On November 12, all three major indices closed lower, with the dual-innovation boards once again caught in the "curse" of intraday rallies fading by the close. The ChiNext Index rose nearly 2% in early trading, while the STAR 50 climbed almost 5% intraday before ending up 0.73%. Combined turnover on the Shanghai and Shenzhen exchanges expanded notably to 1.93 trillion yuan, with more than 4,600 stocks declining across the market.
GPU-related concepts showed relative strength, as Cambricon Technologies surged over 13% intraday, reclaiming the 100 billion yuan market cap level and closing up more than 8%. The underlying index of the STAR Chip ETF (589190) managed by Huabao peaked at a 6% gain before closing up 1.38%. The underlying indices of the STAR Chip Design ETF (589430) and the Electronics ETF (515260), both managed by Huabao, also closed higher against the broader market decline. The "E-Z-T" trio that surged spectacularly yesterday all retreated, with the underlying index of the ChiNext Artificial Intelligence ETF (159363) managed by Huabao, which focuses on leading optical module companies, rising over 3% at one point before reversing to close down 2.65%, as demand-side validation continues and investor attention remains elevated.
Regarding the reasons for the market pullback, both Japanese and South Korean stock markets experienced sharp drops during the session, and A-shares followed suit and weakened. Analysts attributed this to rising policy uncertainty following the U.S. midterm elections, compounded by a persistently strong dollar index, which weighed on investor confidence. After several consecutive days of gains, short-term profit-taking emerged. Toward the close, defensive styles reemerged, with Industrial and Commercial Bank of China, Bank of China, and China Construction Bank strengthening. The underlying index of the Bank ETF (512800) managed by Huabao turned positive and closed higher, reclaiming all moving averages. In addition, defense and agriculture sectors were active, with the agriculture, animal husbandry, and fishery sector continuing to play out cyclical reversal expectations. Haodangjia hit the daily limit, and the underlying index of the Agriculture, Animal Husbandry and Fishery ETF (159275) managed by Huabao rose against the market trend. As the Zhuhai Airshow approaches, expectations for military trade and new equipment have intensified. Great Wall Military Industry hit the daily limit, and the underlying index of the Defense ETF (512810) managed by Huabao probed 1% higher intraday.
According to the密集 strategist meetings for the 2027 outlook held by brokerages, balanced allocation has become the mainstream approach. China Securities stated that the A-share market in 2027 is expected to exhibit range-bound fluctuations and structural opportunities, recommending a "balanced allocation and flexible adjustment" strategy, with attention to periodic opportunities in AI computing power, dividend assets, energy and chemicals, defense, and domestic consumption.
ETF Spotlight: Key Sector Reviews
Below is a focused discussion on the trading and fundamentals of the STAR chip, defense, and ChiNext AI sectors.
Intraday Rally Fades, GPU Stocks Defiantly Lead Gains, Cambricon Up Over 8%! STAR Chip ETF (589190) Underlying Index Peaks at 6%
On November 12, AI chip stocks rallied before pulling back, with Cambricon Technologies surging 13% intraday and reclaiming the 1,000 yuan share price level before closing up 8.11%. Muxi Integrated Circuit, Moore Threads, and others also surged collectively. Additionally, CSSC Specialty Gas showed notable strength, rising over 16% at one point intraday and closing up 9.37%, as downstream wafer fab expansion drives sustained growth in electronic specialty gas demand. Among popular ETFs, the STAR Chip ETF (589190) managed by Huabao, which covers the entire chip industry chain and has relatively low fees among similar products, surged on heavy volume, with its underlying index rising over 6% at one point before closing up 1.38%.
Strong demand-side validation both domestically and internationally, combined with supply-side expectation fluctuations triggered by the Nvidia incident, has jointly supported the logic of domestic chip substitution. Overseas cloud service provider CoreWeave reported robust latest earnings growth, with quarterly revenue of $3.66 billion, up 168% year-over-year, exceeding market expectations; its backlog of orders reached approximately $132.5 billion, setting a new historical high. Domestically, China Mobile recently made clear that computing power represents the company's largest investment increment, with computing power investment exceeding 100 billion yuan in 2027 and total procurement scale expected to surpass 500 billion yuan in 2027. On the supply side, affected by the Nvidia incident, U.S. lawmakers once again called for tightening restrictions on China's access to advanced AI chips, and reports emerged that Nvidia discussed removing CEO Jensen Huang. Against the backdrop of rising uncertainty in the global semiconductor supply chain, the importance of chip self-sufficiency has become even more prominent. IDC data shows that in the first half of 2026, Nvidia's share of China's data center AI chip market fell to 34%, with shipments of 678,000 units, down 44% year-over-year. The domestic substitution rate for AI chips is expected to continue rising.
AI chips are the physical载体 for large model training and inference. Currently, domestic computing power is in a period of resonance between market share gains and earnings realization, with policy, capital, and demand all driving accelerated industry development. Tianfeng Securities stated that high AI demand prosperity is driving the semiconductor industry into a new round of capacity expansion cycle, with the semiconductor expansion cycle plus accelerated domestic substitution, maintaining a positive outlook on self-sufficiency. Galaxy Securities believes that AI hardware has already shown a significant divergence between fundamentals and stock prices, and the industry has the fundamental basis for an oversold rebound. Entering November, the market focus will shift from thematic expectations to real earnings realization, with key attention to directions that have already verified profitability in Q3 reports, continued prosperity in Q4, and matched valuations, focusing on the window for AI oversold recovery.
For investors, selecting among chip sub-sectors is difficult, so it may be better to use an index covering the entire chip industry chain for one-click allocation. The STAR Chip ETF (589190) managed by Huabao passively tracks the Shanghai Stock Exchange STAR Chip Index, covering the entire chip industry chain, with heavy positions in core segments such as AI chips, storage, and semiconductor equipment and materials. It can effectively map the industry development trends brought about by the continuous upgrading of AI computing power infrastructure, offering strong offensive characteristics and 20CM high elasticity. Off-exchange investors can follow the feeder fund 021225. Public data shows that the STAR Chip ETF (589190) managed by Huabao has a management fee of 0.3%, a custody fee of 0.08%, and a comprehensive fee of 0.38%, which is relatively low among ETFs tracking the same underlying index.
Airshow Boosts Military Trade Expectations, Great Wall Military Industry Hits Daily Limit! Defense ETF (512810) Underlying Index Attracts Funds for 13 Consecutive Weeks! Institutions: Defense Sector Attention May Continue to Rise
A-share market saw a sudden plunge in the afternoon, with the defense sector following the market lower. The underlying index of the Defense ETF (512810) managed by Huabao probed 1% higher before noon but continued to decline in the afternoon, ultimately closing down 0.71% and losing the 5-day moving average. Although it failed to close positive, the decline was smaller than most industries in the broader market and significantly smaller than the ChiNext Index (-2.44%). Constituent stocks fell more than they rose, showing significant divergence. Great Wall Military Industry hit the daily limit, Inner Mongolia First Machinery and Huafeng Technology rose over 4%, and AVIC Chengdu Aircraft gained 2.16%. China Satellite fell 2.8%, Raytron Technology dropped 3%, and China Great Wall declined 1%.
The defense sector's turn from gains to losses today was likely primarily due to two overlapping factors: first, a decline in overall market risk appetite, with capital rotating from high-beta growth sectors to defensive directions such as food and beverage, agriculture, forestry, animal husbandry and fishery, and banking; second, after significantly outperforming the CSI 300 last week, short-term accumulated profits chose to cash out in the absence of new catalysts. The structural highlight was Great Wall Military Industry hitting the daily limit, directly triggered by rising expectations for military trade and new equipment as the Zhuhai Airshow approaches. Some analysts noted that a stock hitting the daily limit against the market trend indicates that capital has not systematically withdrawn, but rather rebalanced from high-valuation thematic stocks to leaders with earnings support and low-position military trade elastic targets.
Looking ahead, Sinolink Securities latest view expressed continued optimism on the defense sector, citing progress in the airshow, military trade, the 15th Five-Year Plan, and domestic large aircraft, with November catalysts accelerating and the Air Force's 77th anniversary. After mid-November, the Zhuhai Airshow may enter a concentrated disclosure window for participating equipment, and defense sector attention may continue to rise. Notably, capital has already begun to focus on undervalued opportunities. As of this week, ETFs tracking the CSI Defense Index across the market have seen net capital inflows for 13 consecutive weeks. Currently, the CSI Defense Index price has fallen back to April 2025 levels, with a price-to-earnings (TTM) valuation of 55.92 times, lower than over 75% of the time range in the past 10 years.
Investing in Defense, Choose "August 1st"
The Defense ETF (512810) managed by Huabao (formerly the National Defense ETF), with "August 1st" in its code, passively tracks the CSI Defense Index, comprehensively covering popular themes such as military trade, commercial aerospace, large aircraft, and low-altitude economy. It is also a margin trading and short selling plus interconnectivity target, serving as an efficient tool for one-click investment in core defense assets.
Optical Modules Rally Then Retreat, Orders and Demand Still Positively Validated, High "Optical" 159363 Draws High Attention! Favorable News Strikes, AI Application Leader Touches Daily Limit Against Market Trend
AI hardware broadly turned lower, with the underlying index of the ChiNext Artificial Intelligence ETF (159363) managed by Huabao, which focuses on leading optical module companies, rallying before pulling back to close down 2.65%, drawing high investor attention. Core optical module leaders gave back intraday gains, with Zhongji Innolight falling over 6%, Eoptolink Technology dropping over 4%, and Tianfu Communication declining over 2%, while Changxin Boke and O-Net Technologies rose against the market. AI applications broadly retreated, with Huace Film & TV leading losses at nearly 14%. Boosted by favorable news, BlueFocus touched the daily limit intraday and rose nearly 11% against the market trend.
Overall, the optical module sector's rally yesterday was a news-driven valuation repair impulse, and today's pullback may be a natural retreat without new catalysts. The industry trend (order coverage through 2027, customers providing 2028 guidance, overseas leaders raising guidance) has not been broken. Short-term fluctuations more reflect cooling at the sentiment and trading level rather than a shift in industry logic. Going forward, investors should track verifiable signals such as order fulfillment, customer guidance, and overseas leader operating data to judge whether the recovery can continue.
Looking ahead, overseas optical giants such as Lumentum and Coherent have continued to raise their quarterly guidance, indicating that supply-side orders have not peaked. Meanwhile, Anthropic's ARR increased by $10 billion in a single month to $81 billion, with computing power commitments of $900.9 billion, validating real demand consumption. With both ends mutually confirming each other, optical module demand has shifted from expectation to traceability, and priority may be given to high-speed optical module leaders with clear orders, mass production capabilities, and delivery records.
In addition, AI applications weakened overall, which structurally may be related to internal high-low switching within AI rather than a negation of AI application logic. On the news front, BlueFocus's subsidiary BlueFocus Media launched cooperation with ChatGPT Ads. Looking ahead, as cooperation progresses, AI-native advertising scenarios continue to be validated, and leader earnings are gradually realized, AI applications are expected to move from thematic expectations to commercialization realization. Leaders may benefit first amid divergence, and a recovery rally in the application side is worth anticipating.
To position in optical module leaders, it is recommended to follow the ChiNext Artificial Intelligence ETF (159363) managed by Huabao and its off-exchange feeder funds (Class A 023407, Class C 023408). The underlying index focuses on optical module CPO leaders while also covering AI applications. Among them, the combined weight of "Zhongji Innolight + Eoptolink Technology + Tianfu Communication" is approximately 30%, making it a core flagship for AI computing power.
Note: As of October 31, 2026, according to the China Securities Index Company, the top three constituents of the ChiNext Artificial Intelligence Index are Zhongji Innolight (weight 11.49%), Eoptolink Technology (weight 9.08%), and Tianfu Communication (weight 8.51%). Source: Shanghai and Shenzhen stock exchanges, etc., as of November 12, 2026. Fund fee rates are detailed in each fund's legal documents. Institutional views sourced from: China Securities November 12, 2026 "2027 Global Macro and Asset Allocation Outlook: Great Turning Point and Great Wave"; Tianfeng Securities November 10, 2026 "AI Hardware Manufacturing and Investment Opportunities"; Galaxy Securities November 7, 2026 "Earnings and Valuation Divergence, Focus on AI Oversold Recovery Window — Electronics Industry October Monthly Report"; Sinolink Securities November 12, 2026 "Defense Sector Catalysts Dense, Military Trade and Airshow Drive Market". According to the fund manager's assessment, the risk level of the Defense ETF (512810) managed by Huabao is R3-medium risk, suitable for balanced (C3) and above investors; the risk levels of the STAR Chip ETF (589190) and ChiNext Artificial Intelligence ETF (159363) managed by Huabao are R4-medium-high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions should be based on the sales institution's assessment. Risk disclosure: The STAR Chip ETF (589190) managed by Huabao and its feeder fund passively track the Shanghai Stock Exchange STAR Chip Index, which has a base date of December 31, 2019, and was published on June 13, 2022; the Defense ETF managed by Huabao passively tracks the CSI Defense Index, which has a base date of December 31, 2004, and was published on December 26, 2013; the ChiNext Artificial Intelligence ETF managed by Huabao passively tracks the ChiNext Artificial Intelligence Index, which has a base date of December 28, 2018, and was published on July 11, 2024. Index constituent composition is adjusted in due course according to the index compilation rules, and its back-tested historical performance does not predict future index performance. Individual stocks mentioned in this article are only objectively listed as index constituents and do not constitute any individual stock recommendation, nor do they represent the fund manager and fund investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, and the company shall not be liable 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 the fund's 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 sales institutions may not necessarily be consistent, and the fund product risk rating results 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 and fund risk rating 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 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, or returns of the funds. Fund investment involves risks and should be approached with caution. MACD golden cross signals have formed, and these stocks are performing well!
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