Today (December 23), the HUABAO Shanghai Science and Technology Innovation Board Artificial Intelligence ETF (589520), which focuses on China's domestic AI industry chain, saw its intraday price rise by 0.88% in early trading, currently up 0.18%, briefly reclaiming its 10-day moving average. Among its holdings, Cambricon Technologies led with gains exceeding 3%, followed by Amlogic, Tianzhun Technology, and Espressif Systems.
This year, China's AI sector has continued to advance rapidly, particularly after the rise of DeepSeek during the Lunar New Year period, propelling many domestic AI models into an era of "deep thinking." Currently, the combined market capitalization of China's top three AI chip companies—Cambricon, Moore Threads, and MetaX—has surpassed 1 trillion yuan. However, this still pales in comparison to Nvidia's $4.4 trillion (approximately 30 trillion yuan) valuation.
Industry experts note that amid the global restructuring of the AI chip landscape, Chinese firms are accelerating their breakthroughs. The competition between Cambricon, Moore Threads, and MetaX is intensifying, with sustained market and policy support potentially fostering a leader in China's AI chip sector.
Donghai Securities recommends focusing on domestic supply chains: (1) Overseas semiconductor restrictions on China primarily target advanced logic and memory industries, heightening the urgency for upstream supply chain localization. (2) China's self-sufficient enterprises in equipment, components, materials, and EDA hold a relatively small global market share, leaving substantial room for domestic growth. (3) Some Chinese firms have achieved breakthroughs in niche markets, benefiting from accelerated localization and long-term industry expansion.
[The Beacon of Domestic Substitution: Innovation and Self-Reliance] Against the backdrop of technological tensions, information and industrial security have gained prominence. AI, as a core technology, demands self-sufficiency. The HUABAO Shanghai Science and Technology Innovation Board Artificial Intelligence ETF (589520) and its feeder funds (Feeder A: 024560, Feeder C: 024561) emphasize China's AI supply chain with strong domestic substitution characteristics. The top ten holdings account for over 70% of the portfolio, with semiconductors making up more than half, reflecting high concentration and strong growth potential. Additionally, the ETF is margin-trade eligible, offering an efficient tool for investing in domestic computing power.
Risk Disclosure: The HUABAO Shanghai Science and Technology Innovation Board Artificial Intelligence ETF and its feeder funds passively track the SSE STAR Market Artificial Intelligence Index, with a base date of December 30, 2022, and a release date of July 25, 2024. The index rose 12.68% in 2023 and 32.36% in 2024. Constituent stocks are adjusted per index rules, and past performance does not indicate future results. Mentioned stocks and index components are for illustrative purposes only and do not constitute investment advice or reflect fund holdings. The fund manager rates the ETF as R4 (medium-high risk), suitable for aggressive (C4) or higher investors. Investment decisions based on this information are solely the investor's responsibility. No liability is assumed for direct or indirect losses arising from its use. Fund investments carry risks; past performance does not guarantee future results.
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