China's three major A-share indices delivered a mixed performance on August 21, with the Shanghai Composite oscillating around the 3900-point mark before closing 0.04% higher at 3905.20 points. The Shenzhen Component Index rose 0.87%, while the ChiNext Index advanced 1.43%. Total turnover across the Shanghai, Shenzhen, and Beijing exchanges reached 1.89 trillion yuan, marking a contraction of over 200 billion yuan compared with the previous session.
Sector performance was varied, with non-ferrous metals leading the market's gains as Hunan Silver and Silver China both hit their daily price limits. Energy storage battery stocks also performed strongly, with "AIDC transformer leader" Jinpan Technology surging nearly 13% and "AI power supply leader" Megmeet climbing over 8%. Optical module and CPO names rallied sharply, with Eoptolink Technology closing up 6.76% and Zhongji Innolight gaining more than 4%. On the downside, pharmaceutical, agriculture, and food and beverage sectors weighed on the broader market.
Despite recent turbulence in the tech sector, Ping An Securities noted that fundamental indicators from the past two months suggest the AI industry remains in a high-prosperity phase, with institutional earnings forecasts still being revised upward. The AI technology mainline is unlikely to fade until this fundamental trend is disproven. From a valuation perspective, following the "de-leveraging and de-crowding" adjustment since July, some AI sub-sectors and quality leaders have become more attractively priced, potentially opening a medium-to-long-term window for allocation.
Looking ahead, Tianfeng Securities pointed out that valuation attractiveness has improved following the market's recent correction. With regulators closely monitoring market dynamics and long-term capital actively entering the market, the policy bottom appears to be taking shape, though the pace and strength of transmission from the policy bottom to the market bottom requires close observation.
US Treasury Shift Ignites Metals Rally, Gold and Lithium Advance Together
The non-ferrous metals sector led the entire market, attracting net main capital inflows exceeding 13.1 billion yuan, ranking second among all 31 Shenwan primary industries. Constituent stocks of the Nonferrous Metals ETF HuaBao (159876) saw Hunan Silver and Silver China hit limit-up, Guocheng Mining climb over 8%, Chifeng Gold rise more than 7%, and Shengxin Lithium Energy gain over 6%. Among heavyweights, Zijin Mining and Aluminum Corporation of China advanced more than 2%, while CMOC Group rose over 1%.
On the macro front, as US long-term Treasury yields moved higher, US Treasury Secretary Bessent indicated on the evening of August 20 that the single-purchase limit for debt buybacks could exceed the announced $4 billion, adding that the Treasury possesses a robust toolkit for the bond market and could shed its debt burden through its own development. Treasury yields fell in response, extending gold's advance. Market interpretation suggests the Treasury's forced bond buyback exposed fiscal fragility regarding debt rollover, potentially strengthening de-dollarization narratives as doubts grow over US debt and fiscal sustainability. The buyback also signaled an implicit ceiling on long-end rates, with falling real yields reducing the opportunity cost of holding commodities like gold, while the "fiscal dominance" narrative could further benefit non-ferrous metals pricing.
In the gold segment, spot gold traded above $4,560 per ounce. Tianfeng Securities noted that from a global reserve structure perspective, Treasuries and gold may be viewed as substitutes. Following the Treasury's August 19 announcement of expanded long-bond buybacks, COMEX gold futures broke above $4,500 per ounce, potentially opening further upside and attracting momentum capital if prices hold above that level. In the lithium sector, the GFEX lithium carbonate main contract rose 4.12% to 158,700 yuan per tonne, accumulating a 12% gain since the early August low. Industry sources indicate that global lithium supply has continued to contract since 2026, while rapid growth in EV and energy storage demand has sustained a tight supply-demand balance domestically. CITIC Securities believes the non-ferrous metals sector is in a favorable window of "supply constraints plus demand recovery," with lithium prices stabilizing at lows, copper and aluminum inventories at depressed levels, and gold prices rising—all sub-sectors offering allocation value.
Strong Earnings and Position Building Set Stage for Rebound
Given the varying fundamentals, momentum, and catalysts across different metals, investors seeking broad exposure may consider the Nonferrous Metals ETF HuaBao (159876) and its feeder funds (Class A: 017140, Class C: 017141), which comprehensively cover copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. The fund spans precious metals, industrial metals, energy metals, and strategic minor metals, with major holdings including Zijin Mining, CMOC Group, China Northern Rare Earth, Aluminum Corporation of China, and Zhongjin Gold. As a margin trading eligible ETF, it serves as an efficient tool for one-click exposure to the non-ferrous metals sector.
AIDC Transformer Leader Surges as August Lithium Battery Output Exceeds 300GWh
The energy storage battery sector rebounded strongly, with the benchmark index of the New Energy Battery ETF HuaBao (159071) staging a solid recovery amid markedly improved sentiment. Of the index's 50 constituents, 43 advanced while only 7 declined. "AIDC transformer leader" Jinpan Technology jumped nearly 13% on strong earnings, "AI power supply leader" Megmeet gained over 8%, and Tongfei and Star Cloud both rose more than 6%.
Multiple catalysts have converged to boost sector sentiment. Leader earnings have exceeded expectations: CATL reported first-half 2026 revenue of 276.9 billion yuan, up 55% year-on-year, with net profit attributable to shareholders of 800 million yuan, up 42%, while battery shipments surpassed 432GWh with global market share continuing to climb. EVE Energy projects first-half net profit growth of 95% to 110%, with scaled delivery of 628Ah large-capacity cells accelerating. Industry production data continues to beat expectations: according to GGII data, August domestic lithium battery output has surpassed 300GWh, up approximately 7%-9% month-on-month, with energy storage cell output exceeding 120GWh and accounting for 40% of the total, as US and Middle East markets enter concentrated stockpiling ahead of year-end grid connections. A cell price increase cycle has officially begun: CATL's official store raised its 314Ah energy storage cell quote from 0.414 yuan/Wh to 0.423 yuan/Wh, a 2.17% increase, signaling the industry's shift from oversupply to tight balance. Major capacity expansion projects, including Hunan Yuneng's 24 billion yuan mining-integrated project and Sunwoda's 200GWh super factory in Shandong, demonstrate leaders' confidence in future demand.
Guohai Securities research suggests that simultaneous production increases and price hikes represent a key indicator of the lithium battery industry entering a prosperity cycle in the second half. The current cell price increase reflects a structural shift driven by energy storage demand succeeding power batteries as the core growth engine, combined with new consumption tax policies. August's better-than-expected production data has solidified the third-quarter peak season foundation, with strong demand certainty supported by both storage and EV drivers. The benchmark index of the New Energy Battery ETF HuaBao (159071) currently trades at approximately 24 times PE, around the 50th percentile of the past three years, offering reasonable valuation appeal. Central China Securities recommends sustained focus on sub-sector leaders given the clear medium-to-long-term growth prospects of the new energy vehicle industry, while closely monitoring commercialization progress of solid-state and sodium-ion battery technologies. The report also flags risks from upstream raw material price trends, monthly sales data, and policy changes domestically and abroad.
The New Energy Battery ETF HuaBao (159071) tracks the Guozheng New Energy Battery Index, where power equipment accounts for over 80% of weight, covering upstream and downstream energy storage battery industries. Top ten constituents include CATL, EVE Energy, Envicool, and Sungrow, together accounting for over 60% of the index weight.
Leaders Stir as CPO Benefits from Twin Catalysts
Optical module and CPO names rallied strongly, with Eoptolink Technology closing up 6.76% and Zhongji Innolight gaining over 4%. The ChiNext AI ETF HuaBao (159363), heavily weighted toward optical module CPO leaders, saw on-exchange turnover exceed 1.4 billion yuan with notable volume expansion. Co-packaged optics (CPO) is benefiting from dual catalysts. First, Nvidia announced full-scale production of its Spectrum-X Ethernet silicon photonics switches, delivering on its "world's first mass-produced CPO switch" promise. Second, SK Hynix noted that CPO is key to system-level HBM innovation scaling, with next-generation AI infrastructure extending optical interconnect to memory interfaces. Guotai Haitong Securities points out that vertical scale-up optical interconnect technologies centered on CPO and NPO have officially entered commercial deployment, opening entirely new incremental markets. The value of optical interconnect in AI computing clusters is expected to continue rising, with 2026 marking an important inflection point for the industry. The firm believes mature existing products will achieve volume growth in current scenarios while CPO and NPO frontier products simultaneously reach mass production, creating dual-driven growth opportunities, and recommends focusing on high-barrier sub-sectors and industry leaders.
The ChiNext AI ETF HuaBao (159363) and its off-exchange feeder funds (Class A: 023407, Class C: 023408) focus on optical module CPO leaders while also covering AI applications. The benchmark index contains approximately 40% combined weight in Zhongji Innolight, Eoptolink Technology, and Accelink Technologies, positioning it as a core AI computing power holding.
Note: As of August 19, 2026, the top three constituents of the ChiNext AI Index are Eoptolink Technology (13.16%), Zhongji Innolight (12.84%), and Accelink Technologies (11.01%), according to Guozheng Index data.
Investors should note that when subscribing or redeeming fund shares, the authorized broker may charge commission of up to 0.5%, which includes fees charged by securities exchanges and registration institutions. Fund fee details are available in the fund's legal documents.
Institutional viewpoints are drawn from: Ping An Securities August 21 research report "Re-examining the AI Industry Chain: The Divide in Market Pricing"; Tianfeng Securities August 20 research report "Attack Bull: Another Offensive in H2"; Guohai Securities August 15 "Power Equipment Industry Weekly"; Central China Securities August 19 "Lithium Battery Industry Monthly"; Guotai Haitong "US Optical Communications Company Earnings Guidance Beats Expectations, NPO Demand Clear, Continued Optimism on Communications Turning Point"; Tianfeng Securities August 21 morning briefing "Tianfeng MorningCall 0821"; CITIC Securities July 3 "Q3 Commodities Outlook".
Risk Disclosure: The New Energy Battery ETF HuaBao passively tracks the Guozheng New Energy Battery Index (base date December 31, 2014; published February 16, 2015). The Nonferrous Metals ETF HuaBao passively tracks the CSI Non-Ferrous Metals Index (base date December 31, 2013; published July 13, 2015). The ChiNext AI ETF HuaBao passively tracks the ChiNext AI Index (base date December 28, 2018; published July 11, 2024). Index constituent composition adjusts according to index compilation rules, and backtested historical performance does not indicate future index performance. Companies mentioned are objective displays of index constituents only and do not constitute stock recommendations or represent the fund manager's investment direction. Any information in this article (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors bear sole responsibility for their independent investment decisions. Additionally, any views, analyses, or forecasts herein do not constitute investment advice of any form to readers, and the company assumes no liability for direct or indirect losses arising from use of this content. Investors should carefully read the Fund Contract, Prospectus, Fund Product Information Summary, and other fund legal documents to understand risk-return characteristics and select products appropriate to their risk tolerance. Past fund performance does not indicate future results, and performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Per fund manager assessment, the Nonferrous Metals ETF HuaBao and New Energy Battery ETF HuaBao carry R3-medium risk ratings suitable for balanced (C3) and above investors; the ChiNext AI ETF HuaBao carries an R4-medium-high risk rating suitable for aggressive (C4) and above investors. Suitability matching opinions are subject to sales institution determinations. Sales institutions (including the fund manager's direct sales and other distributors) conduct risk assessments per applicable regulations. Investors should promptly review the fund manager's suitability opinions. Sales institution suitability opinions may not be consistent, and risk ratings from sales institutions shall not be lower than those determined by the fund manager. Fund contract risk-return characteristics and risk ratings may differ due to varying considerations. Investors should understand fund risk-return profiles and carefully select fund products based on their investment objectives, horizons, experience, and risk tolerance, assuming all risks themselves. Registration of these funds with the CSRC does not constitute a substantive judgment or guarantee of investment value, market prospects, or returns. Fund investment requires caution.
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