The AI sector staged a strong rebound yesterday (February 9), with the HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD ARTIFICIAL INTELLIGENCE TRADING OPEN ENDED INDEX SEC (589520), which has over 29% exposure to ByteDance's supply chain, soaring 4.57% in intraday trading. This surge allowed the ETF to reclaim its 5-day moving average, while daily trading volume approached 50 million yuan, marking a 39% increase from the previous session.
Among the constituent stocks, VeriSilicon Microelectronics led the gains with an increase of over 14%, followed by Haitian Ruisheng, which rose more than 10%. Fudan Microelectronics advanced over 9%, while Montage Technology, Yuntian Lifei, Cloudwalk Technology, and Cambricon Technologies also posted significant gains.
The catalyst for this uptick was ByteDance's release of the Seedance2.0 video generation model on its Dream platform, which has sparked widespread evaluation and discussion within the AI industry due to its impressive performance. Seedance2.0 can create cinematic-quality videos from text or images. By simply providing a detailed prompt or uploading a picture, users can generate multi-shot sequence videos with native audio in under 60 seconds.
Additionally, users can experience Seedance2.0 through the Xiao Yunque app, which offers three free trials. Seedance2.0 Fast is also set to launch soon. Xiao Yunque AI, developed by ByteDance's CapCut team, is an AI-powered video and image creation assistant designed as a "zero-threshold" tool. It enables ordinary users to automate the entire creative process—from idea generation and scriptwriting to material creation, audio synthesis, and video editing—by simply entering a sentence or a link.
BOC Securities highlighted that the functional breakthroughs achieved by Seedance2.0 are highly significant for advancing AI multimodal applications, particularly in video generation. The model substantially reduces both the cost and technical barriers associated with producing AI-generated content such as animated series, while significantly improving production efficiency. Moreover, the high computational demands of multimodal generation are expected to benefit upstream hardware infrastructure. Seedance2.0 is driving growth across the AI multimodal industry, with multiple factors potentially catalyzing a rebound in AI applications. Investors are advised to monitor opportunities in AI applications, cloud services, storage, and computing power within the AI supply chain.
Notably, ByteDance is a leading player in China's AI sector, with its subsidiary Volcano Engine serving as the exclusive AI cloud partner for the 2026 Spring Festival Gala. Constituent stocks of the HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD ARTIFICIAL INTELLIGENCE TRADING OPEN ENDED INDEX SEC, such as Cambricon Technologies, Montage Technology, and Bestechnic, have established deep collaborations with ByteDance. As of the end of January 2026, ByteDance's supply chain accounted for 29.42% of the ETF's weighting.
On the policy front, the Ministry of Industry and Information Technology has outlined plans to advance the construction of a national computing power interconnection node system. Cinda Securities noted that, from an industry trend perspective, investments in AI computing power remain robust, and the profitability of AI companies is gradually strengthening. This improvement is expected to translate into sustained performance for related firms in the supply chain.
Kaiyuan Securities suggested that competition among internet giants for AI traffic portals is intensifying. The integration and synergy of multiple business lines, coupled with AI empowerment, could drive both performance and valuation growth. The firm emphasized the importance of monitoring AI commercialization and the expansion of application scenarios. As open-source models continue to improve, demand for AI cloud services is likely to be validated.
As a key component of the national "AI+" initiative, achieving autonomy and control in AI technology is critical. The HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD ARTIFICIAL INTELLIGENCE TRADING OPEN ENDED INDEX SEC and its feeder funds (Feeder A: 024560, Feeder C: 024561) focus on China's AI industry chain. The ETF's holdings include leading domestic GPU manufacturers like Cambricon Technologies, top ASIC producers such as VeriSilicon Microelectronics, and AI application leaders like Kingsoft Office. The top ten holdings account for nearly 70% of the portfolio, with the semiconductor sector making up almost half of the weighting, indicating strong growth potential. The software sector, representing over 30% of the portfolio, stands to benefit from a potential catch-up rally in AI applications. Additionally, the ETF is eligible for margin trading, offering an efficient tool for gaining exposure to domestic computing power.
Risk Warning: The HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD ARTIFICIAL INTELLIGENCE TRADING OPEN ENDED INDEX SEC passively tracks the Shanghai Stock Exchange Science and Technology Innovation Board Artificial Intelligence Index. The index has a base date of December 30, 2022, and was launched on July 25, 2024. Its annual returns for 2023 and 2024 were 12.68% and 32.36%, respectively. The composition of the index is adjusted periodically according to its methodology, and past performance does not indicate future results. Individual stocks and index constituents mentioned are for illustrative purposes only and do not constitute investment advice or reflect the holdings or trading activities of the fund manager. The fund manager has rated the HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD ARTIFICIAL INTELLIGENCE TRADING OPEN ENDED INDEX SEC as R4—moderately high risk, suitable for aggressive (C4) and higher-risk investors. Suitability assessments should be confirmed with selling institutions. All information provided is for reference only, and investors are responsible for their own investment decisions. No views, analyses, or forecasts constitute investment advice, and no liability is accepted for any direct or indirect losses resulting from the use of this content. Fund investments carry risks; past performance does not guarantee future results, and the performance of other funds managed by the fund manager does not ensure the performance of this fund. Investors should exercise caution.
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