Where to begin
On Friday, August 7, the A-share market experienced a volatile rebound, with the Shanghai Composite Index opening lower and then closing higher, as two-way trading volume expanded to 2.66 trillion yuan. Market hotspots rotated rapidly, with over 2,800 stocks closing in positive territory. Hong Kong stocks also rallied throughout the day, closing broadly higher.
Sector-wise, CXO and innovative drugs led the rally, with flagship stocks like WuXi AppTec and BeiGene surging simultaneously in both A-shares and H-shares. In the ETF space, Hwabao's Hong Kong Stock Connect Medical ETF (159137) surged 5.51% on heavy volume, Hwabao's Medical ETF (512170) jumped 4.53% to hit a 3-month high, and Hwabao's Pharmaceutical ETF (562050) and Hwabao's Hong Kong Stock Connect Innovative Drug ETF (520880) both rose over 4.5%.
The computing hardware sector continued its recovery, with PCB stocks triggering a wave of limit-up moves. Hwabao's Electronics ETF (515260) rose nearly 4% during the session, closing 3.36% higher to notch its fourth consecutive gain. Memory chip stocks strengthened, and Hwabao's Science and Technology Chip ETF (589190) closed with a gain of over 3% for its fourth consecutive gain. Hwabao's Hong Kong Stock Connect Information Technology ETF (159131), which focuses on hard tech, closed 2.87% higher on heavy volume.
Optical module stocks were notably lifted intraday, with the high-profile ChiNext Artificial Intelligence ETF (159363) gaining nearly 1% to extend its winning streak to five consecutive days. In the final trading minutes, heavyweight Zhongji Innolight suddenly plunged, closing down over 3.5% with a single-day swing exceeding 10%. According to market sources, this unusual move was linked to competition concerns triggered by a U.S. optical module manufacturer, Applied Optoelectronics (AAOI), announcing expansion plans. From a medium-to-long-term industry perspective, the optical module sector's prosperity is still supported by multiple fundamental factors.
Why just 10 ASX 200 shares?
Looking ahead, a recent report from Guotai Junan suggested that the harsh summer winds are nearly over, and a turning point may emerge as early as the first half of August. The A-share and Hong Kong markets, which began adjusting first from mid-May, have already partially released risks. The current market has largely confirmed a bottoming zone and is transitioning into a phase of shrinking volume, grinding out a bottom, and accumulating momentum. The recommendation is to position for a left-side layout based on long-term strategic directions, using the SMART framework to screen for hard-core assets in the AI era. Key investment themes include: first, high-tech and hard-tech, anchored by the AI technology theme's divergence and spread, with selective stock picking. Second, safe-haven assets, covering key resource categories like non-ferrous metals (gold, copper, tungsten, molybdenum, rare earths), and energy. Third, the overseas expansion track, including power equipment, chemicals, and biomedicine. Fourth, selectively invest in leading companies in traditional industries with potential for improving earnings performance, recommending allocation to non-bank financial leaders, with a particular focus on securities brokers with high "AI integration."
Hot Topics Review: Key Discussion on Medical, Electronics, and ChiNext AI Sectors
Performance delivered, innovative drug chain erupts! Nearly 20 AH stocks rise over 10%, WuXi AppTec H-shares hit new highs, Hwabao's Hong Kong Stock Connect Medical ETF surges 5.51% on volume!
Pharmaceuticals exploded, with the entire innovative drug chain breaking out. Hwabao's Hong Kong Stock Connect Medical ETF (159137), Hwabao's Hong Kong Stock Connect Innovative Drug ETF (520880), Hwabao's Medical ETF (512170), and Hwabao's Pharmaceutical ETF (562050) all surged collectively! CXO leaders mounted a strong attack, with many stocks surging over 10%! The WuXi family led the charge: WuXi AppTec's Hong Kong stock rose 7% to a record high, while its A-share gained 8.49% to a 5-year high. WuXi Biologics and WuXi XDC both rose over 10%. In A-shares, Porton Pharma Solutions hit a 20% limit-up, while Asymchem and Joinn Laboratories hit 10% limit-ups. Hwabao's Hong Kong Stock Connect Medical ETF (159137) surged 5.51% on volume, with its underlying index holding nearly 50% of its weight in CXO leaders, including the WuXi family (WuXi AppTec, WuXi Biologics, WuXi XDC) accounting for over 35% weight. Hwabao's Medical ETF (512170), with a CXO exposure of nearly 30%, jumped 4.53% to a 3-month high, achieving a turnover of 12.35 billion yuan. AH innovative drug stocks advanced simultaneously. Hwabao's Pharmaceutical ETF (562050), which focuses on A-share innovative drugs, and Hwabao's Hong Kong Stock Connect Innovative Drug ETF (520880), which is fully invested in Hong Kong-listed drugs, both rose over 4.5%. BeiGene's A-share surged 11.28%, and its H-share rose 5.26%. Zai Lab in Hong Kong skyrocketed 18.35% after its earnings release.
This week, innovative drugs and their industrial chain saw a particularly dense cluster of catalysts, with interim earnings performance likely being the core driver. Key highlights include: CXO leader WuXi AppTec's earnings exceeded expectations, with its half-year net profit attributable to the parent company surpassing 100 billion yuan for the first time, reaching 110.8 billion yuan, a 29.43% year-on-year increase. The company also raised its full-year 2026 guidance, increasing the upper end of total revenue target from 530 billion yuan to 605 billion yuan. On August 6, WuXi Biologics announced the acquisition of CDMO assets from Yian Jishou to supplement capacity. For innovative drugs, BeiGene's commercialization continued to deliver results, with half-year net profit attributable to the parent company reaching 32.71 billion yuan, a 627.1% year-on-year increase. It also raised its full-year revenue forecast to 44.9 billion to 46.2 billion yuan. Zai Lab's interim report showed it achieved commercial profitability, with Q2 net product revenue reaching $105.8 million, an 11% quarter-on-quarter increase. China Merchants Securities research report suggests continued optimism for the innovative drug industry trend, noting the sector has transitioned from an early oversold rebound to a bull market driven by fundamentals and industry trends, with the impact of market style and capital rotation gradually weakening. With the arrival of the interim reporting season and expectations for innovative drug pipeline catalysts, the outlook for the pharmaceutical sector remains positive. For full-chain exposure to innovative drugs, ETFs offer higher efficiency. For innovative drug investments, look to the T+0 tradable Hwabao's Hong Kong Stock Connect Innovative Drug ETF (520880), which excludes CXO and is 100% invested in innovative drug R&D companies, with 70% of its positions betting on innovative drug R&D leaders. For A-share innovative drug opportunities, focus on Hwabao's Pharmaceutical ETF (562050), the only ETF tracking the pharmaceutical index, with an innovative drug content exceeding 72%. For CXO exposure, consider the T+0 tradable Hwabao's Hong Kong Stock Connect Medical ETF (159137), with a CXO content over 48%, including over 35% weight in the WuXi family. For A-share CXO opportunities, look to Hwabao's Medical ETF (512170), the largest medical ETF in the entire market, covering 8 CXO leaders with a combined weight of nearly 30%.
PCB is no longer a supporting role! Goldman Sachs report raises market expectations + Nvidia's Rubin architecture drives; Hwabao's Electronics ETF (515260) surged nearly 4% to secure a 4-day winning streak!
The electronics sector saw net capital inflows of over 308 billion yuan from the entire market, ranking first among the 31 Shenwan primary industries. Hwabao's Electronics ETF (515260), which gathers the core leaders of the electronics sector, briefly surged 3.94% intraday before closing 3.36% higher, reclaiming its 20-day moving average and successfully achieving a four-day winning streak. Among its constituent stocks, PCB (Printed Circuit Board) leaders significantly outperformed, occupying 7 of the ETF's top 10 gainers. Shengyi Technology and Kinwong Electronic hit their daily limit-ups, Victory Giant Technology rose over 12%, and Shengyi Electronics, Shennan Circuits, and WUS Printed Circuit followed with substantial gains. Memory chip concept stocks also performed well, with GigaDevice rising over 8%, and Longsys and Biwin Storage gaining over 5%.
Why did PCB surge so much? Likely due to a Goldman Sachs report and Nvidia's Rubin ramp-up. On August 6, Goldman Sachs significantly raised its forecast for the PCB market size in a recent report. The investment bank expects the global AI server PCB market to reach $37.5 billion by 2027, a 38% upward revision from its previous forecast, and further increase to $84 billion by 2028. Additionally, Nvidia's Rubin AI server has reached the starting point of mass production, with the first batches of cabinets already deployed at data centers like OpenAI and Google. It is estimated that by the end of December, the total shipments for the full year 2026 could reach 8,000 complete cabinets, reflecting the acceleration of AI infrastructure construction driving PCB demand recovery. Industry insiders point out that the most important signal from the Goldman Sachs report is the redefinition of the value anchor for AI hardware. The value center of gravity in the AI industrial chain is shifting from "computing power chips" to "interconnect infrastructure." When the PCB value in a single AI rack reaches hundreds of thousands of dollars, PCB is no longer a supporting actor but a key hardware determining the performance of AI clusters. CITIC Securities believes that driven by AI, the global PCB industry is entering a new upward cycle. With the increasing demand for orthogonal backplanes and the upgrade of CoWoS processes, PCB will become more akin to semiconductors, with its value steadily increasing. Cloud vendors like Amazon, Meta, and Google have weaker in-house chip design capabilities than Nvidia, requiring higher material requirements for PCBs, offering more elastic value.
On the other hand, the question of whether the memory chip price increase trend can be sustained continues to be a market focus. Sinolink Securities predicts that the memory upcycle could extend to 2027, primarily due to sustained supply tightness. Large model training and inference generate massive storage demand, while foundries face constraints in construction and equipment procurement, requiring about two years for new capacity to come online. Original equipment manufacturers cannot match the speed of demand explosion with their expansion pace, and the supply-demand gap will support memory prices and scale reaching new heights. With price increases, AI, and self-sufficiency potentially running through the entire year for the electronics sector, Hwabao's Electronics ETF (515260) and its feeder funds (Class A: 012550, Class C: 012551) passively track the SSE Electronics 50 Index, heavily investing in semiconductors, components, and consumer electronics. It includes popular concepts like PCB (e.g., Dongshan Precision), memory chips (e.g., Longsys), semiconductor equipment (e.g., ACMR Shanghai), advanced packaging (e.g., JCET Group), glass substrates (e.g., BOE Technology), semiconductor silicon wafers (e.g., NSIG), and MLCC (e.g., Sanyang Group), deeply tying itself to global technology leaders, with constituent stocks serving the Apple, Nvidia, and Google supply chains.
High "light" Hwabao's ChiNext Artificial Intelligence ETF (159363) gains nearly 1% for a 5-day winning streak! Zhongji Innolight suddenly plunges at the close; what happened?
The ChiNext Artificial Intelligence Index continued its rebound. AI application concept stock Chinese Online led the gains, rising nearly 7%, while storage leaders Longsys and Ingenic Semiconductor both rose over 5%. Optical module CPO leaders were notably lifted intraday, with Tianfu Communication closing up over 2%. However, Zhongji Innolight suddenly plunged at the close, falling over 3.5% with a single-day swing exceeding 10%. Among the popular ETFs, Hwabao's ChiNext Artificial Intelligence ETF (159363), which heavily invests in optical module leaders, briefly surged nearly 3% intraday, but was dragged down by the leader's plunge, briefly turning red before quickly recovering to close nearly 1% higher, successfully achieving a five-day winning streak. Zhongji Innolight's afternoon plunge may be linked to a piece of news. It is reported that the earnings report and conference call of U.S. optical module manufacturer Applied Optoelectronics (AAOI) revealed a massive expansion plan, raising concerns about the industry's competitive landscape. AAOI's conference call indicated its goal is to triple monthly production capacity this year, requiring more automated equipment for expansion. AAOI plans to produce 650,000 units of 800G/1.6T products per month by year-end, and increase capacity tenfold next year, sparking concerns about its long-term potential to capture market share from domestic manufacturers. Although some analysts argue its short-term impact is limited and its technology relies on leading domestic companies, this negative rumor still triggered the stock price decline.
Focusing on the optical module sector as a whole, three factors support its medium to long-term prosperity: First, capital expenditure upgrades confirm industry prosperity, and high cloud revenue growth validates commercial viability. CITIC Securities believes that as cloud vendors' earnings continue to confirm AI's driving force on business growth, AI cluster scale will further expand. Optical interconnection, as a crucial part of the cluster network, will continue to experience rapid growth driven by three factors: increased GPU allocation ratios, port speed upgrades, and the "light replacing copper" trend. The brokerage is optimistic about the medium to long-term prospects of the optical communication sector. Second, optical interconnection continues to intensify, with the mass production of CPO accelerating cluster restructuring. Kaiyuan Securities research indicates that Nvidia's Rubin Ultra's focus on NVL576-level large-scale interconnection, with the system form consisting of 8 interlinked 72-GPU racks using NPO for cross-rack connections. Meanwhile, CPO has entered mass production and will be heavily integrated into global AI factories in the second half of the year, potentially accelerating the penetration of optical interconnection technology and driving a structural revaluation of optical communication value. Third, valuations are attractive after adequate adjustments, and clearing positions lays a foundation for recovery. Guosheng believes that the previously overly crowded trading structure in the optical module sector is improving, with short-term risks having been largely released. However, sufficient turnover and rebalancing in the bottoming zone will still take time. The subsequent need is to wait for the gradual accumulation of positive factors and the gradual recovery of market confidence. On the main AI trading theme, besides computing power sectors like optical modules, AI applications are also worth focusing on. Referencing the U.S. SaaS benchmark, Palantir's quarterly results exceeded expectations, leading to a significant surge, as the market assigns a high premium to AI application implementation capabilities. The ChiNext Artificial Intelligence Index gathers many "software + hardware" combination targets (e.g., industry-specific vertical applications). Compared to pure hardware communication, it benefits more from the dual logic of application-layer performance delivery and valuation system reshaping. Hwabao's ChiNext Artificial Intelligence ETF (159363) and its over-the-counter feeder funds (Class A: 023407, Class C: 023408) focus on optical module CPO leaders while also considering AI applications. The underlying index's weight in "Zhongji Innolight + Eoptolink Technology + Tianfu Communication" is approximately 40%, making it a core player in AI computing power. Additionally, Hwabao's ChiNext Artificial Intelligence ETF (159363) has a latest scale of over 74 billion yuan, with an average daily turnover of over 10 billion yuan in the past six months, leading the 8 ETFs tracking the same underlying index in scale and liquidity. Note: Fees are detailed in the legal documents of each fund. Data sources: Shanghai and Shenzhen stock exchanges, CSI Index, Guozheng Index, Hang Seng Index Company, etc., as of August 7, 2026. Fund scale and weight data as of July 31, 2026. Hwabao's Medical ETF (512170) has a scale of 260.45 billion yuan, making it the largest medical and healthcare ETF in the entire market. Reminder: Recent market volatility may be significant. Short-term gains and losses do not predict future performance. Investors must make rational investments based on their own capital positions and risk tolerance, paying close attention to position and risk management. *Institutional views reference sources: Guotai Junan "Is it a rebound or an index-level reversal? Zhang Yidong's latest view: The bottom zone has been largely confirmed"; China Merchants Securities August 2, 2026 "Biomedical Industry Weekly Report: Optimistic about the pharmaceutical sector's outlook during the interim reporting season, recommending innovative drugs, CXO, upstream, and pharmacies"; Goldman Sachs August 6 "Goldman Sachs: Significantly raises forecasts for AI server PCB and CCL market space"; CITIC Securities July 7 "PCB Industry: AI PCB demand is ramping up, high-end upgrade trend is clear, opening new space for equipment and consumables"; Sinolink Securities June 14 "Electronic Industry Research: Strong AI demand, memory price increase trend is expected to continue"; CITIC Securities "AI investment return cycle is emerging, firmly optimistic about the optical communication sector"; Kaiyuan Securities "The time for optical communication allocation has arrived"; Guosheng Securities "Optics: Panic exhaled, the worst is over, good times come." Risk Warning: Hwabao's Electronics ETF (159263) passively tracks the CSI Electronics 50 Index, which was established on December 31, 2008, and launched on July 22, 2009. Hwabao's ChiNext Artificial Intelligence ETF (159363) passively tracks the ChiNext Artificial Intelligence Index, which was established on December 28, 2018, and launched on July 11, 2024. The composition of index constituents is adjusted according to the index's compilation rules. Historical backtest performance does not represent future index performance. The stocks mentioned in this article are solely for objective display of index constituents and do not constitute any stock recommendation. They do not represent the fund manager's or fund's investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must be responsible for their own independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses arising from the use of this article. Investors should carefully read the Fund Contract, Prospectus, Fund Product Information Summary, and other fund legal documents to understand the fund's risk-return characteristics and select products that match their risk tolerance. Past performance of a fund does not indicate its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. According to the fund manager's assessment, Hwabao's ChiNext Artificial Intelligence ETF, Hwabao's Hong Kong Stock Connect Information Technology ETF, Hwabao's Science and Technology Chip ETF, Hwabao's Hong Kong Stock Connect Innovative Drug ETF, and Hwabao's Hong Kong Stock Connect Medical ETF have a risk rating of R4-medium-high risk, suitable for investors with an aggressive (C4) rating or above. Other funds mentioned in this article have a risk rating of R3-medium risk, suitable for investors with a balanced (C3) rating or above. The opinion on suitability matching is subject to the sales institution's determination. Sales institutions (including the fund manager's direct sales and other sales institutions) will conduct risk assessments on the above funds based on relevant laws and regulations. Investors should promptly pay attention to the suitability opinion issued by the fund manager. The opinion on suitability from different sales institutions may not be consistent, and the risk rating of fund products issued by fund sales institutions shall not be lower than the risk rating result issued by the fund manager. The fund's risk-return characteristics and risk rating in the fund contract may differ due to different factors considered. Investors should understand the fund's risk-return situation, combined with their own investment objectives, time horizon, investment experience, and risk tolerance, to carefully choose fund products and bear the risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Fund investment requires caution. MACD golden cross signal formed, these stocks are performing well!
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