On the morning of August 8, Hong Kong's three major stock indices opened lower collectively, with the Hang Seng Index down 0.45% and the Hang Seng Tech Index down 0.83% at the open. After the market opened, the largest A-share ETF tracking the same sector, the Hang Seng Tech Index ETF (513180), followed the indices downward, with most of its holdings declining. SMIC, Kingdee International, Horizon Robotics, and ASMPT led the losses, with SMIC dropping over 5% at one point.

On the news front, SMIC released its Q2 earnings on August 7. The financial report showed that Q2 2025 revenue was $2.209 billion, down 1.7% quarter-on-quarter (QoQ), while gross profit was $450 million, down 11.1% QoQ. Gross margin stood at 20.4%, a decline of 2.1 percentage points. Additionally, SMIC provided guidance for Q3 2025, expecting revenue to grow 5% to 7% QoQ under IFRS, with gross margin projected between 18% and 20%.

CITIC Securities pointed out that the current bottleneck in domestic computing power lies mainly on the supply side, and SMIC is a core player in achieving self-sufficiency. The wafer fabrication industry exhibits a strong "Matthew Effect," and SMIC's process technology iteration currently leads domestic peers by over two years. Given the increasing difficulty of future R&D iterations, the company holds significant advantages in terms of core team expertise, accumulated experience, capital investment, and customer support, positioning it to maintain its domestic leadership.

Recently, expectations for a Fed rate cut have significantly rebounded, suggesting continued improvement in overseas liquidity. As of this writing, the CME FedWatch Tool indicates a more than 90% probability of a 25-basis-point rate cut at the September FOMC meeting. Against this backdrop, the Hong Kong stock market, particularly the tech sector, is expected to benefit significantly. Currently, the Hang Seng Tech Index remains in a historically undervalued range and is more sensitive to shifts in the China-U.S. interest rate differential, making it well-positioned to benefit from looser overseas liquidity. Additionally, the Hang Seng Tech Index is characterized by high volatility and high growth potential, meaning it could exhibit stronger upward momentum once market conditions improve. Investors without a Stock Connect account may consider the Hang Seng Tech Index ETF (513180) as a one-click way to gain exposure to China’s core AI assets.