The AI application sector, previously at a low point in the tech space, experienced a sudden surge today (July 10th). The Big Data ETF Huabao (516700), which is deeply linked to domestic computing power (IDC, servers) and AI applications, saw its intraday gain climb as high as 5.22% and is currently up 2.97%. The Software Development ETF Huabao (159036), targeting the forefront of AI applications, jumped 3.95% intraday and is now up 2.03%. Meanwhile, the Information Technology Innovation ETF Huabao (562030), focused on the field of independent and controllable IT, rose over 4% during the session and is currently up 1.22%. All three ETFs are on track for their third consecutive daily gain.
The top three performing constituents of the Big Data ETF by real-time gains are: Zhongke Xingtu, up over 9%; Unisplendour Corporation Ltd, up more than 8%; and Inspur Electronic Information Industry Co., Ltd, up over 6%. For the Software Development ETF, the top gainers are: Zhongke Xingtu, up over 9%; Aerospace Software Co., Ltd and Neusoft Corporation, both up more than 6%. The leading performers for the Information Technology Innovation ETF are: Neusoft Corporation and Inspur Electronic Information Industry Co., Ltd, both up over 6%, and Sugon Information Industry Co., Ltd, up more than 5%.
Key Catalysts Behind the Rally
The rally is attributed to three major positive catalysts: 1) OpenAI and Meta both unveiled their next-generation large language models on the same day; 2) SpaceX AI announced it will make Grok 4.5 available to the public; 3) On the funding front, MiniMax completed a new financing round of 16 billion Hong Kong dollars.
Financial institutions have expressed optimism about the future of AI applications, suggesting their commercialization process is likely to accelerate.
Huaxin Securities noted that AI large language models are still in a phase of rapid iteration, with significant room for improvement in text processing, programming, and other capabilities for both domestic and international models. Potential breakthroughs in multimodal AI and physical AI could further raise the ceiling for AI applications. The firm recommends continued focus on investment opportunities in AI applications and computing power.
Wanlian Securities views the competition in AI large language models as shifting from a focus on sheer parameter scale and general capabilities towards a more comprehensive stage involving application scale expansion and Agent ecosystem development. It suggests paying attention to large model providers with strong overall capabilities and leading companies with robust Agent products in specific verticals. From a medium- to long-term perspective, the firm advises continued focus on the two major investment themes of the AI industry and the data industry.
China Galaxy Securities believes that as model capabilities improve, calling costs decrease, and multimodal tools mature, AI applications are expected to accelerate their penetration into scenarios like content creation, marketing, e-commerce, and gaming, bringing incremental opportunities to related industry chains.
Investment Vehicles for Exposure
Regarding investment tools, the Big Data ETF Huabao (516700) passively tracks the CSI Data Index. It is deeply linked to domestic computing power (IDC, servers) and the AI application field, covering the entire data technology process, including big data storage, production, analysis, operation platforms, and applications. This provides a better reflection of the overall development of China's big data industry. The CSI Data Index encompasses popular concepts. As of the end of May, the weight allocations for its constituents related to cloud computing, IDC (computing power leasing), computing power, and AI applications were approximately 88.41%, 44.80%, 43.97%, and 27.84%, respectively.
The Information Technology Innovation ETF Huabao (562030) and its feeder funds (Class A: 024050, Class C: 024051) passively track the CSI Information Technology Innovation Index. This index focuses on the field of independent and controllable information technology, covering core segments of the IT innovation industry chain such as basic hardware, basic software, application software, information security, and peripherals. Its major holdings include leaders in storage chips (e.g., BIWIN Storage Technology Co., Ltd, Longsys Electronics Co., Ltd), domestic computing power (e.g.,
The Software Development ETF Huabao (159036) passively tracks the Software Development Index, targeting cutting-edge AI application areas. It provides 100% exposure to the software development industry, comprising 108 constituent stocks. The software development sector currently offers relatively attractive valuation and a higher margin of safety. Combined with the empowerment from AI and the drive from IT innovation, the software development direction is poised to rise. As of the end of May, the weight allocations for its constituents related to AI applications (e.g., iFLYTEK Co., Ltd.), cloud computing (e.g., TalkingData Group Holding Limited), IT innovation industry (e.g., Sangfor Technologies Inc.), fintech (e.g., Zhejiang Hexin Flush Network Information Co., Ltd.), cybersecurity (e.g., Baosight Software Co., Ltd), and the HarmonyOS ecosystem (e.g., AsiaInfo Technologies Limited) were approximately 46.58%, 43.50%, 42.36%, 29.90%, 15.72%, and 14.29%, respectively.
Risk Disclosure
The Big Data ETF Huabao passively tracks the CSI Big Data Industry Index. The base date for this index is December 31, 2012, and it was published on October 18, 2016. The Information Technology Innovation ETF Huabao passively tracks the CSI Information Technology Innovation Index. The base date for this index is December 29, 2017, and it was published on December 21, 2012. The Software Development ETF Huabao passively tracks the CSI All Share Software Development Index. The base date for this index is December 31, 2021, and it was published on March 29, 2023. The composition of the index constituents is adjusted in accordance with the index compilation rules, and its historical backtested performance does not indicate future index performance. The index constituents and individual stocks mentioned in this article are for illustrative purposes only. Descriptions of individual stocks are not intended as any form of investment advice and do not represent the holdings or trading trends of any fund managed by the fund manager. The fund manager has assessed the risk rating of the Big Data ETF Huabao, Information Technology Innovation ETF Huabao, and Software Development ETF Huabao as R3-Medium Risk, suitable for Balanced (C3) and higher risk profile investors. Please refer to the sales institution for the final suitability assessment. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must be responsible for any independent investment decisions. Furthermore, any views, analysis, or predictions in this article do not constitute investment advice of any kind to the reader, and no liability is assumed for any direct or indirect losses arising from the use of this content. Fund investment involves risks. The past performance of a fund is not indicative of its future performance. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest with caution in funds.
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