Wednesday (November 4) proved a miraculous day. Major A-share indices staged a collective counterattack, with the ChiNext Index leading gains at 6.4%, while the Shenzhen Component Index and Shanghai Composite Index rose over 4% and 2% respectively.
Notably, after a gap of 25 trading sessions, combined turnover in the two markets returned above the 2 trillion yuan mark. What drove today's rally? It may be attributed to a confluence of factors including the official stance on maintaining stability, sustained support from large capital, and accelerating inflows of incremental funds.
Overseas, the U.S. midterm elections sent a signal, with the Republican Party represented by Trump suffering losses, and Democrats potentially regaining control of the U.S. Congress. Geopolitical risks are expected to decline, market risk appetite has notably recovered, and peripheral markets have stopped falling and stabilized.
On the trading floor, semiconductor equipment leaders led the surge, with companies like Piotech Inc hitting the 20% daily limit. The underlying index of the STAR Market Chip ETF HuaBao (589190), which has relatively lower fees among peers, surged 12.61%. AI, as a high-beta growth sector, was the first to benefit from sentiment recovery, with obvious capital return. The underlying index of the ChiNext AI ETF HuaBao (159363), which focuses on leading optical module companies, closed up 7.81% on heavy volume.
CXO once again served as the rebound vanguard. Eight CXO constituent stocks of the Hong Kong Stock Connect Medical ETF HuaBao (159137) soared over 12%, with all three giants of the WuXi family included. The underlying index closed up 7.71%. Innovative drug leaders advanced together, with heavyweight stocks BeiGene and Kelun-Biotech of the Hong Kong Stock Connect Innovative Drug ETF HuaBao (520880) surging over 10%, and the underlying index rising 6.87%.
It is worth noting that Democrats gained an advantage in the U.S. midterm elections, which is positive for the pharmaceutical sector: Democrats are more inclined to restore and extend ACA health insurance subsidies and stabilize Medicaid.
The growth boards sounded the counterattack horn. The hard-tech broad-based index covering high-growth leaders from both ChiNext and STAR Market — the Double Innovation 50 ETF HuaBao (588330) — returned to the spotlight, with its tracked index reaching as high as 9.33% intraday before closing up 8.64%. The ETF's full-day turnover was 151 million yuan, up 64% quarter-on-quarter, indicating active trading.
Looking at a longer timeframe, since the historical high on July 1, the hard-tech broad-based indices (STAR Market and ChiNext 50, STAR 50, ChiNext 50) have all retraced over 47%. However, during this period, ETFs tracking these three indices across the market received a combined net inflow of up to 197.5 billion yuan, exhibiting a "buy more as prices fall" characteristic.
China Securities believes that this round of capital increase places more emphasis on the allocation value of science and technology innovation sectors such as the STAR Market and ChiNext.
Spot gold rose over 2.5% intraday, surpassing $4,030 per ounce. Ten constituent stocks including Shandong Gold hit the daily limit. The tracked index of the Non-Ferrous Metals ETF HuaBao (159876), which captures leaders in the non-ferrous metals industry, reached as high as 5.24% intraday and closed up 5.07%.
HuaBao Fund believes that with the U.S. midterm elections concluded, expectations of oil prices "peaking" may gradually materialize, and the macro headwinds that previously suppressed the non-ferrous metals sector may gradually clear. Looking ahead, the non-ferrous metals sector may be moderately optimistic, and it is suggested to pay attention to valuation repair opportunities on dips.
Huaxi Securities pointed out that with the resonance of capital and policy factors, the allocation value of A-shares is prominent. The current market has already over-adjusted and is in an accumulation phase, with a rebound expected after the蹲. From a policy perspective, regulators have recently intensively released signals of "maintaining capital market stability." From an industry perspective, domestic substitution is entering an accelerated implementation phase, continuously releasing multi-layered industrial dividends, opening up growth space for local innovative enterprises, driving capacity expansion in supporting tracks such as equipment, materials, and components, and spawning a batch of high-quality leaders.
Where to focus for ETF hotspots: A closer look at the trading and fundamental conditions of sector-themed ETFs including STAR Market Chip, ChiNext AI, Hong Kong Stock Connect Innovative Drug, and Hong Kong Stock Connect Medical.
One: Is the AI bull returning? High-beta tracks lead, STAR Market Chip ETF HuaBao (589190) underlying index surges 12%, multiple stocks hit 20% limit!
In the afternoon, technology growth suddenly rebounded, with chips and semiconductors exploding. The underlying index of the STAR Market Chip ETF HuaBao (589190), which has relatively lower fees among peers, surged 12.61%. Multiple stocks including 3PEAK, Piotech, and Skyverse hit the 20% daily limit, while over 30 stocks including Hua Hong Semiconductor and AMEC rose more than 10%.
After this round of adjustment, valuations in the chip and semiconductor-led technology sector have significantly retreated. UBS pointed out that profit growth in China's technology hardware remains strong, with earnings forecasts for most AI tech stocks revised up by 12% to 15% over the past three months. Valuations are near historical lows and imply pessimistic expectations of a significant slowdown in future profit growth.
Data shows that as of the end of October, the price-to-earnings ratio (TTM) of the SSE STAR Market Chip Index had returned to 90.3 times, at a relatively low level of approximately the 30th percentile since the index was launched. Meanwhile, AI investment concerns that previously weighed on the sector have cooled. AI giant Anthropic reported substantial revenue growth in the third quarter, and Advanced Micro Devices posted third-quarter financial results and fourth-quarter revenue guidance after hours that both exceeded Wall Street expectations, indicating the sustainability of AI spending. Morgan Stanley's latest forecast suggests that capital expenditure in the AI field could reach $10 trillion to $15 trillion over the next decade.
Additionally, this morning, ChangXin Memory Technologies announced a significant increase in its buyback amount, from "no less than 1 billion yuan (inclusive), no more than 2 billion yuan (inclusive)" to "no less than 2.5 billion yuan (inclusive), no more than 5 billion yuan (inclusive)." This move conveys confidence in the company's sustainable future development and high recognition of its value, helping to boost investor confidence.
Guohai Securities pointed out that storage supply and demand remain tight, third-quarter results are fully delivered, and overall storage prices show strong resilience, with limited risk of short-term supply-demand reversal and price decline. As a core link in computing infrastructure, storage's strategic position continues to rise. The demand for supply chain autonomy and controllability is driving a steady increase in domestic substitution rates, and domestic substitution has long-term growth space. It is recommended to focus on valuation repair opportunities in the domestic storage chain.
Donghai Securities stated that under AI-driven demand, the prelude remains vigorous, and supply-side capacity layout is slow. The chip and semiconductor industry's third-quarter results are generally good, and the high prosperity of fundamentals may continue until 2027. After adjustment, sector valuations have retreated, panic capital has been largely released, and a short-term bottoming-out rebound is possible. It is suggested to pay attention to opportunities in AI computing power, storage, and other industry chain links on dips, as well as domestic substitution directions such as semiconductor equipment and materials.
For investors, selecting among chip sub-sectors is difficult. It is better to use an index covering the entire chip industry chain for one-click allocation. The STAR Market Chip ETF HuaBao (589190) passively tracks the SSE STAR Market Chip Index, covering the entire chip industry chain, with heavy positions in core links such as AI chips, storage, and semiconductor equipment and materials. It can well reflect the industry development trends brought by the continuous upgrading of AI computing infrastructure, with strong offensive characteristics and 20% high elasticity. Off-market investors can follow the feeder fund 021225.
Note: The benchmark indices for storage content, ChangXin Memory content, and semiconductor materials and equipment content are the Storage Chip Index (980138.CNI), ChangXin Industry Chain Index (8841935.WI), and Semiconductor Materials and Equipment Index (931743.CSI), respectively, as of September 18, 2026. Public data shows that the STAR Market Chip ETF HuaBao (589190) has a management fee of 0.3%, a custodian fee of 0.08%, and a combined fee of 0.38%, which is relatively low among ETFs tracking the same index.
Two: "Key player" ignites! AI computing power sees capital return, optical module trio rebounds over 10%, 159363 underlying index closes up 7.81% on heavy volume
The market rebounded rapidly in the afternoon, with AI as a high-beta growth sector being the first to benefit from sentiment repair, and capital return was evident. The underlying index of the ChiNext AI ETF HuaBao (159363), which focuses on leading optical module companies, dipped and recovered throughout the day, closing up 7.81% on heavy volume. Among constituent stocks, the computing power track exploded across the board, with 11 constituent stocks rising over 10%. Among them, the optical module trio collectively rebounded: Eoptolink Technology rose over 13%, Zhongji Innolight rose over 11%, and T&S Communications rose over 10%.
In the afternoon, the market's "key player" emerged. The clarity of the midterm elections eased uncertainty, risk-averse capital returned, and high-beta sectors like AI repaired notably. On the news front, Democrats gained an advantage in the midterm elections and may regain control of the U.S. Congress. Geopolitical risks may decline, risk-averse capital returned to risk assets, and AI as a high-beta growth sector was the first to benefit from sentiment repair. Tech stocks are particularly sensitive to the transmission of falling oil prices and easing interest rate pressure, and capital prioritized the computing power mainline with high earnings visibility.
Cao Xuchen, fund manager of the ChiNext AI ETF HuaBao (159363), stated that the conclusion of the midterm elections significantly eased uncertainty, and global technology investment sentiment repaired from pessimistic to neutral. This round of decline severely damaged the chip structure of the technology sector. The future will be an investment system rebuilt from scratch, requiring re-validation of fundamentals in each sector, rather than a one-step V-shaped rebound. In the process of AI computing power industry shifting from second-order to first-order guidance, high-quality leading companies are more likely to span the cycle.
Regarding optical module investment, reviewing the three rounds of adjustments since 2023 shows that short-term macro, financial, or technical disturbances are often magnified into the end of long-term trends, but industrial evolution and earnings delivery repeatedly repair cognition. This round of correction is also a window to re-examine the value of optical interconnection and the fundamentals of leaders.
Guosheng Securities review pointed out that the optical module sector has experienced three deep corrections since the AI rally began in 2023, and after each adjustment, valuation repair and new highs were achieved based on earnings delivery. The current third round of adjustment has shifted the contradiction from the demand side to the financial and financing sides: under high interest rates, North American cloud vendors' free cash flow is under pressure, and the market worries that high financing costs will backfire on capital expenditure growth. Combined with slowing ARR delivery and supply chain review anxiety, panic sentiment easily transmits to the hardware side. The institution emphasized that "financing friction" is not "demand disappearance," and the logic of the optical interconnection industry has not been broken.
The common pattern of the three adjustments is that the market always tries to linearly extrapolate short-term disturbances into the end of long-term trends, while industrial evolution often disproves pessimistic expectations with orders and financial report data. Currently, leaders are in a "platform period" of rapid 1.6T volume ramp-up. Short-term mismatches are merely accumulation on the growth curve, and after crossing the critical point, earnings will be more fully released.
To allocate in optical module leaders plus AI applications, consider the ChiNext AI ETF HuaBao (159363) and off-market feeder funds (Class A 023407, Class C 023408), focusing on optical module CPO leaders while balancing AI applications. The underlying index has approximately 30% weight in "Zhongji Innolight + Eoptolink + T&S Communications," making it a core flagship for AI computing power.
Three: Complete explosion, who is igniting it? Hong Kong innovative drugs attack across the chain, WuXi family leads, CXO screens full of gains over 10%! 159137 underlying index rises nearly 8%
The Hong Kong stock market opened lower and moved higher, with the innovative drug chain strengthening against the trend in the morning and exploding in the afternoon. CXO once again served as the rebound vanguard. Eight CXO constituent stocks of the Hong Kong Stock Connect Medical ETF HuaBao (159137) soared over 12%, with all three giants of the WuXi family included. The underlying index closed up 7.71%, the highest single-day gain in nearly a year and a half, recovering five moving averages including the 5-day, 10-day, 20-day, half-year, and annual lines at once.
Innovative drug leaders advanced together. Heavyweight stocks BeiGene and Kelun-Biotech of the Hong Kong Stock Connect Innovative Drug ETF HuaBao (520880) surged over 10%, RemeGen rose 12.31%, and CSPC Pharmaceutical Group, Innovent Biologics, and Akeso all followed with significant gains. The underlying index rose 6.87%.
Analysis suggests that today's unusual rally may be driven by a combination of third-quarter earnings validation, institutional holdings data and post-deep-decline valuation repair, and overseas mapping. On the earnings side, WuXi AppTec's first three quarters revenue reached 45.54 billion yuan, already exceeding the full year of last year, with backlog orders of 76.7 billion yuan. Joinn Laboratories's third-quarter net profit surged more than 8 times year-on-year, and Asymchem increased over 81%. BeiGene will release third-quarter results before the U.S. market opens on November 5, and the market is pricing in expectations ahead of time.
On the capital side, public fund third-quarter reports show that pharmaceutical holdings increased by 4.05 percentage points quarter-on-quarter, with medical R&D outsourcing (CXO) seeing the largest increase (+2.10 percentage points). Hong Kong pharmaceutical stocks' share of Hong Kong fund heavy positions rose to 21.51%, as capital withdrew from AI hardware and reallocated to pharmaceuticals.
On the trading side, Hong Kong pharmaceutical stocks fell significantly earlier, creating demand for oversold repair. Just yesterday, the underlying indices of both the Hong Kong Stock Connect Innovative Drug ETF HuaBao (520880) and the Hong Kong Stock Connect Medical ETF HuaBao (159137) hit new nearly 3-month lows. Among them, the latest price-to-earnings ratio (TTM) of the 520880 underlying index is already lower than more than 80% of the time range over the past 3 years.
External factors added fuel to the fire. Democrats winning congressional dominance in the U.S. midterm elections is marginally positive for the pharmaceutical sector: Democrats are more inclined to restore and extend ACA health insurance subsidies and stabilize Medicaid; Congress is more likely to protect NIH research budgets and FDA review resources, which is conducive to early-stage biotech financing and pipeline advancement. Under a divided government structure, policy uncertainty is expected to shift from "unilateral acceleration" to "hearings and games," which is sentiment-positive for risk appetite repair in the innovative drug chain.
Zhang Fang, fund manager of the Hong Kong Stock Connect Medical ETF HuaBao (159137), pointed out that the medium-term allocation value of the pharmaceutical sector remains — historical low valuation percentile, public fund positions recovering but not crowded, and institutionalized advancement of the innovative drug payment system resonating, combined with the external mapping of warmer medical insurance coverage and innovation ecosystem after the U.S. midterm elections. The focus remains on innovative drugs and CXO directions.
For full-chain allocation in innovative drugs, consider the T+0 trading tool: Hong Kong Stock Connect Innovative Drug ETF HuaBao (520880): the underlying index is 100% allocated to innovative drug R&D companies, with 70% of positions betting on innovative drug R&D leaders. Off-market feeder fund: 025221. Hong Kong Stock Connect Medical ETF HuaBao (159137): the underlying index heavily positions in the innovative drug industry chain, approximately 50% CXO + 20% innovative drugs, with the WuXi family accounting for over 40%. Off-market feeder fund: 026922.
Note: For fee rates, please refer to the legal documents of each fund. Data sourced from public information such as the Shanghai, Hong Kong, and Shenzhen exchanges, as of November 4, 2026. Reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors must invest rationally based on their own financial conditions and risk tolerance, and pay high attention to position and risk management.
Institutional views reference sources: China Securities' October 18 report "Fund Research: Large Capital Continues to Flow into Broad-Based ETFs"; Huaxi Securities' November 4 report "Capital and Policy Resonance, A-Share Allocation Value Prominent"; UBS Securities' October 28 report "China AI Tech Hardware Valuation Near Historical Lows, Risk-Reward Turning Attractive"; Donghai Securities' November 3 report "Four Major Cloud Vendors' 2026Q3 Cloud Business Continues High Growth, SK Hynix and Samsung Electronics Results Shine"; Guohai Securities' November 2 report "Focus on AI Capital Expenditure Closed-Loop Expectations and Edge SoC Valuation Repair Opportunities"; Guosheng Securities' "Optical Module Three-Year Review: Attribution and Insights from Three Rounds of Adjustment."
According to the fund manager's assessment, the risk level of Non-Ferrous Metals ETF HuaBao is R3-medium risk, suitable for balanced (C3) and above investors. The risk levels of Double Innovation 50 ETF HuaBao, ChiNext AI ETF HuaBao, Hong Kong Stock Connect Innovative Drug ETF HuaBao, and Hong Kong Stock Connect Medical ETF HuaBao are R4-medium-high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions should be based on the sales institution.
Risk disclosure: The STAR Market Chip ETF HuaBao passively tracks the SSE STAR Market Chip Index, with a base date of December 31, 2019, and launch date of June 13, 2022. The ChiNext AI ETF HuaBao passively tracks the ChiNext AI Index, with a base date of December 28, 2018, and launch date of July 11, 2024. The Double Innovation 50 ETF HuaBao passively tracks the CSI STAR Market and ChiNext 50 Index, with a base date of December 31, 2019, and launch date of June 1, 2021. The Non-Ferrous Metals ETF HuaBao passively tracks the CSI Non-Ferrous Metals Index, with a base date of December 31, 2013, and launch date of July 13, 2015. The Hong Kong Stock Connect Innovative Drug ETF HuaBao passively tracks the Hang Seng Hong Kong Stock Connect Innovative Drug Select Index, with a base date of December 31, 2020, and launch date of July 17, 2023. The Hong Kong Stock Connect Medical ETF HuaBao passively tracks the CSI Hong Kong Stock Connect Medical Theme Index, with a base date of December 31, 2018, and launch date of July 21, 2022. The constituent stocks of the indices are adjusted in due course according to the index compilation rules, and their back-tested historical performance does not predict future index performance.
The individual stocks mentioned in this article are only objective displays and enumerations of index constituent stocks, not recommendations for any individual stock, and do not represent the fund manager or fund investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for their own investment decisions. In addition, any views, analyses, and predictions in this article do not constitute any form of investment advice to readers, and HuaBao Fund is not responsible for any direct or indirect losses caused by the use of the content of this article. Investors should carefully read fund legal documents such as the "Fund Contract," "Prospectus," and "Fund Product Information Summary" to understand the risk-return characteristics of the fund and choose products suitable for their own risk tolerance. Past performance of a fund does not predict its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Sales institutions (including direct sales institutions of the fund manager and other sales institutions) conduct risk assessments of the above funds in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions are not necessarily consistent, and the fund product risk rating evaluation results issued by fund sales institutions shall not be lower than the risk rating evaluation results made by the fund manager. There are differences between fund risk-return characteristics and fund risk ratings in the fund contract due to different consideration factors. Investors should understand the risk-return situation of the fund, carefully select fund products based on their own investment objectives, duration, investment experience, and risk tolerance, and bear the risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that it has made a substantive judgment or guarantee on the investment value, market prospects, or returns of the funds. Fund investment must be cautious. MACD golden cross signals have formed, these stocks are rising well!
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