On June 25th, the A-share market witnessed another session of extreme divergence between major indices and individual stock performance. The three major indices all closed in positive territory, even as over 4,200 stocks declined. The ChiNext Index gained 2.84%, while the STAR 50 Index surged 3.87%. The total market turnover reached 3.59 trillion yuan.
Chips and semiconductors saw another explosive rally. The Huabao STAR Chip ETF (589190), known for its relatively low fees*, and the Huabao Electronics ETF (515260), which includes popular concepts like PCBs, both saw their on-market prices rise over 4%, once again probing new all-time highs. The Huabao Technology ETF (515000), a domestic pioneer in tracking technology leaders*, closed up 3.92% on the market, attracting a net inflow of 3.45 billion yuan over the past four consecutive trading days.
Hong Kong-listed chip stocks experienced a pattern of early gains followed by a pullback and subsequent recovery. The Huabao Hong Kong Connect Information Technology ETF (159131), the largest and most liquid fund of its kind*, gapped higher at the open to set a new record before retreating and then reversing course, ultimately closing in positive territory. Capital continued to flow in aggressively, with the fund seeing another net subscription of 168 million units for the day.
CPO (Co-Packaged Optics) performed strongly. The high-profile Huabao ChiNext Artificial Intelligence ETF (159363) gained 3.31% on the market, successfully breaking through its previous high. Its single-day turnover reached 14.69 billion yuan, leading all AI-themed ETFs in trading activity, with net inflows exceeding 2 billion yuan over the past two days.
The market "flag-bearer," brokerage stocks, mounted another offensive. Changjiang Securities hit its limit-up for the third time in four days. The Huabao Securities ETF (512000), a top-tier fund with assets over 36.8 billion yuan, saw its on-market price surge over 4% at one point before closing up 3.58%. With A-share turnover consistently above the historically high level of 3 trillion yuan and margin trading balances continuing to set new records, brokerage fundamentals stand to benefit significantly. Coupled with valuations sitting at historical lows, there is considerable room for a valuation recovery.
The military sector showed pockets of activity. Stocks like Hangjin Technology were among four that hit the daily limit-up. The representative Huabao Military ETF (512810) consolidated overall. As a crucial direction for breakthroughs in new quality productive forces, the industry's high growth momentum persists.
The technology sector has remained the undisputed market leader recently. At the same time, with the interim earnings reporting season approaching, sectors with strong earnings expectations, such as brokerages, have also shown strength. Analysis points out that investors should continue to monitor overseas market influences and changes in trading volume, paying attention to the impact of Micron Technology's earnings report on global sentiment towards tech growth stocks. As June concludes, the market faces a window for earnings verification and expectations of liquidity tightening. The market's pricing focus is likely to shift from narratives towards actual earnings delivery, warranting a focus on assets with strong risk resilience, particularly in sub-sectors with high certainty for interim earnings performance.*
Detailed Analysis of Key Sectors
AI Tech Rally Shows No Signs of Slowing
The AI technology rally continues to gain strength, with computing power, storage, and networking all advancing. The storage segment saw a comprehensive surge, with Zhaoji Innovation nearing its limit-up, Demingli hitting its limit-up, and Baiwei Storage soaring over 15%, all reaching new historical highs. The optical module/CPO segment exploded, with Xinyisheng gaining nearly 10% to another record high and Tianfu Communication rising over 5%. Additionally, computing power leader Sugon saw a late-session limit-up.
Among popular ETFs, technology leaders demonstrated their strength. The pioneering Huabao Technology ETF (515000) gained another 3.92% on the market, continuing to set new highs nearly seven years after its listing. It saw heavy volume with a single-day turnover of 500 million yuan, the highest since October 9, 2024, and attracted cumulative net inflows exceeding 3.4 billion yuan over the past four days.
Furthermore, the Huabao ChiNext Artificial Intelligence ETF (159363), which focuses on optical modules, rose 3.31% to successfully break through its previous high, setting another new record. Its single-day turnover was 14.69 billion yuan, leading all AI-themed ETFs in trading activity, with net inflows surpassing 2 billion yuan over the past two days.
On the news front, stellar earnings from a storage leader validated the industry's super-cycle, boosting the global AI computing chain. Micron's earnings beat expectations and it significantly raised its capital expenditure guidance, further confirming the high growth momentum in overseas computing chains. As the core networking component in AI clusters, optical modules will directly benefit from cloud providers' CAPEX expansion. Leading manufacturers like Zhongji Innolight and Xinyisheng have entered the supply chains of major overseas clients, with Q2/Q3 shipments expected to increase sequentially, lending strong certainty to the sector's earnings delivery.
Additionally, Citigroup raised its price target for a leading optical communications company, suggesting the global optical interconnect market could reach $92 billion by 2028, with a three-year compound annual growth rate of 65%. As the market enters the interim earnings verification window, the high growth trend in the AI computing chain, evident from Q2 industry trends, is likely to continue. With the accelerated adoption of 1.6T optical modules and easing upstream material bottlenecks, leading optical module companies may see an acceleration in Q2 earnings release.
Looking ahead for AI tech stocks, analysis indicates that, given strong profit momentum, high participation enthusiasm, and incremental funds from new IPOs, there remains optimism for Chinese AI tech hardware for the remainder of the year. Specifically, while some signs suggest the Chinese AI tech upcycle is gradually approaching a peak, it is still too early to exit the tech sector. Leadership companies in key AI sub-sectors, including optical modules, storage, GPUs, copper-clad laminates, and semiconductor equipment, are viewed favorably.*
For exposure to the tech rally, consider leaders. The Huabao Technology ETF (515000) and its feeder funds (Feeder A: 007873, Feeder C: 007874) select 50 large-cap, high-market-share, growth-oriented, and R&D-intensive listed companies from sectors like electronics, computers, communications, and biotech in the Shanghai and Shenzhen markets, representing the core assets of A-share tech leaders and combining attributes of "hard tech beta" and "excess alpha from quality leaders."
For targeted exposure to optical communications leaders, consider the Huabao ChiNext Artificial Intelligence ETF (159363) and its feeder funds (A类023407, C类023408), which leads its category in size and liquidity. Its underlying index has over 40% concentration in "Zhongji Innolight + Xinyisheng + Tianfu Communication," making it a core flag-bearer for AI computing power. Furthermore, the Huabao ChiNext Artificial Intelligence ETF (159363) has assets of 8.15 billion yuan and an average daily turnover exceeding 900 million yuan over the past six months, ranking first in both size and liquidity within the dual-innovation AI segment.
Massive Inflows for Top Hong Kong Tech ETF
Hong Kong hard tech stocks performed a deep V-shaped reversal intraday. The Huabao Hong Kong Connect Information Technology ETF (159131), the largest and most liquid fund of its kind*, surged over 2% in early trading, dipped into negative territory, and then powered back to close up 0.45% at a new record high of 1.127. It saw subscriptions of 198 million units and net subscriptions of 168 million units for the day, marking the third consecutive session of substantial capital inflows.
Among its constituents, six stocks including Biren Technology, Zhaoji Innovation, Jiufang Zhitou Holdings, and Kingboard Laminates rose over 10%, while Zhipu gained over 8%, Montage Technology rose over 6%, and Lenovo Group increased over 4%.
On the news front, Micron Technology (MU) reported "explosive" earnings for Q3 FY2026. Revenue reached $41.46 billion, up 73.8% quarter-over-quarter and 345.7% year-over-year, far exceeding market expectations. The company also revealed it had signed long-term supply agreements with 16 strategic customers, involving approximately $22 billion in financial commitments, locking in sales for the next three to five years.
The fund manager for the Huabao Hong Kong Connect Information Technology ETF (159131) noted that the core reason for the rise in global memory stock prices since April has been the increase in the proportion of long-term agreement revenue, as this provides earnings visibility for 2027-2028. As a cyclical industry, memory's key driver is a cycle duration that exceeds expectations, with SCA (supply chain agreements) being a core guarantee. The upcoming trading focus may involve the process of SCA coverage increasing from 50% to over 70%, which is a process of valuation expansion. From a quarterly reporting timeline, the next report is around September 25th, after which the market is likely to apply extremely stringent scrutiny to the cyclicality of memory sector companies following their rally. Since memory is the absolute main force in this round of AI computing investment, this timing aligns well with a positive view on the tech sector's rhythm from June to September.
Looking at performance over the past six months, the Hong Kong tech sector has shown a stark internal divergence. The underlying index of the Huabao Hong Kong Connect Information Technology ETF (159131), which focuses on Hong Kong hard tech—the CSI Hong Kong Connect Information Technology Composite Index—has gained 29.8%, outperforming the Hang Seng Tech Index by 48%, the Hong Kong Connect Technology Index by 46%, and the Hong Kong Connect Internet Index by over 65%, demonstrating significant sharpness and elasticity.
Statistical period: Dec 25, 2025 - Jun 25, 2026. The historical annual returns of the Hong Kong Connect Information C Index for 2021-2025 were: -9.54%, -34.47%, -0.25%, 21.58%, 39.30%. Past index performance does not guarantee future results.
For exposure to Hong Kong's scarce "pure-play" hard tech, which supports T+0 trading, consider the Huabao Hong Kong Connect Information Technology ETF (159131), the market's first, largest, and most liquid fund of its kind. Its feeder fund code is 026755. The underlying index is composed of "80% hardware + 20% software," heavily weighted towards Hong Kong's "semiconductors + electronics + computer software," covering 60 Hong Kong-listed hard tech companies. The combined weight of the two wafer fabrication giants, SMIC and Huahong Grace, exceeds 26%, the domestic AI PC leader Lenovo Group has a weight over 10%, and the combined weight of PCB leaders Kingboard Holdings and Kingboard Laminates exceeds 11%—all representing the highest concentrations among all market indices with linked products. Furthermore, the index recently included several high-profile Hong Kong hard tech newcomers like Zhipu and Biren Technology. The index excludes large-cap internet companies like Alibaba, Tencent, and Meituan, offering higher sharpness and better positioning to capture Hong Kong's AI hard tech trends.
Military Sector Seeks Catalysts Amid AI Hardware Wave
The military sector consolidated weakly overall, with significant divergence among individual stocks. The representative Huabao Military ETF (512810) rose over 1% before retreating to close flat, still facing resistance from its annual moving average. Among its holdings, 21 rose, 1 was flat, and 58 fell.
Riding the wave of the AI computing hardware chain, Hangjin Technology, Aerospace Electrical Appliance, and Torch Electron hit their second consecutive limit-up, while Hongyuan Electron hit its limit-up to reach a new three-year high. Zongshen Power touched its limit-up intraday before closing up 7.95%. China Greatwall, Bright Laser Technologies, and Zhenhua Technology all rose over 7%.
Batch declines in aerospace concepts were the main drag, with heavyweight stock Kuang-Chi Technologies falling 2.85%, and Aerospace Electronics, AECC Aviation Power, AVIC Shenyang Aircraft, and China Shipbuilding Industry Group Power collectively dropping over 1.6%.
Focusing on today's limit-up stocks, while the sub-sectors appear dispersed on the surface, the underlying logic is relatively unified: they are tied to the price increase theme in the AI computing hardware chain, coupled with the logic of military import substitution. A direct catalyst was the June 24th announcement of a price hike for wafer fabrication by TSMC, which ignited the industry chain. Concurrently, signals of a super-cycle for MLCC price increases continue to emerge.
Benefiting from its broad thematic coverage, the military sector has seen a frequent emergence of consecutive limit-up stocks since June. As military technology finds civilian applications and civil-military integration progresses, military enterprises in areas like AI connectors, MLCCs, commercial aerospace, controlled nuclear fusion, and gas turbines are poised to find new growth drivers.
Analysis notes that global military spending continues to expand, with China's defense expenditure maintaining steady growth. The 15th Five-Year Plan outlines the overall deployment for the high-quality advancement of China's national defense and military modernization. The development of new-domain and new-quality combat capabilities will accelerate the upgrade of advanced weaponry and equipment, ushering in a new development period for the military equipment industry. In recent years, China's global competitiveness has continued to improve in fields like shipbuilding, aerospace, and satellite navigation. The military industry is a vital direction for breakthroughs in new quality productive forces, with broad industry prospects.*
For investing in the military sector, consider the "八一"-coded Huabao Military ETF (512810) (formerly the National Defense Military ETF), which passively tracks the CSI Military Index, comprehensively covering hot themes like MLCCs, military AI, commercial aerospace, gas turbines, low-altitude economy, and large aircraft. It is also a margin trading and Stock Connect eligible security, serving as an efficient tool for one-click investment in military core assets.
Source: Shanghai & Shenzhen Stock Exchanges, etc., as of June 25, 2026.
Note①: Public data shows the Huabao STAR Chip ETF (589190) has a management fee of 0.3%, a custody fee of 0.08%, and a total expense ratio of 0.38%, which is relatively low among ETFs tracking the same index.
Note②: "Domestic pioneer" refers to being the first ETF to track the CSI Technology Leaders Index.
Note③: "Market's first" means the Huabao Hong Kong Connect Information Technology ETF is the first ETF in the market to track the CSI Hong Kong Connect Information Technology Composite Index. As of June 16, 2026, the Huabao Hong Kong Connect Information Technology ETF had a latest on-market size of 1.337 billion yuan, the largest among the 8 ETFs currently tracking the CSI Hong Kong Connect Information Technology Composite Index; its year-to-date average daily turnover is 565 million yuan.
Note④: Fund fee details are available in respective fund legal documents.
Institutional views referenced from: ① Analysis dated June 22, 2026; ② Analysis dated June 24, 2026; ③ Analysis dated June 22, 2026.
Risk Disclosures: The Huabao ChiNext Artificial Intelligence ETF and its feeder funds passively track the ChiNext Artificial Intelligence Index (Base Date: Dec 28, 2018; Launch Date: July 11, 2024). The Huabao Technology ETF and its feeder funds passively track the CSI Technology Leaders Index (Base Date: June 29, 2012; Launch Date: March 20, 2019). The Huabao Hong Kong Connect Information Technology ETF and its feeder funds passively track the CSI Hong Kong Connect Information Technology Composite Index (Base Date: Nov 14, 2014; Launch Date: June 23, 2017). The Huabao Military ETF passively tracks the CSI Military Index (Base Date: Dec 31, 2004; Launch Date: Dec 26, 2013). Index constituent changes are made per the index methodology; past index performance does not guarantee future results. Stocks mentioned are for objective illustration as index constituents only, not as individual stock recommendations, and do not represent the fund manager's or fund's investment direction. Any information herein is for reference only. Investors are responsible for their own investment decisions. The views, analysis, and forecasts herein do not constitute investment advice. Investors should read fund legal documents to understand risk/return characteristics and choose products matching their risk tolerance. Past fund performance does not guarantee future results. Based on the manager's assessment, the Huabao Technology ETF (515000) and Huabao Military ETF (512810) carry an R3-Medium Risk rating, suitable for Balanced (C3) and above investors. The Huabao ChiNext Artificial Intelligence ETF (159363) and Huabao Hong Kong Connect Information Technology ETF (159131) carry an R4-Medium-High Risk rating, suitable for investors with a C4 or above appropriateness rating. Final appropriateness matching is determined by distributors. Distributors assess fund risks per regulations; investors should refer to the manager's appropriateness opinion. Distributor risk ratings may differ and cannot be lower than the manager's rating. Risk descriptions in fund documents may differ from sales ratings due to different assessment factors. Investors should understand fund risks and make independent, prudent investment decisions. CSRC registration does not indicate assurance of fund value, prospects, or returns. Fund investment involves risks.
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