk-return characteristics and risk levels due to differing considerations. Investors should understand the fund’s risk-return profile, consider their own investment objectives, horizon, experience, and risk capacity, and choose fund products carefully, bearing the risks themselves. The China Securities Regulatory Commission’s registration of this fund does not imply any substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; invest cautiously!