The final trading day of May (May 29) witnessed a sudden and sharp shift in market dynamics within the A-share market. Technology stocks underwent significant adjustments, while previously underperforming sectors such as real estate, consumer staples, and pharmaceuticals saw a notable rise. Defensive sectors like banking and power also strengthened concurrently. By the close, the Shanghai Composite Index fell 0.73% to 4068.57 points, while the Shenzhen Component Index and the ChiNext Index declined 1.81% and 2.11% respectively, erasing the previous day's gains. Total market turnover reached 3.34 trillion yuan, showing a significant increase from the prior session.
The semiconductor industry chain experienced a sharp downturn. The Huabao STAR Market Chip ETF (589190), which offers comprehensive exposure to the chip industry, plunged 5.51%. Technology stocks adjusted across the board, with the Huabao Dual Innovation 50 ETF (588330), which covers 50 leading high-growth companies from the ChiNext and STAR markets, closing down 3.18%.
Leading real estate stocks surged against the broader market trend. The Huabao Real Estate ETF (159707), the only ETF in the market tracking the CSI 800 Real Estate Index, rose nearly 6% in early trading and closed up 4.13% on heavy volume. The news catalyst was the State Council's recent issuance of the "15th Five-Year Plan for Urban Renewal," coupled with the intensive release of new real estate policies in cities like Beijing, Shenzhen, and Suzhou.
The "liquor and pharmaceuticals" theme made a swift return just one day later. Kweichow Moutai surged 3.92%, lifting the high-alcohol-content Huabao Food and Beverage ETF (515710) by 2.78% to reclaim its 10-day moving average. The pharmaceutical sector gained strong momentum before noon, with the Huabao Pharmaceutical ETF (562050), the only on-exchange ETF tracking a pharmaceutical index, rising as much as 3.25% on increased volume.
The power sector continued its strong performance. The Huabao Power ETF (159146), offering a comprehensive "wind, solar, hydro, thermal, and nuclear" energy portfolio, surged 3.28% to hit a new all-time high, marking an impressive six consecutive positive trading days. The rally is being driven by a dual catalyst: the fundamental logic of "tightening summer power supply" and the high-growth expectations surrounding "computing-power synergy."
Signs of a potential bottom may be emerging in the Hong Kong market. The Hang Seng Index closed up 0.7%, ending a six-day losing streak, while the Hang Seng Tech Index edged down 0.09%. Following Innovent Biologics' announcement of a major $10 billion business development deal, Hong Kong Connect innovation pharmaceutical stocks saw a sudden surge before noon, leading the market higher in the afternoon. The Huabao HK Connect Innovation Pharma ETF (520880), which holds 100% innovation drug R&D companies, soared, rising as much as 4.29% before closing up 3.57% on explosive volume.
Hong Kong's hard-tech sector remained active. Despite the chip sector pullback, the "AI factory" concept exploded, with Lenovo Group skyrocketing 21.95%. The Huabao HK Connect Information Technology ETF (159131), the largest and most liquid* ETF of its kind, rose as much as 4.46% intraday to another new high, closing up 1.12% and continuing to outperform the Hang Seng Tech Index, with a daily turnover of 2.325 billion yuan.
Industry analysts attribute Lenovo's surge to a triple resonance: Dell's explosive AI-related earnings report overnight, Lenovo's own just-released strong AI-related financial data, and collective target price hikes by institutions, leading the market to revalue it as the "Chinese version of Dell." According to China Securities Index Co., Ltd. data, as of May 28, Lenovo Group is the second-largest constituent of the Huabao HK Connect Information Technology ETF's underlying index, with a weight of 13.29%.
Below is a focused discussion on the trading and fundamental situations of several thematic sectors, including Hong Kong Connect innovation pharmaceuticals, power, and food and beverage.
1. Hong Kong Connect Innovation Pharma Surges, 520880 Rebounds Violently by 3.57%! Innovent's $10 Billion Deal Revealed, Soaring 13% Intraday! Institutions Firmly Bullish on Innovation Pharma!
A- and H-share innovation pharmaceutical stocks joined forces in a counterattack. The Huabao Pharmaceutical ETF (562050), heavily weighted in A-share innovation pharma, and the Huabao HK Connect Innovation Pharma ETF (520880), fully invested in Hong Kong-listed pharma, gained momentum before noon and surged together in the afternoon, closing up 2.35% and 3.57% respectively, significantly outperforming the broader market.
Focusing on the Hong Kong Connect innovation pharma sector, buoyed by the $10 billion deal, Innovent Biologics led the charge, soaring nearly 13% at one point. In the afternoon, other heavyweight leaders like Akeso, CSPC Pharmaceutical Group, and 3SBio followed suit, driving the 100% innovation drug R&D-focused Huabao HK Connect Innovation Pharma ETF (520880) up by 4.29%!
By the close, 520880 rose 3.57%, ending a five-day losing streak. The intraday amplitude reached 5.25%, with single-day turnover hitting 594 million yuan, a near one-month high and a volume increase of over 124% from the previous session. Notably, there were net inflows of nearly 13 million units in the two preceding days.
After declining for the first four days of the week, with the Huabao HK Connect Innovation Pharma ETF (520880) hitting successive historic lows, what were the core drivers behind Friday's sudden turnaround?
First, another $10 billion+ BD deal was born! On May 29, Innovent Biologics announced a collaboration with Pfizer on oncology drugs, with a total potential deal value of $10.5 billion, including an upfront payment of $650 million and potential milestone payments of up to $9.85 billion.
Second, negative rumors were dispelled. On May 28, the innovation pharma sector slumped on rumors regarding BD regulatory policies. On the 29th, Innovent's official announcement of a major BD deal countered these rumors. Coupled with statements from several industry companies that pipeline licensing for innovation drugs would not be affected, market sentiment returned to rationality.
Third, a major industry conference commenced. The 2026 American Society of Clinical Oncology (ASCO) Annual Meeting runs from May 29 to June 2. Thirteen studies from 12 Chinese pharmaceutical companies were selected for the plenary session and late-breaking abstracts, setting a new historical record. This opens a concentrated data readout window for domestic innovation drugs in the near future.
Huafu Securities pointed out that there are no actual fundamental negatives for innovation pharma. Supported by policies, at valuation bottoms, with high overseas demand景气, and at an earnings inflection point, the sector should not fear the darkness before dawn, and they remain firmly bullish.*
The innovation pharma sector has been adjusting for over 8 months. To accumulate core innovation pharma assets at low levels, consider these two key investment tools:
For pure-play innovation pharma exposure, consider the Huabao HK Connect Innovation Pharma ETF (520880). It invests 100% in innovation drug R&D companies, with its top ten holdings accounting for over 70%, highlighting its leader attributes. Its underlying assets are Hong Kong-listed stocks, offering high elasticity and T+0 trading.
For investors seeking lower volatility, the on-exchange-only Huabao Pharmaceutical ETF (562050) offers a unique "70% innovation pharma + 30% traditional Chinese medicine" allocation—a scarce product in the market, combining the high growth of innovation pharma with the high dividends of traditional Chinese medicine.
2. Power Sector Surges Against Market Trend! Six Stocks Including Huaneng Power International Hit Limit-Up, Huabao Fund Power ETF (159146) Rises 3.28% on Volume to New Listing High!
The A-share power sector defied the broader market downturn with a wave of limit-up gains. The CSI All Share Power & Utilities Index surged over 3%. Specifically, 13 stocks rose more than 5%, with six stocks, including Jinneng Power, Huaneng Power International, Jiangsu Guoxin, YueDian A, GuangAn AiZhong, and Huaneng Meng Electric, hitting the daily limit-up. YueDian A secured its third consecutive limit-up.
Among popular ETFs, the Huabao Power ETF (159146), with its comprehensive "wind, solar, hydro, thermal, and nuclear" energy portfolio, rose 3.28% against the market to a new historic high, marking a powerful six-day winning streak. It traded over 77 million shares on heavy volume, with net inflows of 3 million units.
Currently, the rally logic for the power sector is shifting from being driven solely by the "computing-power synergy" theme to a dual resonance formed by the fundamental logic of "tightening summer power supply" and the high-growth expectations of "computing-power synergy."
On the demand side, summer power loads may hit new highs. News indicates that this year, the power load for the entire Southern Power Grid and its five provincial grids (Guangdong, Guangxi, Yunnan, Guizhou, Hainan) has already set 20 new records, breaking the seasonal pattern where annual peak loads typically occurred in June and July from 2020 to 2025. The National Climate Center forecasts that China's peak power load this summer could reach 1.6 billion kilowatts, an increase of approximately 90 million kilowatts year-on-year.
Changjiang Securities stated that a recurrence of tight supply and demand could accelerate electricity price increases and mechanism reforms. The previous round of power shortages (2021-2023) already prompted the removal of electricity price浮动 limits, the introduction of capacity电价 mechanisms, and accelerated construction of thermal power, pumped storage, and electrochemical energy storage. If tight conditions reappear this summer, it would benefit thermal power电价 increases,推动 capacity电价上调, and improve电价 levels for nuclear power and coastal hydropower sent outwards.*
On the policy side, "computing-power synergy" is accelerating its transition from policy direction to实质落地, releasing clear industry signals. Everbright Securities noted that for computing-power itself, continuous policy support from various regions叠加 the接连商用 of specific projects gives the computing-power板块具备产业景气度. Power stocks, under the持续催化 of the computing-power synergy theme, offer a balanced配置 that兼顾了防御属性.*
The Huabao Power ETF (159146) and its联接 fund (code: 026949) focus on the power and utilities sector, providing comprehensive exposure to thermal, hydro, wind, nuclear, and solar power. They aim to capture the growth弹性 of new energy while relying on the high dividends and stable cash flows of traditional power leaders to smooth market volatility, achieving a dual适配 of "defensive foundation + growth弹性."
3. Food & Beverage Sector Sees Long-Awaited Surge, Huabao Fund Food and Beverage ETF (515710) Rises 3.78%! Main Force Injects 4.1 Billion, Is the Counterattack Beginning?
The food and beverage sector experienced a long-awaited significant rise. By the close, the sector ranked first among the 30 CITIC primary industries in terms of gains. The Huabao Food and Beverage ETF (515710), reflecting the overall trend of the sector, rose continuously after opening, with its on-exchange price reaching an intraday high of 3.78% before closing up 2.78%.
Among constituents, baijiu (Chinese liquor) stocks collectively advanced. By the close, Jiugui Liquor hit the limit-up, Jin Hui Jiu rose 5.25%, Wuliangye gained 4.17%, with Kweichow Moutai, Luzhou Laojiao, Shanxi Xinghuacun Fenjiu, Yanghe Brewery also among the top gainers.
On the capital flow front, main force funds heavily increased their positions in the sector today. Data shows that by the close, the food and beverage sector saw a single-day net inflow of main force funds reaching 4.183 billion yuan, ranking third among the 30 CITIC primary industries.
Guohai Securities pointed out that if institutional allocation styles shift subsequently,叠加消费复苏, the food and beverage sector could迎来估值修复与业绩兑现的双重行情. At the corporate level, leading premium liquor companies are actively engaging in市值管理工作 to boost shareholder confidence, while优质龙头 in consumer staples also provide strong support through cash dividends, highlighting the medium-to-long-term配置价值 of sector leaders.*
From a valuation perspective, the sector remains at relatively low levels. Data shows that as of the previous close (May 28), the price-to-earnings ratio of the CSI Sub-Index Food Index, tracked by the Huabao Food and Beverage ETF (515710), was 20.53 times,位于近10年来10.98%分位点的低位, indicating prominent medium-to-long-term配置性价比.
Looking ahead, TF Securities noted that while current sector trading continues to be weighed down by sentiment, industry fundamentals are showing marginal stabilization. The industry has entered a period of low base sales comparisons, with inventory有序出清中. The stabilization of wholesale prices for leading companies like Moutai during the off-season strengthens their role in supporting the industry's price ecosystem and channel信心. Major platforms' 618 promotional campaigns have陆续拉开序幕, warranting后续关注 on platform subsidy力度 and名酒批价走势.*
Guojin Securities expressed看好当前白酒板块配置价值, stating that胜率可观 under低预期. Expectations lead; the白酒行业 has already passed the steepest phase of出清. Even during the off-season post-holidays, there is potential for top-down catalysts. Historical复盘 shows indicators like PPI and M1 possess前瞻信号意义 for白酒 demand侧. The白酒 industry景气度 exhibits cyclical波动, and they看好具备差异化竞争优势的禀赋型酒企 in突破桎梏 during周期演绎 and scaling to new heights.*
For one-click exposure to the core assets of the food and beverage sector, focus on the Huabao Food and Beverage ETF (515710). According to China Securities Index Co., statistics, the ETF tracks the CSI Sub-Index Food & Beverage Industry Theme Index, with baijiu leaders comprising nearly 60% of its holdings. Its top ten权重股 include "Moutai, Wuliangye, Luzhou Laojiao, Fenjiu, Yanghe," as well as Yili Industrial Group and Foshan Haitian Flavouring & Food Co., Ltd. Off-exchange investors can also access the sector's core assets through the Food and Beverage ETF联接基金 (Class A 012548, Class C 012549).
Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong stock exchanges, etc.
Note: "The first in the entire market" refers to the Huabao HK Connect Information Technology ETF being the first ETF in the market to track the CSI Hong Kong Connect Information Technology Composite Index. As of May 27, 2026, the Huabao HK Connect Information Technology ETF's latest on-exchange规模 was 1.321 billion yuan, making it the largest among the 7 ETFs currently tracking the CSI Hong Kong Connect Information Technology Composite Index; its year-to-date average daily成交额 is 300 million yuan.
*Institutional views reference sources: May 27-28 Huatai Securities 2026 Mid-Year Investment Summit. Section 1: Source: Huafu Securities May 29, 2026 "Innovation Pharma Market Commentary." Section 2: Changjiang Securities "Summer Loads May Hit New Highs, How to View Power Supply and Demand?"; Everbright Securities "Policy Release for Multi-User Green Power Direct Connection叠加 El Niño Impact, Power Sector Rally May Continue." Section 3: Guohai Securities May 26 Food and Beverage Industry Special Research "Endgame for Baijiu筹码出清, Industry Inflection Point Approaching"; TF Securities May 25 Food and Beverage Industry Research Weekly Report "Consumer Sector May Experience Darkest Hour"; Guojin Securities May 16 Food and Beverage Industry Research "Moutai部分 Non-Standard Price Hike, Focus on Sector Low-Position配置."
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