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On Monday (October 19), the three major A-share indices closed mixed, with the Shanghai Composite Index up 0.39%, the Shenzhen Component Index edging up 0.13%, and the ChiNext Index falling 0.94%. Combined turnover across the two markets was approximately 1.44 trillion yuan, shrinking by 118 billion yuan from the previous trading day, with the overall market showing a pattern of shrinking volume and consolidation.
The dividend direction remained strong throughout the day, led by the banking sector. Bank of Communications (ASX: 601328), China Construction Bank (ASX: 601939), and Industrial and Commercial Bank of China (ASX: 601398) all hit record highs. The underlying index of Bank ETF Huabao (512800) rose 1.54%, setting a new yearly high. The interim dividend window for listed banks has opened, with 21 banks planning to distribute over 260 billion yuan in dividends, and the six major state-owned banks collectively raising their dividend payout ratios to 31%. Under a low interest rate environment, the appeal of high-dividend allocation continues to stand out.
The pharmaceutical sector saw intraday surges in the afternoon, with CXO and medical device names rallying together. The underlying index of Healthcare ETF Huabao (512170) touched 2% intraday before closing up 1.24%, while the underlying index of Pharma ETF Huabao (562050) rose 1.14%. On the news front, the draft for public comment on technology export restrictions had a narrower scope than expected, with mainstream innovative drug directions not restricted, compounded by catalysts from the upcoming ESMO conference.
The computing power direction showed notable recovery. The underlying index of Big Data ETF Huabao (516700) led gains at 1.7%, while the underlying index of Cloud Computing ETF Huabao (159099) rose nearly 1.5%. Expectations for the establishment of a National Data Group intensified, boosting the data element and cloud industry chain. Optical module leaders sparked a buyback wave, with the underlying index of the high "optical" ChiNext AI ETF Huabao (159363) rebounding after hitting a yearly low, briefly turning positive intraday.
CSC Financial stated that A-shares have completed a notable round of style rebalancing at this stage, with value and defensive plays having a temporary edge. From a medium-to-long-term perspective, the industrial logic of AI and new quality productive forces has not disappeared. After sufficient correction and declining crowding, technology sub-sectors with genuine Q3 earnings support still present repair opportunities. In terms of operations, it is recommended to maintain balanced allocation, balancing offense and defense, with dividend assets as the base position for defense.
*[ETF Full Knowledge Hotspot Review] Focuses on the trading and fundamental conditions of sector-themed ETFs including banking, healthcare, and big data.
1. Interim Dividends Land + Strong Q3 Expectations, Bank ETF Huabao (512800) Underlying Index Rises Another 1.5%, ICBC, CCB, and BOCOM Hit Record Highs
Banks rose steadily, with the underlying index of Bank ETF Huabao (512800) climbing another 1.54%, refreshing its yearly high. All 42 banking stocks closed higher, with Bank of Suzhou (ASX: 002966), Agricultural Bank of China (ASX: 601288), Bank of Qingdao (ASX: 002948), and Postal Savings Bank of China (ASX: 601658) up 3%, while Bank of Ningbo (ASX: 002142), Bank of China (ASX: 601988), Bank of Hangzhou (ASX: 600926) and 8 other stocks rose more than 2%. Bank of Communications (ASX: 601328), China Construction Bank (ASX: 601939), and Industrial and Commercial Bank of China (ASX: 601398) hit record highs again.
Since the second half of the year, as overall market volatility increased, banks have continued to rebound against the trend. The sector has accumulated gains of 18.09% over the period, ranking 2nd among all Shenwan first-level industries. Overall, under market style rebalancing, banks have significantly benefited from safe-haven capital inflows and insurance capital increases. Entering the fourth quarter, the landing of interim dividends and expectations for improved Q3 reports will also bring strong catalysts.
Note: The CSI Bank Index has a base date of December 31, 2004, and was published on July 15, 2013. The CSI Bank Index's returns over the past 5 complete years are: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%. The volatility over the past 5 complete years is: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. Index constituent composition is adjusted in a timely manner according to the index compilation rules. Past performance does not predict future results.
This week, Industrial and Commercial Bank of China and Agricultural Bank of China will distribute interim cash dividends, with the two A+H companies totaling 99.25 billion yuan in cash distributions. Overall, 21 A-share listed banks have disclosed their 2026 interim dividend plans, with total planned dividends exceeding 260 billion yuan. In an environment of declining risk-free interest rates, banks' "quasi-fixed-income" allocation value is prominent.
In terms of performance, although overall credit demand has not yet shown a trend of recovery, accelerated government bond issuance, increased PSL, and the implementation of policy-based financial tools are expected to support the stabilization of quality banks' net interest margins. Western Securities expects that the overall revenue and profit growth of listed banks in the first three quarters of 2026 will improve compared to the first half, validating the industry's fundamentals moving from bottoming out to improvement. The growth elasticity of non-interest income and solid provisions will jointly drive further valuation repair for the sector.
*CITIC Securities believes that against the backdrop of still-high market volatility, banks' earnings stability is expected to further consolidate their stable return attributes. The banking sector is expected to be revalued from a "high-dividend defensive asset" to a "high-certainty equity asset," and the sector will continue to exhibit an upward valuation direction.
*Guosen Securities stated that under a low interest rate environment, high-dividend banks possess long-term allocation value. In terms of win rate, stabilizing profits solidify the dividend foundation, and low interest rates highlight dividend value. In terms of odds, the core focus is on macroeconomic policy expectations. If policies drive upward earnings revisions, a "Davis double play" could be in store.
*Riding the trend, balancing offense and defense! Bank ETF Huabao (512800) passively tracks the CSI Bank Index, with constituent stocks encompassing all 42 A-share listed banks. Its top ten weighted stocks gather large-cap leaders such as Industrial and Commercial Bank of China, Agricultural Bank of China, and Bank of Communications, and also cover growth-oriented joint-stock banks and city/rural commercial banks such as China Merchants Bank (ASX: 600036), Industrial Bank (ASX: 601166), and Bank of Jiangsu (ASX: 600919). It is an efficient investment tool for tracking the overall banking sector行情. Off-market investors can consider feeder funds (Class A: 240019; Class C: 006697).
2. Misjudged Correction Repair, Healthcare ETF Huabao Underlying Index Touches 2%! "Dividend Among Pharma" Favored in Choppy Market, Darentang Hits Limit Up, Pharma ETF Huabao Underlying Index Rises for Three Consecutive Days
The pharmaceutical sector turned positive against the trend in early trading and surged strongly in the afternoon! The CSI Medical Index touched 2%, and Healthcare ETF Huabao (512170), which tracks the index, rose at a premium, with CXO and medical device constituent stocks rallying together. Representative heavyweight stocks Pharmaron (ASX: 300759) and Snibe (ASX: 300832) both rose over 5.8%.
Chart: Healthcare ETF Huabao (512170) performance over the past 6 months.
The pharmaceutical index was also active, closing up 1.12%, with traditional Chinese medicine constituent stocks particularly strong. Darentang (ASX: 600329) hit the limit up, while Dong-E-E-Jiao (ASX: 000423) and Pien Tze Huang (ASX: 600436) rose over 4%. Innovative drugs partially strengthened, with Zelgen Biopharmaceuticals-U (ASX: 688266) and Hybio Pharmaceutical (ASX: 300199) up over 5.5%. The only on-market Pharma ETF Huabao (562050) tracking the pharmaceutical index recorded three consecutive days of gains.
Chart: Top 10 gaining constituent stocks of Pharma ETF Huabao (562050).
Overall, today's pharmaceutical行情 mainly played out along three lines: medical devices, innovative drug chain, and traditional Chinese medicine. Analysis suggests that medical devices and traditional Chinese medicine may primarily benefit from their defensive value: recent market style has turned cautious, with the former having prominent oversold attributes and the latter possessing high-dividend characteristics, making them more likely to attract safe-haven capital attention.
On the news front, on October 17-18, the 2026 World Traditional Medicine Conference was held in Beijing. Senior leaders attended the opening ceremony and delivered speeches. Today, the conference released the "Beijing Outcomes," proposing to expand the inclusive supply of quality traditional Chinese medicine services and promote the deep integration of AI and traditional Chinese medicine.
Innovative drugs and their industry chain rebounded broadly, possibly benefiting from "misjudged correction" repair. Last Friday (October 16), an "erroneous old news" about WuXi AppTec (ASX: 603259) triggered panic. On the same day, the "Catalogue of Technologies Prohibited or Restricted from Export in China" was released for public comment, proposing to include 5 technologies including cell and gene therapy and small nucleic acid drugs within the restricted scope. After a weekend, the WuXi rumor was debunked, and the policy "negative" turned into a positive — the formal policy clarified that "BD transactions for conventional single-product pipelines are not restricted, and CRO/CDMO R&D and production services are not substantially affected." The scope of restrictions was significantly narrowed compared to the version circulated online in May, with marginal impact notably better than expected.
Is the market sustainable? In the short term, there are two key catalysts for pharma — the ESMO conference (October 23-27) with密集 data readouts, and Q3 report disclosures. In the medium term, October to April of the following year is a window with relatively密集 industry events and concentrated excess returns from turnaround situations. The current period may be at a favorable entry point for positioning.
To quickly follow the pharmaceutical行情, investment tools to watch:
Healthcare ETF Huabao (512170): A flagship pharma and healthcare ETF with Q2 report scale of 25.624 billion yuan. Focused on medical devices + medical services (CXO content over 30%), also covering AI healthcare. Off-market feeder fund: 012323.
Pharma ETF Huabao (562050): The only ETF in the entire market tracking the pharmaceutical index, with an exclusive allocation of approximately "70% innovative drugs + 20% traditional Chinese medicine," combining the high growth of innovative drugs with the high dividends of traditional Chinese medicine. Off-market feeder fund: 024986.
3. Nine Departments Promote "Revitalizing Commerce Through Technology"! Sugon Plans Massive Buyback! Big Data ETF Huabao (516700) Tracking Index Tops 2% Intraday!
Possibly due to rising expectations for the establishment of a National Data Group, data element concept stocks performed actively. Taiji Computer (ASX: 002368) hit the limit up! State Grid Information & Telecommunication (ASX: 600131) rose over 8%, China Software (ASX: 600536) gained more than 6%, and Sugon (ASX: 603019), which conducted a massive buyback, rose over 4%.
Deeply tied to domestic computing power (IDC, servers) and AI application sectors, the Big Data ETF Huabao (516700) tracking index topped 2.08% intraday and closed up 1.7%.
Chart: Top 10 gaining constituent stocks of Big Data ETF Huabao (516700).
On the news front, dense positive catalysts emerged for the big data direction: ① The new central state-owned enterprise being prepared by SASAC — the National Data Group — may be listed soon, marking a key step in the market-oriented reform of data elements; ② The Ministry of Commerce and 9 other departments issued the "Opinions on Accelerating the Promotion of Revitalizing Commerce Through Technology," enhancing the application level of new technologies such as AI, big data, and cloud computing; ③ The State Council Executive Meeting heard a report on the progress of the "AI+" initiative and pointed out that AI is a key variable affecting future development, emphasizing the need to drive technological innovation with implemented applications.
Notably, constituent stock Sugon plans to spend 300-500 million yuan on share buybacks, using real money to boost market confidence! Previously, Sugon expected to achieve net profit attributable to shareholders of 1.724 billion yuan in the first three quarters, a year-on-year increase of 78.48%. The profit growth was mainly driven by favorable market demand in the domestic computing power sector, increased sales of high-end computers and other IT equipment, and increased sales of supporting software and other high-gross-margin products, driving overall gross margin improvement. Constituent stocks Inspur Information (ASX: 000977) and Unisplendour (ASX: 000938) are expected to achieve triple-digit year-on-year growth in net profit attributable to shareholders at the highest end.
Guotai Haitong Securities believes that the data element institutional framework is gradually forming a closed loop, and AI large models and applications are stimulating the data value flywheel. The release of data element value and industrial blossoming is expected to accelerate in 2026. It is recommended to focus on industry chain segments including data supply, data trading and circulation, data application development, data services, data security, and computing power and network infrastructure.
*In terms of valuation, as of October 18, the PE (TTM) of the index tracked by Big Data ETF Huabao (516700) was 70.65 times, below the median of 79.55 and at a relatively low position of 37.58% percentile since listing, highlighting medium-to-long-term allocation cost-effectiveness.
[Data Security is King, Technological Self-Reliance] Big Data ETF Huabao (516700) passively tracks the CSI Data Index, deeply tied to domestic computing power (IDC, servers) and AI application sectors, encompassing popular concepts such as cloud computing (Sugon), IDC computing power leasing (Inspur Information), computing power (Unisplendour), and AI applications (iFlytek (ASX: 002230)), covering the entire data technology process, involving big data storage, big data production, big data analysis, big data operation platforms, big data applications, and other fields, better reflecting the overall development of China's big data industry.
Note: Fee rates are detailed in each fund's legal documents. Source: Shanghai, Shenzhen, and Hong Kong exchanges, CSI Index, CNI Index, Hang Seng Index Company, etc., as of October 19, 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, paying close attention to position and risk management. *Institutional views reference sources: CSC Financial "Opportunities Emerge in A-Share Choppy Bottoming Phase"; Western Securities October 18, 2026 "Bank 26Q3 Earnings Preview: Fundamentals Steadily Improving"; CITIC Securities October 18, 2026 "Banking Earnings Stability Expected to Further Consolidate Stable Return Attributes"; Guosen Securities October 12, 2026 "Banking Sector Q4 Investment Strategy: Dividends as the Base, Positioning for Earnings Upward Revision Expectations"; Guotai Haitong Securities January 30 "Data Element 'Industry Observation' Series: Institutional Closed Loop Plus AI Catalysts, Embracing the Data Element 'Value Release Year'."
According to the fund manager's assessment, the risk level of ChiNext AI ETF Huabao is R4-Medium-High Risk, suitable for aggressive (C4) and above investors. The risk levels of Bank ETF Huabao, Big Data ETF Huabao, Cloud Computing ETF Huabao, Healthcare ETF Huabao, Pharma ETF Huabao, Software Development ETF Huabao, and Xinchuang ETF Huabao are R3-Medium Risk, suitable for balanced (C3) and above investors. Suitability matching opinions should be based on the sales institution.
Risk Warning: Bank ETF Huabao passively tracks the CSI Bank Index, which has a base date of December 31, 2004, and was published on July 15, 2013; Big Data ETF Huabao passively tracks the CSI Big Data Industry Index, which has a base date of December 31, 2012, and was published on October 18, 2016; ChiNext AI ETF Huabao passively tracks the ChiNext AI Index, which has a base date of December 28, 2018, and was published on July 11, 2024. Index constituent composition is adjusted in a timely manner according to the index compilation rules. Its back-tested historical performance does not predict the index's future performance. Individual stocks mentioned in this article are merely objective demonstrations and enumerations of index constituent stocks, not as any individual stock recommendation, 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, any form of expression, etc.) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and predictions in this article do not constitute any form of investment advice to readers, nor do they assume any direct or indirect liability for 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," 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 the fund manager's direct sales institution 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. Suitability opinions among different sales institutions may not necessarily be consistent, and the risk rating evaluation results of fund products issued by fund sales institutions shall not be lower than the risk rating results made by the fund manager. There are differences between the fund's risk-return characteristics in the fund contract and the fund's risk rating due to different factors considered. 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 risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that it makes any substantive judgment or guarantee on the investment value, market prospects, and returns of these funds. Fund investment requires caution. MACD golden cross signals have formed; these stocks are performing well!
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