The performance of various indices and key viewpoints are as follows:

In the Hong Kong market, last week, the Hang Seng Stock Connect China Central SOE Dividend Index rose by 1.10%, the Hang Seng Index increased by 3.38%, and the Hang Seng Tech Index gained 5.80%. In the A-share market, the CSI State-owned Enterprise Dividend Index advanced by 1.79% last week, while the CSI 300 Index declined by 0.42%.

Last week, the Hong Kong stock market exhibited clear characteristics of style rebalancing. The previously strong technology sector experienced volatility at elevated levels, with capital gradually shifting towards dividend assets. Recent heightened volatility in global technology stocks has been a core catalyst, triggered by news that Meta plans to launch cloud infrastructure services and sell AI computing resources to external clients, leading to a sell-off in global tech stocks. This has raised market caution regarding the short-term crowding and valuation bubbles in the technology and growth sectors. Against this backdrop, the technology sector, which had accumulated substantial gains earlier, faces profit-taking pressure. In contrast, central SOE dividend assets, characterized by stable cash flows and high dividend yields, are beginning to attract capital attention due to their defensive attributes, with a market style shift gradually gaining consensus.

Amid this style rotation, the allocation value of Stock Connect central SOE dividend assets in Hong Kong has become even more prominent. These assets primarily cover foundational industries of the national economy such as finance, transportation, and utilities. Their central SOE background endows them with strong operational stability and resilience to economic cycles. During a phase of moderate macroeconomic recovery and stabilizing corporate earnings at the bottom, a high-dividend strategy can provide relatively certain cash returns while also participating in the recovery of pro-cyclical sectors. Against the backdrop of a mild domestic economic recovery, some capital has already begun migrating towards low-valuation, high-dividend yield assets, indicating a periodic rebalancing of market styles. In the current volatile environment, dividend assets, with their stable cash flows and high dividend yields, precisely meet the demand for "certainty premium" sought by capital. As the interim reporting season approaches, performance verification becomes the main theme. The direction of Hong Kong Stock Connect central SOE dividends, which combines a margin of safety with earnings resilience, is becoming a preferred choice for incremental capital reallocation.

Hong Kong Stock Connect central SOE dividend stocks offer higher dividend yields and lower valuations. The Hang Seng Stock Connect China Central SOE Dividend Index has a dividend yield of 6.23% (compared to 5.31% for the CSI Dividend Index), with a price-to-book (PB) ratio of 0.53 and a price-to-earnings (PE) ratio of 6.35. Its total return index has accumulated a return of 111% over the past five years, representing an excess return of 112% relative to the Hang Seng Total Return Index. The CSI State-owned Enterprise Dividend Index has a dividend yield of 5.28%, a PB ratio of 0.78, and a PE ratio of 8.12. Its total return index has accumulated a return of 45% over the past five years, with an excess return of 37% relative to the CSI 300 Total Return Index.

Looking ahead, the low-interest-rate environment under China's domestic rate-cutting cycle and the backdrop of a weak economic recovery are both favorable for dividend strategies. Under the guidance of market value management, central and state-owned enterprises exhibit strong willingness and capability to pay dividends, enhancing the allocation value of products like the Huaan Hong Kong Stock Connect Central SOE Dividend ETF (513920) and the Huaan State-owned Enterprise Dividend ETF (561060).

Introduction to the Huaan Hong Kong Stock Connect Central SOE Dividend ETF (513920)

The Huaan Hong Kong Stock Connect Central SOE Dividend ETF (513920) is the first ETF in the market to combine the attributes of Hong Kong-listed stocks, central SOEs, and dividends. It is also the largest ETF tracking the Hang Seng Stock Connect China Central SOE Dividend Index (HSSCSOY), which encompasses high-quality, high-dividend-yield central SOEs listed in Hong Kong through a single index. Related off-exchange products include: Huaan Hang Seng Stock Connect China Central SOE Dividend ETF Link A (020866) / Link C (020867).

Product Overview of Huaan Hong Kong Stock Connect Central SOE Dividend ETF (513920)

Introduction to the Huaan State-owned Enterprise Dividend ETF (561060)

The Huaan State-owned Enterprise Dividend ETF (561060) tracks the CSI State-owned Enterprise Dividend Index. This index selects 100 stocks from state-owned enterprises with high cash dividend yields, relatively stable dividend payouts, and certain scale and liquidity, reflecting the overall performance of representative high-dividend state-owned enterprises in the A-share market. Related off-exchange products include: Huaan CSI State-owned Enterprise Dividend ETF Link A (020461) / Link C (020462).

Risk Disclosure

The above is merely an objective introduction to the current constituent distribution of the underlying indices and does not constitute any investment advice or guarantee of investment returns. Index companies may subsequently adjust index compilation methodologies; the composition and weighting of index constituents may change dynamically. Please be aware of risks associated with some index constituents having relatively large weights and high concentration.

This fund is an equity fund, belonging to a fund category with relatively high risk and expected returns. It primarily invests in constituent stocks and alternative constituent stocks of the target index. Its feeder fund mainly aims to closely track the performance of the target index by investing in the target ETF. This fund's expected returns and risks are higher than those of money market funds, bond funds, and hybrid funds, exhibiting risk-return characteristics similar to the target index. The fund management company does not guarantee that this fund will be profitable, nor does it guarantee a minimum return. The past performance of the fund does not predict its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Fund product returns are subject to volatility risk; investment requires caution. Please read the fund's contract, prospectus, and other legal documents carefully for details.