On August 31, the Ministry of Industry and Information Technology released a notice on launching a special initiative to nurture AI application service providers, marking the country's first national-level policy focused specifically on this sector. The initiative calls for driving large-scale deployment by guiding providers to package modular, standardized solutions around high-frequency, essential, and reusable business functions, creating a batch of "agile, precise, and efficient" AI products and services. It also encourages expanding procurement of large models, intelligent agents, and token services through models such as first-purchase incentives and risk compensation mechanisms.
The initiative sets clear targets, aiming for over 2,000 service providers in the national resource pool by the end of 2026, with a well-structured and collaborative multi-tier system, and at least 3,000 providers by the end of 2027, supporting a comprehensive AI application service ecosystem. AI applications refer to the industry layer that embeds large models and other AI technologies into software and services across office, finance, healthcare, education, and more, delivering intelligent solutions to users. As domestic large models iterate faster and token pricing becomes clearer, AI applications are shifting from technical validation to commercial scale deployment, and this initiative brings service providers into the national development framework as a key delivery link.
On the industry front, commercialization of domestic large models is accelerating. In mid-August, DeepSeek's V4 Pro official version launched with a price increase, signaling a shift from growth driven by subsidies to sustainable monetization. Overseas, U.S. AI giant Anthropic saw second-quarter revenue surpass $11.5 billion, up more than 13 times year-over-year, validating real paid demand for AI applications. Guojin Securities highlights that stronger open-source models and falling token costs are favoring AI applications, with vendor barriers and advantages becoming more pronounced, and deployment accelerating across multiple fronts. The firm recommends watching enterprise AI, cloud, AI infrastructure, AI office tools, and AI for science. Essence Securities argues that China's AI industry is moving from technological catch-up to commercialization, with 2026 a pivotal year, driven by scenario-specific demand where competition is not a zero-sum game: major tech firms control computing power and general models, while vertical players anchor themselves in high-barrier niches and deliver comprehensive solutions. Token consumption is emerging as the key metric for enterprise intelligence and commercial value, with pricing power more likely to rest with vertical vendors who hold irreplaceable scenario data.
Data shows that the underlying index of Software Development ETF Huabao (159036) is fully allocated to the software development sector, with 60% dedicated to deep vertical barriers and 40% to broad-based general applications. The vertical portion, accounting for 58.2% of holdings in industry-specific application software, targets tailored solutions for government, finance, healthcare, and other specialized sectors, featuring strong professionalism and high entry barriers, such as Hithink RoyalFlush in financial IT. The general portion, at 41.8%, covers standardized software addressing cross-industry needs with broad appeal, such as Kingsoft Office for office productivity and 360 for information security.
Where the Hardware Ends, Software May See Its Spring
Across past technological revolutions, profits have consistently flowed from hardware to applications. Early this year, the narrative of "large models swallowing software" pressured AI application valuations into a discount, leaving the software development segment as a "valuation trough" within the AI supply chain, offering attractive safety margins and cost efficiency. With the software industry currently in an upward cycle, though specific sub-sectors or stocks remain uncertain, the Software Development ETF Huabao (159036) provides broad industry exposure, covering 107 constituent stocks across AI applications in finance, healthcare, office, education, information security, and government services. Supported by AI empowerment and the IT innovation initiative, the software development sector is poised to rise.
The underlying index of Software Development ETF Huabao (159036), the software development index, encompasses popular themes, with weightings as of end-July of 47.88% in AI applications, 42.77% in cloud computing, 42.43% in IT innovation, 32.73% in fintech, 16.36% in cybersecurity, and 14.44% in the HarmonyOS ecosystem. On valuation, as of the latest data, the index's trailing twelve-month P/E ratio stands at 182.89 times, below more than 70% of its historical range since listing, highlighting notable valuation appeal and safety margins. Fee details: Software Development ETF Huabao charges no sales service fee, and subscription or redemption agents may collect commissions up to 0.3% per trade, with on-exchange trading fees subject to actual broker charges.
Risk Disclosure
Software Development ETF Huabao passively tracks the CSI All Share Software Development Index, with a base date of December 31, 2021, and a release date of March 29, 2023. The fund is issued and managed by Huabao Fund, and distribution agencies do not bear responsibility for product investment or redemption. Investors should carefully review fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary to understand risk-return characteristics and select products suited to their risk tolerance. The fund manager rates this product as R3-moderate risk, suitable for balanced (C3) investors and above, with suitability alignment subject to sales institution guidelines. Sales institutions, including direct channels and others, conduct risk assessments under applicable regulations, and investors should monitor their suitability opinions; results may vary across institutions, and their risk ratings cannot be lower than those set by the fund manager. Risk-return profiles may differ from risk grades due to varying factors, and investors should evaluate risk-return conditions alongside their own goals, timelines, experience, and risk capacity, bearing risks independently. Registration with the China Securities Regulatory Commission does not imply endorsement of the fund's investment value, market prospects, or returns. Past performance and net value levels do not predict future results, and performance of other funds managed by the same manager does not guarantee this fund's performance. Funds carry risk; invest with caution!
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