A-shares experienced a narrow consolidation on August 6, with the Shanghai Composite Index closing up 0.57% to return to the 3900-point mark, while the Shenzhen Component Index fell 0.24% and the ChiNext Index dropped 0.55%. Total market turnover reached 2.55 trillion yuan, a decrease from the previous trading day. After two consecutive days of strong gains, tech stocks moved toward consolidation, opening lower before rallying and then retreating, with a second rebound in late trading. The tech-focused Huabao Technology ETF (515000), which gathers tech leaders, edged higher at the close. The Huabao Semiconductor Chip ETF (589190), with a lower fee among similar products, and the high-beta Huabao ChiNext AI ETF (159363) both saw volatility exceeding 6%.
Cyclical sectors seized the opportunity, with the chemical sector staging a late-session comeback. The Huabao Chemical ETF (516020) closed up 1.51%, marking its 11th gain in 13 sessions. Non-ferrous metals rose for a third consecutive day, with the Huabao Non-Ferrous Metals ETF (159876), the largest in scale and most liquid among funds tracking the same index, hitting an intraday high of 2.45%. On the news front, a retreat in geopolitical risk premiums, combined with the U.S. "Small Non-Farm" data boosting easing expectations, pushed spot gold above $4,300 per ounce during trading. The real estate sector saw an afternoon surge, with the Huabao Real Estate ETF (159707) climbing from the waterline to rise over 1%. The State Council's approved "Fifteenth Five-Year Plan for Expanding Consumption" includes housing consumption as a category of durable consumer goods, placing it at the top of the list. Some analysts believe this signals a shift in real estate policy toward a dual focus on risk prevention and consumption promotion.
Hong Kong stocks experienced a sudden pullback, with the Hang Seng Index falling 1.49% and the Hang Seng Tech Index dropping 2.28%. Both software and hardware tech sectors declined broadly. The Huabao Hong Kong Internet ETF (513770), which heavily weights internet leaders, closed down 2.81%, while the Huabao Hong Kong Stock Connect Information Technology ETF (159131), focused on Hong Kong hard tech, fell 2.69%, halting a four-day winning streak. The innovative drug supply chain showed relative resilience. The Huabao Hong Kong Stock Connect Healthcare ETF (159137), with over 48% exposure to CXO stocks, and the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), with 100% exposure to innovative drugs, both closed slightly lower. Interim results provided strong support, with CXO leader WuXi AppTec posting a net profit exceeding 10 billion yuan for the first time in a half-year period, and innovative drug leader BeiGene reporting a 627.1% year-on-year increase in net profit, with both companies raising their full-year performance guidance.
Looking ahead, the trajectory of the tech sector is most likely to capture market attention. Sinolink Securities believes that the current adjustment in tech stocks is gradually nearing its end, but the conclusion of the adjustment does not imply a full-scale rebound for AI assets. As valuations digest and risks are released, the AI investment logic has entered the second half, focusing on verifying investment returns. Future market attention will shift from denominator-side liquidity and risk premiums to numerator-side industry trends and profit realization capabilities.
Where to Begin
The following discusses the trading and fundamentals of several key thematic sectors, including non-ferrous metals, fintech, and Hong Kong internet stocks.
U.S. "Small Non-Farm" Boosts Easing Expectations, Spot Gold Surges to $4,300! Huabao Non-Ferrous Metals ETF (159876) Hits Intraday High of 2.45%, Capital Continues to Snap Up Non-Ferrous Metals
After a volatile session of rising, falling, and then climbing again, the Huabao Non-Ferrous Metals ETF (159876), the largest in scale and most liquid among funds tracking the same index, hit an intraday high of 2.45% before closing up 0.92%. From a daily chart perspective, since hitting a year-to-date low of 0.831 on July 20, it may have formed a step-wise upward trend. With strong fundamentals and low valuations, capital is actively positioning for a rebound from oversold levels. The Huabao Non-Ferrous Metals ETF (159876) saw net subscriptions of 15.6 million shares throughout the day, following three consecutive days of absorbing 59.01 million yuan. Over a longer period, it has accumulated 176 million yuan in net inflows over the past 10 trading days.
Among constituent stocks, Yunnan Germanium, a concept stock related to "Indium," hit its daily limit for the third consecutive day. Youyan New Materials, a semiconductor materials concept stock, also hit its limit for the second time. Tungsten leader Xiamen Tungsten rose over 6%, and Zhangyuan Tungsten gained over 4%. Gold leader Western Gold rose 6%, and Shanjin International gained over 5%, leading the gains. On the macro front, the U.S. ADP employment data for July, released on the evening of August 5, showed only 44,000 new jobs added, significantly below the market expectation of 75,000. The notable cooling of the job market eased pressure on the Federal Reserve to raise interest rates further, substantially boosting market expectations for monetary easing. International spot gold broke through the $4,300 per ounce mark during trading, reaching a new stage high since June 18. Gold's bullish momentum is re-accumulating, driven by a triple convergence of technical breakthroughs, central bank purchases, and a shift in macro expectations. CITIC Securities suggests that gold prices may return to an upward channel within the year.
On the industry side, the CEO of overseas optical communications leader Lumentum stated that the supply-demand gap for Indium Phosphide (InP) has now surpassed that of DRAM and NAND, making it one of the most critical constraints for the expansion of optical interconnects in AI data centers. A-share InP concept stock Yunnan Germanium hit its daily limit for the third consecutive day. China Galaxy Securities believes that the strategic position of InP has elevated from an "optical communications substrate" to a "bottleneck link in AI infrastructure."
In terms of valuation, the non-ferrous metals sector currently offers a strong margin of safety. First, in a horizontal comparison across industries, the PE (TTM) of the non-ferrous metals sector in the Shenwan primary industry classification is at a mid-to-low level, with significantly less valuation pressure than most other sectors. Second, from a historical perspective, the PE of the CSI Non-Ferrous Metals Index is near its three-year median, not obviously overpricing future growth expectations. Third, comparing domestic and international markets, using A-share Zijin Mining and U.S.-listed Southern Copper as examples, Zijin Mining's valuation is noticeably lower than Southern Copper's, highlighting a significant global pricing discount for A-share non-ferrous metals leaders. Given the strong fundamentals and low valuations, Huabao Fund's Index Research and Investment Department recommends paying attention to the right-side allocation value of the sector. Overall, the factors that have suppressed the sector's correction since March may have largely been eliminated. Current commodity prices are stabilizing, supporting corporate earnings. Leading companies still have contributions from production growth, providing high certainty for sector earnings. The combination of low valuation and high growth certainty makes the current period a prime allocation window for the non-ferrous metals sector.
Promising Performance and Low-Level Accumulation, a Rebound from Oversold Conditions is Anticipated!
The underlying index of the Huabao Non-Ferrous Metals ETF (159876) and its feeder funds (A-share: 017140, C-share: 017141) comprehensively covers industries such as copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. This full coverage allows for a better grasp of the sector's beta movements. Additionally, this ETF is a margin trading and short selling target, making it an efficient tool for a one-click layout in the non-ferrous metals sector. As of August 5, the Huabao Non-Ferrous Metals ETF (159876) had a scale of 1.642 billion yuan and a year-to-date average daily turnover of 104 million yuan, making it the largest and most liquid ETF among the three tracking the CSI Non-Ferrous Metals Index.
Multiple Stocks Hit Daily Limit! Small-Cap Elasticity, AI Applications and Digital Yuan Catalyze Huabao Fintech ETF (159851) to Nine Consecutive Gains from Lows
The fintech sector continued to be active, stringing together consecutive gains from low levels. Several stocks in the sector hit their daily limits. Feitian诚信 surged 20%, while Cuicui Shares, Beyondsoft, Hengbao Shares, Chutian Dragon, and Hengyin Technology all hit their daily limits. Chuangshi Technology rose over 9%, and 四方精创 gained over 6%. Among popular ETFs, the largest of its kind, the Huabao Fintech ETF (159851), opened lower but trended higher, hitting an intraday gain of nearly 2% before pulling back to close slightly down by 0.15%. However, its daily chart has achieved nine consecutive gains since hitting a nearly 21-month low on July 27.
Based on market information, the recent sustained activity in the fintech sector may be driven by three core catalysts. First, the empowerment of AI applications is accelerating the landing of business scenarios. As the penetration rate of AI large models in scenarios like financial advisory, intelligent risk control, and quantitative trading rapidly increases, the service efficiency and product added value of fintech companies have significantly improved. The application of AI technology is moving from concept to performance realization, becoming a core driver for sector valuation recovery. Second, the expansion of digital yuan scenarios clarifies the industry trend. With the continuous expansion of the digital yuan pilot scope, the accelerated construction of cross-border payment infrastructure, and the introduction of supportive industrial policies by various local governments, fintech companies face new demands for system upgrades, hardware upgrades, and scenario operations, gradually opening up incremental market space. Third, the good share structure of small-cap stocks provides ample room for elasticity. The fintech sector has a high proportion of small and mid-cap targets. After a sufficient prior adjustment, trapped positions have been largely cleared, and the share structure has become more concentrated. In an environment of capital stock game, a light share structure provides good game elasticity for funds, making it easier to trigger rapid rebounds. Guolian Minsheng Securities stated that the continuous improvement in the intelligence capabilities of AI large models is laying the technical foundation for fintech applications. The financial industry's investment in AI is continuously increasing, with the market size expected to reach 57.92 billion yuan by 2030. Investment directions are expanding from single-point products to systematic combinations. The trend of AI empowering transactions and payment sectors is clear, and related industry chains are expected to benefit. With the progress in AI technology, it is recommended to focus on the fintech and AI payment sectors.
From a valuation perspective, as of August 6, 2026, the Fintech Index has still retraced over 35% from its high on August 25, 2025, indicating a relatively sufficient technical adjustment. The index's dynamic PE is 50 times, at the 25th percentile of the past three years, with valuation levels having fallen to historical lows of the past three years. Against the backdrop of a resonance between fundamental repair expectations and high liquidity, the allocation cost-effectiveness of the sector may increase under its high-elasticity attribute. The Huabao Fintech ETF (159851) and its feeder funds (A-share 013477, C-share 013478) heavily weight computer and non-bank financial stocks, covering popular themes like internet brokerages, financial IT, cross-border payments, and AI applications, combining financial cycle and tech growth attributes. As of July 31, the Huabao Fintech ETF (159851) had a fund scale exceeding 6.6 billion yuan, ranking first by a significant margin among the 8 ETFs tracking the same underlying index.
Hong Kong Stocks Suddenly Change Face, Huabao Hong Kong Internet ETF (513770) Falls Nearly 3%. Fund Manager: AI Narrative Shifts to Cloud Vendors, Thematic Investment May Continue
After leading gains in July, Hong Kong stocks suddenly reversed course today, with the three major indices pulling back significantly. Internet leaders, which had been recovering, showed weakness. Alibaba-W, Xiaomi-W, and Tencent Holdings all fell over 2%, with Meituan-W following suit. The Huabao Hong Kong Internet ETF (513770), which heavily weights internet leaders, opened lower and trended lower throughout the day, closing down 2.81% and falling back below the 5-day moving average. The Hong Kong internet sector experienced a strong recovery starting in July, with the underlying index of the Huabao Hong Kong Internet ETF (513770), the CSI Hong Kong Stock Connect Internet Index, surging 18.81% in a single month, leading major global tech indices.
Feng Chencheng, fund manager of the Huabao Hong Kong Internet ETF (513770), pointed out that the rebound may be the result of the combined effect of capital inflows, market style diffusion, and stabilizing fundamentals. First, from a capital flow perspective, southbound capital net inflows in July reached approximately 62.9 billion Hong Kong dollars, a significant increase of about 132% month-on-month compared to June. The internet sector has seen continuous southbound capital inflows since June 29, reversing the outflows of the previous five months, providing important support for the market. Second, from a market style perspective, U.S. stock funds, based on momentum trading and the reduction of leveraged funds, flowed from the crowded AI "winner sector" to the "Magnificent Seven," defensive sectors, and other under-allocated market areas. This style of diffusion trading also spread to other global economies. Third, on the fundamentals front, the reversal of pessimistic expectations for cloud/AI application vendors, combined with the easing of internal competition in food delivery, has led to signs of improvement in the performance of heavyweight internet leaders. The U.S. earnings season changed the AI narrative. The earnings reports from Microsoft and Amazon, released in late July, showed investors the closed loop of AI investment and output by cloud vendors—capital expenditure is being converted into measurable revenue and profit returns, i.e., it can be recouped as verified by the earnings reports. Domestically, benefiting from the sustained release of AI demand, cloud vendors' revenue is expected to continue its quarter-on-quarter acceleration. Alibaba Cloud's profit margin is rising, entering an upward profit cycle. Tencent launched the Hy3.0 large model, returning to the AI large model table, changing the "AI loser" narrative. Meanwhile, Meituan and Alibaba have significantly reduced subsidy intensity quarter by quarter. Losses from instant retail businesses are expected to narrow, with a clear upward trend in short-term profit margins. Easing competition may lead to upward earnings revisions.
Looking ahead, Feng Chencheng believes that the global AI industry is increasingly focused on commercialization. It is becoming more sensitive to the sustainability of capital expenditure ROI, as well as technical competitiveness, AI revenue growth rate, and operating profit margins. The significant breakthrough in the coding capabilities of the domestic Zhipu GLM-5.2 model marks the beginning of the second half of AI's commercialization in China. From June to July, Chinese AI companies intensively released several important models. Chinese developers are approaching, and in some areas surpassing, the American companies long regarded as global AI frontier leaders. The outcome of model open-sourcing and price cuts is the democratization of models, with industry chain profits migrating to cloud vendors that have customers and scale effects. Entering the "profit realization" phase, AI value distribution is shifting towards cloud vendors that "hold computing power and access points" for charging. Thematic investment, driven by short-term risk appetite improvement, may continue. It is worth noting that, as of the end of the second quarter, public fund holdings of Hong Kong stocks have fallen to levels seen before the "924" policy package in 2024. Internet sector holdings have retreated to historical lows. The potential rebalancing from extreme underweighting of Hong Kong stocks may also provide some odds support. Pay attention to the value reassessment of Hong Kong internet leaders amidst the AI transformation.
The Huabao Hong Kong Internet ETF (513770) and its feeder funds (A-share 017125; C-share 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten heavyweight stocks include tech giants like Alibaba-W and Tencent Holdings, as well as various AI application companies, providing significant leadership advantages. It features same-day T+0 trading and good liquidity. For those optimistic about Hong Kong tech but looking to reduce volatility, the first-of-its-kind Huabao Hong Kong Large Cap 30 ETF (520560) is also worth considering. It comes with a built-in "tech + dividend" barbell strategy, with heavyweight stocks including high-elasticity tech stocks like Alibaba and stable, high-dividend stocks like banks and insurance companies, making it an ideal core tool for long-term Hong Kong stock allocation.
Data sources: CSI Index Company, Shenzhen-Hong Kong Stock Exchange, iFind, etc. Public data shows that the Huabao Semiconductor Chip ETF (589190) has a management fee of 0.3% and a custody fee of 0.08%, with a total fee rate of 0.38%, which is relatively low among ETFs tracking the same index.
*Institutional views sourced from: Sinolink Securities macro special report on August 6, 2024, "Is the Tech Adjustment Nearing Its End? How to Allocate in the Next Phase?"; CITIC Securities report on August 5, 2024, "CITIC Securities: $4,000 is Likely the Bottom Range for This Cycle, Gold Prices Expected to Return to Upward Channel Within the Year"; China Galaxy Securities in-depth report on July 12, 2024, "Optical Device Industry: Indium Phosphide: Chain Positioning and Value Reassessment of the 'Invisible Cornerstone' of Optical Interconnects"; Guolian Minsheng Securities event commentary on the computer industry, "Financial and Payment Sectors: Flexible Directions for AI Applications."
Note: ETFs do not charge sales service fees. When investors subscribe or redeem fund shares, the subscription/redemption agent may charge a commission of up to 0.5% of the standard, which includes fees charged by the stock exchange, registration institution, etc. Refer to each fund's legal documents for specific fee rates. Risk Warning: The Huabao Hong Kong Internet ETF and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. The base date of the index is December 30, 2016, and it was published on January 11, 2021. The returns of the CSI Hong Kong Stock Connect Internet Index for the past five complete years are: 2025, 27.02%; 2024, 23.04%; 2023, -24.74%; 2022, -23.01%; 2021, -36.61%. The volatilities for the past five complete years are: 2025, 33.60%; 2024, 43.49%; 2023, 32.09%; 2022, 49.01%; 2021, 38.72%. The composition of index constituents is adjusted periodically according to the index compilation rules. Its back-tested historical performance does not predict future index performance. The stocks mentioned in the text are only objectively listed as index constituents and do not represent any stock recommendation, nor do they represent the fund manager's or fund's investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must be responsible for any investment decisions made independently. Furthermore, any views, analysis, and forecasts in this article do not constitute any form of investment advice to readers. The company is not responsible for any direct or indirect losses arising from the use of the content of this article. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Information Summary," and other fund legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. A fund's past performance does not predict its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. According to the fund manager's assessment, the risk levels of the ChiNext AI ETF, Hong Kong stock ETFs, and the Huabao Semiconductor Chip ETF are all R4-Medium to High Risk, suitable for aggressive (C4) and above investors. The risk levels of the other funds mentioned in the text are R3-Medium Risk, suitable for balanced (C3) and above investors. For suitability matching opinions, please refer to the sales institution. Sales institutions (including the fund manager's direct sales institutions and other sales institutions) conduct risk assessments on the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of each sales institution are not necessarily consistent, and the fund product risk level assessment results issued by fund sales institutions shall not be lower than the risk level assessment results made by the fund manager. The fund's risk-return characteristics and risk level in the fund contract may differ due to different considerations. Investors should understand the fund's risk-return situation and carefully choose fund products and bear their own risks based on their own investment objectives, duration, investment experience, and risk tolerance. The registration of the above funds by the China Securities Regulatory Commission does not indicate a substantive judgment or guarantee of the investment value, market prospects, and returns of the above funds. Fund investment requires caution. MACD golden cross signal formed, these stocks are performing well!
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