Recent days have seen a flurry of positive earnings announcements from A-share companies. As of July 20th, among the 60 constituent stocks of the benchmark index for the Non-Ferrous Metals ETF Huabao (159876), all 39 constituents that have announced their H1 2026 earnings forecasts are projecting both profitability and growth. Zijin Mining Group leads the pack with a projected maximum net profit attributable to shareholders of 39.1 billion yuan, followed by China Molybdenum Co., Ltd. and Aluminum Corporation of China Limited with projected maximums of 16.5 billion and 12.2 billion yuan, respectively.
It is worth noting that the benchmark index for the Non-Ferrous Metals ETF Huabao (159876) gathers several key investment themes with significant potential.
HALO Trading Logic: Tangible Hard Assets Difficult for AI to Replace
The logic of HALO trading (heavy assets, low obsolescence) involves going long on tangible hard assets that are both difficult for AI to replace and highly relied upon by AI. The non-ferrous metals sector, characterized by its heavy-asset nature, scarcity of strategic resources, and essential role in AI infrastructure, stands as a core beneficiary of this HALO trading strategy.
Computing Metals: Frontier Technologies Like AI Reshape Demand
The explosive growth in AI computing power and optical communications is transforming materials like solder paste and high-end computing copper foil from traditional industrial goods into strategic assets for the digital economy. Sectors such as aerospace and embodied intelligence are driving rigid demand for rare-earth permanent magnets, titanium alloys, and high-temperature alloys. The push for semiconductor self-sufficiency is opening a window for domestic substitution of ultra-high-purity tungsten hexafluoride, with order releases accelerating.
Scarce Strategic Metals: Policy Reinforcement Creates Supply Constraints
China's "Regulations for the Implementation of the Mineral Resources Law" came into effect in June 2026, formally listing 36 critical minerals, including rare earths, tungsten, lithium, cobalt, gallium, and germanium, in the national strategic mineral catalog. This creates a long-term synergy between supply constraints and strategic demand.
In terms of market performance, since hitting its historical high of 4282.17 on January 29th, the Non-Ferrous Metals ETF Huabao (159876) has undergone a cumulative correction of 37.79%, erasing all gains made in the current year and the fourth quarter of last year, and falling back to prices seen last September. Huatai Securities points out that the relative valuation of the non-ferrous metals sector is currently at a historical low, suggesting potential for valuation repair*. CITIC Securities believes that the non-ferrous metals sector, as one of the most severely impacted earlier, is poised for a rebound, and coupled with mid-year earnings expectations, the sustainability and strength of the future rebound may exceed previous instances*.
Positive Earnings and Low Prices Set Stage for Potential Rebound
Different non-ferrous metals exhibit varying levels of prosperity, cycles, and driving factors, making divergence inevitable. For those bullish on the sector, a relatively straightforward approach to capture the broader beta of the entire industry is through comprehensive coverage. The Non-Ferrous Metals ETF Huabao (159876) and its feeder funds (Class A: 017140; Class C: 017141) track an index that comprehensively covers industries such as copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. This full-category coverage allows for better capture of the sector's beta. Furthermore, this ETF is eligible for margin trading and short selling, serving as an efficient tool for a one-click allocation to the non-ferrous metals sector.
As of June 30, 2026, the Non-Ferrous Metals ETF Huabao (159876) had a latest size of 1.345 billion yuan, with an average daily turnover of 107 million yuan over the past six months. Among all ETFs tracking the CSI Non-Ferrous Metals Index in the market, it is the largest and most liquid ETF.
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