On Monday, June 1st, the A-share market experienced a day of rallying before retreating, with the ChiNext Index falling over 2%. A clear divergence was observed between large-cap and small-to-medium cap stocks, with the latter showing relative strength. In contrast, the Hong Kong market staged a rebound, led by internet giants.
AI application stocks defied the broader market decline, with the AI PC concept showing particular activity. Focused on core AI tools within the Hong Kong market and heavily weighted towards internet leaders, the Huabao Hong Kong Internet ETF (513770) spearheaded the advance, surging 3.23%. In the A-share market, the computer software sector strengthened, with the oversold Huabao FinTech ETF (159851) rebounding 2.67%. The Huabao Xinchuang ETF (562030) and the Huabao Big Data ETF (516700) both gained over 1% in intraday trading.
Additionally, chemical stocks oscillated higher, with the Huabao Chemical ETF (516020) closing up 1.61% intraday. Catalyzed by summer power shortages and the synergy between computing and electricity, several power stocks surged to their daily limit late in the session. The Huabao Power ETF (159146), which provides exposure across the full energy spectrum including wind, solar, hydro, thermal, and nuclear power, closed up 1.5% intraday, hitting a new high.
In contrast, semiconductor and optical module stocks, representing computing hardware, continued their correction. The Huabao STAR Market Chip ETF (589190), offering comprehensive exposure to the chip sector, plunged 6.22% intraday. The Huabao ChiNext Artificial Intelligence ETF (159363), with over 50% exposure to CPO (co-packaged optics) optical modules, rallied before falling back to close down 1.78%, attracting attention from investors looking for buying opportunities on dips.
**Hong Kong Internet Surge Led by AI Applications**
The Hong Kong market rebounded, with the long-absent internet sector once again becoming the primary driver of gains. AI application stocks soared, with Meitu Inc. skyrocketing 26%, Kingdee International Software Group surging over 19%, and Maifushi, China Ruyi Holdings, and Kingsoft Software all posting double-digit gains. Among internet giants, Meituan-W rose over 6% ahead of its earnings report, while Tencent Holdings and Xiaomi Corporation-W gained over 2%, and Alibaba Group Holding Limited added over 1%.
**Huabao Hong Kong Internet ETF (513770)**
Focused on core AI tools in the Hong Kong market and heavily weighted towards internet leaders, the Huabao Hong Kong Internet ETF (513770) moved steadily higher, with its intraday price jumping 3.23% to reclaim its daily moving average. Full-day turnover reached 8.99 billion yuan, a significant increase of over 2 billion yuan from the previous session.
The market appears to be signaling a shift in sentiment. While hardware-centric sectors like chips and semiconductors have seen collective pullbacks, the AI application segment has mounted a strong counteroffensive. Last week, U.S. software stocks like Snowflake and Okta posted massive gains on earnings and guidance that far exceeded expectations, effectively disproving prior market fears of "AI disruption" in software. This has led the market to re-evaluate the software application industry, particularly companies deeply integrated with AI.
As of the end of May, the Hang Seng Stock Connect Hong Kong Internet Index had fallen over 40% since its correction began on October 3, 2025. The index's current P/E ratio (TTM) sits at a mere 2.14% percentile over the past decade, suggesting a high margin of safety and value.
**Huabao FinTech ETF (159851)**
The fintech sector staged an oversold rebound, with financial IT stocks leading the charge. Transwarp Technology surged over 15%, HopeRun Software gained over 12%, while Shuiyou Co., Ltd. and Zhongke Jincai hit their daily limit-up. Gerr Software approached its limit-up, and Bonree Data, Yinzhi Jie, Zhongke Jiangnan, and Kelan Software all rose over 5%.
After recently touching a new phase low, the Huabao FinTech ETF (159851), the largest ETF of its kind, enjoyed a rebound, with its intraday price closing up 2.67%. Full-day turnover was substantial at 3.8 billion yuan.
Today's rebound in fintech likely benefited from the broader AI application surge. Nvidia CEO Jensen Huang stated in a speech that the era of Agent AI and practical artificial intelligence has arrived, describing tokens as the "unit of profit" and AI as a GDP "generator."
As one of the most valuable directions for AI application, financial IT is benefiting from the deep integration of large AI models into financial scenarios. Under this trend, leading financial IT vendors with productization capabilities and technological barriers are expected to maintain their lead.
From a medium-to-long-term perspective, the fintech sector may currently be at a strategic entry point characterized by strong catalysts and low valuations. On one hand, the deep integration of AI technology, coupled with sustained high market turnover, provides solid fundamental support for internet brokers and financial IT. On the other hand, following a correction, sector valuations have fallen to near three-year lows, offering both safety and potential for significant upside.
**Huabao Big Data ETF (516700)**
AI application and software stocks remained active against the market trend. The Huabao Big Data ETF (516700), which covers popular concepts like computing power leasing and AI applications, saw its intraday gain peak at 3.53% before closing up 1.35%. It recorded net capital inflows over the previous four trading days, totaling 8.48 million yuan, reflecting positive investor sentiment towards the big data industry's prospects.
Among its constituents, Yonyou Network and Shuiyou Co., Ltd. hit their daily limit-up, while Digiwin Digital Intelligence led gains with a rise over 14%. Easymobi and Sangfor Technologies climbed over 9%, with China Software and CETC Digital following suit. A total of 26 constituent stocks gained over 2%.
Three key factors are driving the resilience in AI applications and software. First, better-than-expected earnings from U.S. software companies like Snowflake and MongoDB have corrected the pessimistic "AI will consume SaaS" narrative. The spillover effect from the over 21% rebound in the U.S. software IGV index is now influencing the A-share software sector through global capital reallocation.
Second, business model transformation is opening new revenue ceilings. AI business models are shifting from pure SaaS subscriptions to a dual-track system of "subscription + token consumption." As AI agents proliferate, token consumption is expected to grow exponentially. Meanwhile, a 90% reduction in per-token inference costs has dramatically lowered the barrier to AI application, helping software companies enter a high-growth phase of scaled implementation in 2026.
Third, the A-share software sector is at a valuation low, potentially poised for a re-rating. As of the end of May, the P/E ratio (TTM) of the CSI Data Index was 107.30, below its median of 110.80 and at the 46.43% percentile over the past three years, indicating relatively high value and safety.
The Huabao Big Data ETF (516700) tracks the CSI Big Data Industry Index, covering the entire data technology process from storage and production to analysis, operations platforms, and application. Its top holdings include industry leaders like Sugon, iFLYTEK, Unisplendour Corporation, Inspur Information, China Greatwall Technology Group, and China Software.
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