On Thursday, July 23rd, the A-share market experienced a slight gain with low-volume volatility, with the combined turnover of the two main boards reaching 2.2 trillion yuan, a decrease of 458 billion yuan from the previous trading session. Market hotspots rotated rapidly, with over 4,200 stocks rising across the board and more than a hundred hitting their daily limit-up.
In terms of sector performance, driven by policy catalysts, capital flowed into the new energy sector. The Huabao New Energy Battery ETF (159071), which focuses on the energy storage industry chain, surged nearly 4% during the session, continuing its recovery from lower levels! Pro-cyclical sectors such as metals and chemicals strengthened again. The Huabao Metals ETF (159876) and the Huabao Chemicals ETF (516020) closed up 3.4% and 2.67% respectively, both achieving a bullish three-day winning streak.
The technology sector, however, continued to correct, with semiconductor chips and optical modules weakening. The high-profile Huabao ChiNext Artificial Intelligence ETF (159363) rose before falling back, closing down 1.99%, yet it saw a net subscription of 34 million units for the day. The hard tech direction in Hong Kong stocks continued to attract capital allocation, with the Huabao Hong Kong Connect Information Technology ETF (159131) receiving a net subscription of 56 million units for the day, following a combined inflow of 5.67 billion yuan over the previous four days.
Looking ahead, UBS Securities pointed out that from a medium-term perspective, the positive trend in A-share and technology sector earnings remains unchanged, and policy support for the technology sector is clear. Currently, the total market margin balance has fallen by more than 300 billion yuan from its peak, indicating that the A-share deleveraging process is nearing its end.
Capital Securities believes that with the steady recovery of the domestic economy, the continuous improvement in the profitability of listed companies has fundamental support. The trend towards self-sufficiency and control in hard technology is clear, accompanied by continuous policy support. Major broad-based indices are currently at their lowest valuation levels of the year, making them attractive to long-term capital, and the window for an A-share rebound and recovery is gradually opening.
Key ETF Insights and Closing Commentary
This section focuses on the trading and fundamental conditions of industry themes such as new energy batteries, metals, and ChiNext artificial intelligence.
1. The "15th Five-Year Plan" for Renewable Energy Released, Energy Storage Booms! Huabao New Energy Battery ETF (159071) Soars 3.93%, Sungrow Power Surges Over 7%
The battery industry chain led the gains strongly. The Huabao New Energy Battery ETF (159071), focused on the energy storage chain, saw its intraday price rise throughout the session, surging 3.93% to close at the day's high.
Among its constituent stocks, Mingyang Electric and Jinpan Technology rose over 10%, Deye Holding hit the 10% limit-up, Penghui Energy gained over 9%, Sungrow Power surged over 7%, while GoodWe, Eagle, and Sineng Electric, among others, rose over 6%. Eve Energy increased over 4%.
On the news front, the National Development and Reform Commission and the National Energy Administration issued the "Renewable Energy Development '15th Five-Year Plan'." It proposes that by 2030, the total installed capacity of renewable energy power generation will reach about 3.5 billion kilowatts, with annual power generation reaching about 6 trillion kilowatt-hours. The total installed capacity of wind and solar power will exceed 2.8 billion kilowatts, accounting for over 50% of total capacity, with annual power generation exceeding 4 trillion kilowatt-hours, representing 30% of total power generation.
Soochow Securities research analysis points out that 2026 marks the first year for the implementation of an independent energy storage capacity tariff mechanism, with a national compensation standard of 165–370 yuan/kW·year. The energy storage revenue model consists of spot trading, ancillary services, and capacity compensation. The internal rate of return (IRR) in resource-rich provinces with mature spot markets like Northwest and North China can reach 6–10%. From January to June 2026, the cumulative bidding/awarded capacity for large-scale energy storage EPC in China was 304.8/263.89 GWh, up 193%/+298% year-on-year. Domestic new grid-connected energy storage from January to June was 60.26 GWh (+17% YoY). It is estimated that China's lithium battery energy storage installations will reach 253 GWh in 2026 (+44%). Grid-forming energy storage, large battery cells, and computing-power synergy are future trends and directions, supporting demand growth and industry structure optimization. It is estimated that lithium battery energy storage installations will reach 354 GWh in 2027 (+40%). Major markets like China and the US are entering a new growth cycle for large-scale storage, with Europe and emerging markets showing growth in multiple areas. High growth in global large-scale storage is expected for the next 2-3 years, and high industry chain prosperity may continue.
Focusing on energy storage with high "storage content"! Energy storage facilities address the core contradiction of mismatch between electricity consumption and generation. The surge and instability in computing power electricity demand, coupled with the surge and instability in new energy power generation, make energy storage, which smooths power transmission, the "lifeline" of the era. The underlying index of the Huabao New Energy Battery ETF (159071) – the CNI New Energy Battery Index – has over 80% weight in electrical equipment, covering upstream and downstream industries related to new energy storage batteries. Its top ten holdings include industry leaders such as Contemporary Amperex Technology, Eve Energy, Envicool, and Sungrow Power, with a combined weighting exceeding 60%.
2. Three Consecutive Gains from Low Levels, a Bullish Signal Emerging? Huabao Metals ETF (159876) Tops 4.6% Intraday, Sees Net Inflow of 12 Million Units! Shenzhen Senior and 2 Others Hit Limit-Up
The non-ferrous metals sector rose strongly for the third consecutive day. The Huabao Metals ETF (159876), noted for having the largest scale and best liquidity tracking its underlying index, saw its intraday gain reach as high as 4.61%, closing up 3.4% and achieving a three-day winning streak.
With strong fundamentals and low valuation, the non-ferrous metals sector shows prominent right-side allocation value, attracting active capital deployment. The Huabao Metals ETF (159876) recorded a net inflow of 12 million units for the day.
Among its constituents, Nanshan Aluminum, Shenzhen Senior, and Guocheng Mining hit the daily limit-up. The "lithium mining giants," Ganfeng Lithium and Tianqi Lithium, rose 7.93% and 5.60% respectively. Among heavyweight stocks, Zijin Mining, CMOC Group, and China Northern Rare Earth rose over 2%, while Aluminum Corporation of China gained over 3%.
Why is the non-ferrous metals sector surging? Market analysts point out that with the US June CPI inflation data coming in lower than expected, expectations for Federal Reserve rate hikes have cooled sharply. The shift in macro liquidity expectations from tight to loose provides a systemic tailwind for asset classes highly sensitive to interest rates, such as non-ferrous metals. Simultaneously, mid-year performance forecasts from leading companies like Zijin Mining, CMOC Group, and Aluminum Corporation of China generally exceeded market expectations. The actual verification of profitability, resonating with improved macro liquidity expectations, is driving a rapid sector recovery.
Looking at specific segments, regarding lithium, Goldman Sachs believes that tension in the lithium market will intensify significantly in the fourth quarter of 2026, potentially ushering in a new cycle of prosperity. China Securities Co., Ltd. states that on the supply side, lithium carbonate production is declining, with some lithium salt plants entering scheduled maintenance, leading to a noticeable reduction in spodumene production lines. On the demand side, production schedules for July are expected to continue growing, with material plant operating rates remaining high, projected to increase over 5% month-on-month. August schedules are expected to maintain positive month-on-month growth, indicating a strong off-season, with a promising peak season in the fourth quarter.
Regarding aluminum, BOC International (China) points out that the renewed rise in crude oil prices suggests that the low point for overseas energy prices is gradually being confirmed. As the physical carrier of electrical energy, the price bottom for electrolytic aluminum is also expected to be gradually established. Major electrolytic aluminum enterprises that completed "deleveraging" early this year currently possess relatively high dividend yields.
The Index Research and Investment Department of Huabao Fund notes the strong fundamentals and low valuation of the non-ferrous metals sector, suggesting attention to its right-side allocation value. Overall, the factors that suppressed the sector since March may have largely dissipated. Current stable commodity prices support corporate profits, and leading enterprises still have volume growth contributions, giving the sector high profit certainty. The combination of low valuation and high growth certainty presents a quality allocation window for the non-ferrous metals sector.
Positive Earnings Forecasts and Accumulation at Low Levels, a Technical Rebound is Anticipated!
The underlying index of the Huabao Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) comprehensively covers industries such as copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. Full category coverage allows for better capture of the sector's beta movements. Furthermore, this ETF is a margin trading and securities lending target, serving as an efficient tool for one-click allocation to the non-ferrous metals sector.
As of the end of June, the Huabao Metals ETF (159876) had a latest size of 1.345 billion yuan, with an average daily turnover of 107 million yuan over the past six months. Among the three ETFs tracking the CSI Non-ferrous Metals Index in the entire market, it is the one with the largest scale and best liquidity.
3. In-Depth Review of the Optical Module Sector Adjustment: Historical Divergences Have All Been Proven Wrong! Will This Time Be Different? Giants Heavily Bet on New Computing Power Cycle
AI-related trading continued to adjust, with divergences remaining in the optical module/CPO sector and individual stock performance diverging. Lantech led gains, rising 5.86%, while InnoLight Technology gained over 1%. Eoptolink and TFC Optical Communication continued to decline over 2%.
Among popular ETFs, the Huabao ChiNext Artificial Intelligence ETF (159363), heavily weighted in optical module/CPO leaders, rose before falling back, closing down 1.99% during the session, continuing to fluctuate near its 120-day moving average. It saw a net daily subscription of 34 million units.
The optical module sector has been experiencing sustained volatility recently, with market divergences heating up again. At what stage is the current adjustment? How should the future market be assessed? This section will discuss from two dimensions: historical review and industry outlook.
Historical Perspective: Past Pullbacks Have All Been Disproven by Industry Trends
Guosheng Securities research reviewed four typical pullbacks in the optical communication sector in recent years, with the core insight being that market divergences and panic based on short-term linear extrapolation have ultimately been disproven by the long-term certainty of AI computing power expansion.
Spring 2024: "Copper In, Optics Out" Panic – Copper cables are limited to within cabinets, actually reinforcing the core position of optical modules.
Second Half of 2024: Concerns about Slowing North American Capex – Starting Q2, the year-on-year growth rate of capital expenditures for four major cloud vendors exceeded 50% and continued to rise.
Q1 2025: DeepSeek Impact and Tariff War – Jevons' paradox was validated, where efficiency improvements actually stimulated demand explosion.
Mid-2026 (Current): Storage Price Increases Squeezing Budgets – Underestimating the order visibility and earnings certainty of optical module companies.
Learning from history, Guosheng Securities believes that divergence represents a buying opportunity. The underlying upward logic of the optical communication industry remains unchanged, with the innovation iteration and corporate governance capabilities of leading companies building solid barriers. Short-term logical disturbances will ultimately be digested by long-term earnings realization, and each pullback represents a window for industry positioning. It continues to be optimistic about the mid-year report season for the communications industry, recommending attention to leading optical module companies.
Future Opportunities: Giants Increasing Investments Validate Computing Power Demand
According to reports, OpenAI, Anthropic, Microsoft, SpaceX AI, and Google successively announced AI investment plans within less than two days, with increasing intensity. Google raised its 2026 capital expenditure forecast to $195–205 billion and explicitly stated continued expansion in 2027. OpenAI raised its 2030 computing power spending plan from $600 billion to $750 billion. Anthropic signed a chip agreement with AMD and received a $5 billion investment.
From an industry trend perspective, the "heavy investment" by giants validates the long-term certainty of AI computing power infrastructure expansion, which will directly drive demand for the computing power industry chain, including optical modules, with long-term investment space continuously being revised upward. The continuous heavy investment by giants provides strong industrial demand support for the optical communication sector. Market divergence triggered by short-term pressures may once again constitute a window for positioning in optical modules.
The Huabao ChiNext Artificial Intelligence ETF (159363) and its feeder funds (Class A 023407, Class C 023408) focus on positioning in optical module/CPO leaders. Its underlying index has approximately 40% weight in "InnoLight Technology + Eoptolink + TFC Optical Communication," making it a core flag-bearer for AI computing power. Additionally, the Huabao ChiNext Artificial Intelligence ETF (159363) has a latest size exceeding 7.4 billion yuan, with an average daily turnover over the past six months exceeding 1 billion yuan, leading in both scale and liquidity among the eight ETFs tracking the same underlying index.
Note: Fees are detailed in each fund's legal documents. Source: Shanghai and Shenzhen Stock Exchanges, China Securities Index Co., Ltd., CNI, etc., as of July 23, 2026. Reminder: Recent market volatility may be significant; short-term gains or losses do not predict future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management.
Comments