In the morning session of August 29, the semiconductor sector collectively weakened in both A and H markets. In the A-share market, Cambricon fell over 5%, while SMIC dropped over 4%. In the Hong Kong market, Hua Hong Semiconductor declined over 3%, and SMIC fell over 2%. The largest ETF in the same A-share sector, the Hang Seng Tech Index ETF (513180), saw a slight increase. Among its holdings, Hua Hong Semiconductor, Tencent Music, SMIC, and ASMPT led the declines, while Haier Smart Home, Li Auto, and Trip.com Group were among the top gainers.
On the news front, both SMIC and Hua Hong Semiconductor recently released their mid-2025 earnings. According to the financial reports, SMIC's revenue for the first half of the year reached $4.456 billion, a year-on-year increase of 22%. Among this, revenue from wafer foundry business was $4.229 billion, up 24.6% year-on-year. Profit attributable to the company's owners was approximately $320 million, a 35.6% year-on-year increase. In terms of stock performance, both SMIC's A and H shares hit new highs yesterday.
Hua Hong Semiconductor's earnings released last night showed that its revenue for the first half of 2025 reached RMB 8.018 billion, a year-on-year increase of 19.09%, primarily due to higher wafer sales volume and contributions from the mass production of the Hua Hong Manufacturing project. However, net profit attributable to shareholders of the listed company was only RMB 74 million, a significant year-on-year decline of 71.95%, mainly due to the capacity ramp-up costs in the initial phase of the Hua Hong Manufacturing project and continued increases in overall R&D investment. During the reporting period, the company's R&D expenses reached RMB 939 million, a 21.71% year-on-year increase, accounting for 11.99% of its revenue.
The Hang Seng Tech Index previously underperformed compared to the A-share tech sector. With improvements in external liquidity narratives, its upward momentum may become stronger, potentially leading to a "catch-up rally." Investors without a Hong Kong Stock Connect account can gain exposure to China's core AI assets through the Hang Seng Tech Index ETF (513180) with a single click.
