On July 16th, the optical module and Co-Packaged Optics (CPO) sector continued its correction, with Tianfu Communication, Xinyisheng, and Zhongji Xunchuang all falling over 3%. The ChiNext Artificial Intelligence ETF (159363), which holds significant positions in leading optical module companies, saw its on-market price continue to fluctuate and decline by 2%, with funds rapidly pouring in for 144 million units in the afternoon. Over the previous five trading days, it had already accumulated a net inflow of approximately 530 million units.
Key Rationale Behind the Sector
A recent report from Guosheng Securities pointed out that due to market concerns over a peak in AI infrastructure investment and potential computing power oversupply, hardware sectors like optical modules have experienced a certain degree of pullback. However, looking beyond short-term sentiment, the underlying industrial fundamentals are showing more positive and profound resonance. The current period is seen as a crucial window for positioning in leading optical communication companies, with a significant buying opportunity for optical modules approaching.
Capital Expenditure as a Driver
Computing power remains in a state of sustained shortage, with the evolution of large language models pushing demand growth steeper. Future capital expenditure guidance from major North American Cloud Service Providers (CSPs) is expected to continue trending upward. The ongoing expansion of the overall investment pie provides a solid foundation for the high prosperity of the optical communication sector.
Pricing Dynamics as a Driver
Against the backdrop of continuous technological evolution in computing power, the growth logic of optical components is being re-evaluated by the market. The rationale for price increases in optical communication is more straightforward, primarily benefiting from product iteration and technological paradigm upgrades. More importantly, the core characteristic of optical module price increases is "rising unit prices alongside declining unit costs."
Earnings Realization as a Driver
Within the AI computing power industry chain, leading optical module companies represent one of the few segments capable of clearly delivering high-growth earnings in the short to medium term. With its highly certain earnings performance, the stock prices of optical communication leaders have more stable support and are expected to act as a "pillar" leading the stabilization and rebound of the broader technology sector.
Focus on the Leading ETF
The ChiNext Artificial Intelligence ETF (159363) and its off-exchange feeder funds focus on leading CPO optical module companies. The underlying index has a combined weighting of approximately 40% in Zhongji Xunchuang, Xinyisheng, and Tianfu Communication, positioning it as a core representative of AI computing power. Furthermore, the ChiNext Artificial Intelligence ETF (159363) has a latest fund size exceeding 8 billion yuan, with an average daily turnover over the past six months surpassing 1 billion yuan, leading its peer group of eight ETFs tracking the same index in terms of size and liquidity.
Important Fund Information
Investors should note that subscription and redemption agents may charge a commission of up to 0.5% when subscribing for or redeeming fund units. On-market trading fees are subject to the actual rates charged by securities firms, with no sales service fee charged.
For the feeder funds, the Class C shares of the ChiNext AI ETF do not charge a subscription fee. A redemption fee of 1.5% applies for holdings under 7 days, and 0% for 7 days or more. The sales service fee is 0.3%. For the Class A shares, the subscription fee is 1% for investments below 1 million yuan, 0.6% for 1-2 million yuan, and a flat 1000 yuan per transaction for 2 million yuan or more. The redemption fee structure is the same as Class C shares, and no sales service fee is charged.
Risk Disclosure
The ChiNext Artificial Intelligence ETF passively tracks the ChiNext Artificial Intelligence Index. The index's base date is December 28, 2018, and its release date was July 11, 2024. The index's constituent stocks are adjusted according to its compilation rules, and its back-tested historical performance does not indicate future results. The mention of index constituents is for illustrative purposes only and does not constitute investment advice or represent the holdings or trading动向 of any fund managed by the asset manager. Based on the fund manager's assessment, the ChiNext Artificial Intelligence ETF carries a risk rating of R4 (Medium-High Risk) and is suitable for Aggressive (C4) or higher risk profile investors. Suitability matching opinions should be based on sales institutions. Any information appearing herein is for reference only, and investors are responsible for their own investment decisions. The views, analysis, and forecasts herein do not constitute investment advice of any kind to readers, and no liability is accepted for any direct or indirect losses arising from the use of this content. Fund investment carries risks. Past performance of a fund is not indicative of its future results. The performance of other funds managed by the same manager does not guarantee the performance of this fund. Invest with caution.
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