Policy and industry developments on the STAR Market: Major semiconductor firms including SMIC, Hua Hong Semiconductor, and AMEC have recently announced mergers and acquisitions transactions, employing three distinct integration strategies. Hua Hong Semiconductor plans to issue shares to acquire a 97.5% stake in its "sister company" HLMC. AMEC intends to use a combination of shares and cash to purchase a 64.69% stake in Hangzhou Zhonggui. SMIC has released a draft proposal to acquire the 49% equity it does not already own in its controlling subsidiary, SMIC Northern. (The mentioned stocks are for illustrative purposes only and do not constitute investment advice.) Since the introduction of the "STAR Market Eight Guidelines," companies listed on the board have disclosed nearly 170 equity acquisition deals, with over 100 occurring in 2025 alone, demonstrating significant policy impact. Among these, 50 were major asset restructurings, with 37 taking place in 2025, substantially exceeding the cumulative total of 17 deals from 2019 to 2023. Interpretation: All equity acquisition activities on the STAR Market are centered around industrial consolidation. As leading companies in various sectors successively list, the capital market is becoming the primary channel for mergers and acquisitions. Industry leaders are actively seizing policy opportunities and favorable market conditions to strengthen key segments of their industrial chains through M&A, thereby continuously enhancing the core competitiveness of listed companies. The vitality of the STAR Market's M&A sector is being steadily unleashed, leading to improved efficiency in resource allocation across industrial chains. Amid escalating deglobalization trends, the demand for self-sufficiency and controllable supply chains is urgent. The STAR Market is distinctly characterized by its focus on hard technology, primarily concentrating on sectors such as electronic chips, emerging software and new IT services, biomedicine, and intelligent manufacturing equipment, reflecting the rise of China's advanced manufacturing industry. Hard-tech focused ETFs like the STAR Chip ETF Fund (588290), STAR Information ETF (588260), STAR 50 ETF Index Fund (588280), and Aerospace ETF (159267) warrant long-term attention. STAR Market performance review and fund flows: The STAR Market rebounded over the past week, with sectors including chips, information technology, and new materials all posting gains. Table: Performance of Major STAR Market Indices
Data source: Wind, Huaan Fund, 2026-1-5 to 2026-1-9 At the industry level, the top five sectors on the STAR Market are Electronics, Pharmaceuticals & Biotechnology, Computers, Electrical Equipment, and Machinery Equipment, collectively accounting for 87.4% of the total market capitalization of companies on the board. Regarding ETF fund flows, ETFs tracking STAR Market-related indices experienced a net outflow of 7.57 billion yuan during the week, bringing the total net outflow since the start of the year to 7.57 billion yuan. Views on major STAR Market sectors: Next-Generation Information Technology: The next-generation information technology industry primarily focuses on the electronic chip sector. The chip segment saw a significant rebound last week, reflecting market attention on the autonomous and controllable nature of AI computing infrastructure. Memory chip prices have surged dramatically: Samsung and SK Hynix plan to increase server DRAM prices by 60%-70% in Q1 2026 compared to Q4 2025. AI demand is driving memory chip needs beyond HBM and DDR5 into areas like LPDDR and graphics DRAM. HBM production capacity continues to expand within the memory chip sector, with suppliers planning a nearly 50% increase in 2026, indicating a supply-demand imbalance. Fundamentally, domestic equipment manufacturers reported strong Q3 performance, with overall revenue and net profit showing substantial year-on-year growth. (The mentioned stocks are for illustrative purposes only and do not constitute investment advice.) High-End Equipment Manufacturing: As a crucial component of strategic emerging industries, high-end equipment manufacturing plays a leading role in enhancing the overall competitiveness of China's manufacturing sector. The large-scale equipment renewal policy is expanding: The National Development and Reform Commission and the Ministry of Finance issued a notice regarding the implementation of policies for large-scale equipment updates and consumer goods trade-ins in 2026, extending subsidies for vehicle scrappage/replacement and trade-ins. Overseas demand is recovering: excavator sales from January to November 2025 increased by 16.7% year-on-year (domestic sales up 18.6%, exports up 14.9%), with overseas revenue typically accounting for over 50% and contributing more than 65% to profits for major manufacturers. Humanoid robot mass production is accelerating: the finalization of the Tesla Optimus Gen3 design is driving a surge in demand for core components like joint modules, lead screws, reducers, and dexterous hands. Pharmaceuticals: The pharmaceutical sector performed well overall last week. Currently, the inflection point for domestic demand-driven CRO prosperity has arrived, and the innovation drug industry chain continues its upward trend. Since 2025, benefiting from innovation drug BD out-licensing and stabilized industry financing, domestic CRO orders have shown increases in both volume and price, with new orders accelerating quarter-by-quarter and project volume achieving double-digit growth. OpenAI's launch of ChatGPTHealth, which can integrate electronic medical record data to provide diagnostic assistance, has brought significant attention to AI healthcare. Recent progress in the small nucleic acid field and upcoming industry events like the JPM conference are expected to continue catalyzing sector sentiment. Looking ahead to 2026, industry conferences (e.g., JPM, AACR, ASCO), major BD deals, and technological breakthroughs will provide ongoing momentum for the sector. Introduction to Huaan's STAR Market-related ETFs: STAR Information ETF (588260) Index Introduction: The STAR Information Index (000682) selects 50 securities from STAR Market-listed companies with larger market capitalizations in fields such as next-generation information networks, electronic core components, emerging software and new IT services, internet and cloud computing, big data services, and artificial intelligence to serve as index components, reflecting the overall performance of representative next-generation information technology companies on the STAR Market. Performance of the Top Ten Constituents of the STAR Information Index
Data source: Wind, Huaan Fund, 2026-1-5 to 2026-1-9 STAR 50 ETF Index Fund (588280) Index Introduction: The STAR 50 Index (000688) was officially launched on July 23, 2020, with a base date of December 31, 2019. It consists of 50 securities with large market capitalizations and good liquidity from the Shanghai Stock Exchange's STAR Market, reflecting the overall performance of a representative group of innovative technology companies. Performance of the Top Ten Constituents of the STAR 50 Index
Data source: Wind, Huaan Fund, 2026-1-5 to 2026-1-9 STAR Chip ETF Fund (588290) Index Introduction: The STAR Chip Index (000685) is one of the first sector indices on the STAR Market and serves as an important benchmark for the board. It selects securities from STAR Market-listed companies whose businesses involve semiconductor materials and equipment, chip design, chip manufacturing, and chip packaging and testing as index components, reflecting the overall performance of representative chip industry companies on the STAR Market. Performance of the Top Ten Constituents of the STAR Chip Index
Data source: Wind, Huaan Fund, 2026-1-5 to 2026-1-9 Risk Warning: The above is solely an objective description of the current constituent distribution of the target indices and does not constitute any investment advice or guarantee of investment returns. The index compiler may subsequently adjust the index methodology; the composition and weighting of index constituents may change dynamically. Please be aware of the risks associated with potentially high concentration in certain index constituents with large weights. The aforementioned funds are equity funds, which belong to a category of funds with relatively high risk and high expected returns. They primarily invest in the constituent stocks and alternative constituent stocks of their target indices. Their feeder funds mainly achieve close tracking of the target index's performance by investing in the target ETF. These funds are expected to have higher returns and risks compared to money market funds, bond funds, and hybrid funds, exhibiting risk-return characteristics similar to their target indices. The fund management company does not guarantee that these funds will be profitable, nor does it guarantee a minimum return. The past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund product returns are subject to volatility risks. Investment requires caution. Please read the fund contracts, prospectuses, and other legal documents of the aforementioned funds carefully for details.
Comments