On July 30, A-share markets closed lower across the three major indices, though a notable afternoon rally was followed by a late-session pullback. The Shanghai Composite Index barely held above the 3,800-point mark, while hardware computing stocks continued their decline, dragging the ChiNext Index down nearly 4%. Total two-market turnover reached 2.34 trillion yuan, with over 3,600 stocks declining. Defensive value-oriented sectors maintained their strength, with food and beverage, banking, real estate, and agriculture showing upward recovery.
Kweichow Moutai Co.,Ltd. shares surged over 3%, hitting a nearly two-month high, and surpassed several major tech stocks to reclaim the second-highest market cap position in A-shares. The Huabao Food & Beverage ETF (515710) rose over 2% in market price, extending its winning streak to four consecutive sessions amid a weak market. The banking sector broke out strongly, with the Huabao Banking ETF (512800), which has a market cap exceeding 10 billion yuan, climbing 2.56% to a new year-to-date high. Shares of China Construction Bank and Industrial and Commercial Bank of China both hit all-time highs. Recent sharp volatility in tech stocks has triggered a clear rotation of funds from high-valuation sectors into low-valuation consumer plays. Banking and consumer sectors, where fund holdings by public offerings have fallen to historical lows and fundamentals are stabilizing, have attracted capital flowing back into safe-haven assets.
Low-valuation healthcare stocks showed relative resilience. The Huabao Medical ETF (512170), the largest of its kind in the market, briefly turned positive in early trading, then recovered from afternoon lows to close down just 0.31%, outperforming the broader market. The Huabao Pharma ETF (562050), the only ETF tracking a pharmaceutical index, rebounded from an intraday low of -1.65% to close down 0.72%.
Regarding the persistent correction in hard tech, analysts attribute it to three main triggers: first, extremely crowded positioning; second, an approaching verification window for investment returns, with the market awaiting clear evidence of returns on AI spending; and third, a knock-on effect from leveraged ETFs in South Korea. Looking ahead to tech stocks, CITIC Securities believes that valuations have already declined significantly, but sector fundamentals have not reversed. Some sub-sectors have not yet fully priced in factors like subsequent order growth, price increases, and performance expectations, suggesting strong potential for a rebound from oversold levels.
Capital is actively moving in. The ChiNext AI ETF Huabao (159363), which heavily holds optical module leaders, saw net capital inflows of 134 million fund units today. The Sci-Tech AI ETF Huabao (589520), focusing on domestic AI supply chains, has seen capital inflows for five consecutive trading days.
Banks Return to Center Stage: ICBC and CCB Hit New Highs; Huabao Banking ETF (512800) Surges 2.56% to Break Yearly High
Banks once again acted as a market defender, with all 42 banking stocks closing higher. China Construction Bank rose over 3% intraday, and Industrial and Commercial Bank of China gained over 2%, with both stocks hitting all-time highs. Additionally, Shanghai Pudong Development Bank and Shanghai Rural Commercial Bank rose over 4%, while five stocks including Huaxia Bank, Chongqing Rural Commercial Bank, and Bank of Communications gained over 3%. Eighteen stocks, including Ping An Bank and Agricultural Bank of China, rose over 2%. The Huabao Banking ETF (512800) saw its market price surge 2.56%, reaching a new year-to-date high.
Reviewing the first half of this year, the banking sector continued to weaken, with total market value evaporating nearly 1.5 trillion yuan at one point. However, entering the second half, market style has quietly shifted. With the approach of the interim report disclosure period and the sharp volatility in hard tech, overall market risk appetite has declined, and capital is flowing back towards dividend value and defensive sectors. The CSI Banking Index has accumulated a gain of 13.3% over the interval, outperforming the ChiNext Index by over 38 percentage points (the ChiNext Index fell 25.29% over the same period).
Feng Chencheng, fund manager of the Huabao Banking ETF (512800), pointed out that the sustained strength of banks is likely driven by three converging factors: stabilizing fundamentals, where under the new normal of economic development, policymakers have clarified "improving quality and slowing growth" for credit, also explicitly protecting the net interest margin floor, ensuring ample resilience in full-year industry fundamentals; the dissipation of suppressing factors, as earlier share reduction pressure has largely been released, eliminating sources of sell pressure that had weighed on the banking sector, with passive sell pressure in the secondary market also abating; and a rebalancing of market style, as the current market environment has seen significant marginal changes, creating clear demand for capital rebalancing. Market capital is increasingly focusing on banks' stable earnings and low-valuation safety margin, with overall allocation cost-effectiveness continuing to improve.
Notably, across all industries, the correlation between banking and technology is at the relatively lowest end. Over the past 1, 3, and 5 years, the correlation coefficient between the daily return of the banking index (Shenwan Primary) and the Wind Technology Broad Index (888012.WI) was only -0.26, 0.08, and 0.20 (as of July 16, 2026), making it an important direction for balanced allocation in the current market environment. Additionally, data from CICC shows that the fund position in banking stocks was 1.26% in the second quarter of 2026, a record low. Compared to the benchmark index, the banking sector as a whole was underweighted by 8 percentage points by funds. The potential for subsequent increases in allocation during the style rebalancing is worth watching. Orient Securities stated that since the third quarter, against the backdrop of rebalancing in market risk appetite and capital style, a window for market style rebalancing has opened. With stable fundamental expectations for the banking sector in interim reports, representing a definite improvement over the past three years, coupled with high-dividend defensive characteristics, the sector is expected to maintain its current valuation recovery trend.
Gaining momentum, balancing offense and defense! The Huabao Banking ETF (512800) and its linked funds (Class A: 240019; Class C: 006697) passively track the CSI Banking Index, with constituent stocks covering all 42 A-share listed banks, serving as an efficient investment tool to track the overall performance of the banking sector. The Huabao Banking ETF (512800) has a fund size exceeding 10 billion yuan, with an average daily turnover of over 700 million yuan since 2025, making it the largest and most liquid among the 10 banking ETFs in A-shares.
Low-Valuation Healthcare Shows Resilience; Consumer Healthcare Strengthens; Chinese Medicine Stocks Rise Collectively; Medical ETF (512170) Outperforms Market; Only Pharma ETF Holds Semi-Annual Line
Low-valuation healthcare showed localized activity, demonstrating resilience. The medical sector was mixed, with medical device leaders Mindray Medical and United Imaging Healthcare rising 4.35% and 2.21%, respectively. Consumer healthcare directions like medical aesthetics and ophthalmology generally rose, with Imeik Technology up 3.3% and Aier Eye Hospital up 2.37%. Following a "hawkish" stance from the Fed overnight, CXO leaders collectively turned lower, with WuXi AppTec down 0.81% and Asymchem falling nearly 6%. The Huabao Medical ETF (512170), the largest of its kind by scale, briefly turned positive in early trading, then recovered from afternoon lows to close down just 0.31%, outperforming the market, with a full-day turnover of 523 million yuan and an amplitude of 2.45%.
The pharmaceutical sector was also mixed, with consumer-oriented Chinese medicine stocks rising against the trend. Dong'e Ejiao led with a 2.68% gain, while Yunnan Baiyao, Zhangzhou Pientzehuang, Beijing Tongrentang, and others rose over 1%. Interest rate-sensitive innovative drug assets underwent batch adjustments, with Zelgen Biopharma leading losses down 10.57%, RemeGen down 5.78%, and BeiGene down 3.38%. The Huabao Pharma ETF (562050), the only ETF tracking a pharmaceutical index in the market, rose and then fell in early trading, recovering from an intraday low of -1.65% in the afternoon to close down 0.72%, with an amplitude of 2.57%.
From a daily K-line perspective, the Huabao Pharma ETF (562050) successfully held its semi-annual line today, while the Huabao Medical ETF (512170) closed with a doji star, having lost and then regained the semi-annual line. Going forward, if these two ETFs can firmly hold the semi-annual line, the current recovery trend could potentially advance further. With tech stocks still in a volatile phase, the demand for capital rotation from high to low valuations is strong, making low-valuation healthcare attractive. Zhang Fang, fund manager of the Huabao Pharma ETF (562050) and Huabao Medical ETF (512170), previously noted that after an extended and substantial decline, the overall valuation of healthcare is at historically low levels, offering high investment cost-effectiveness. Therefore, it is more likely to attract capital attention during market style rebalancing. Policy support is also increasing. Recently, the State Council released the "Fifteenth Five-Year Plan for Expanding Consumption." Analysis points out that the plan defines consumption as a core long-term strategy rather than a short-term growth stabilization tool. Under the guidance of the rising share of service-oriented consumption, the medical services sector and the Chinese medicine sector with stronger consumer attributes are worth watching.
To seize healthcare recovery opportunities, two key investment tools are worth noting: The Huabao Medical ETF (512170): the largest medical and healthcare ETF in the market by scale, focusing on medical equipment (including brain-computer interfaces) + medical services (CXO + medical aesthetics + private hospitals), also incorporating AI medical concepts. OTC linked fund: 012323. The Huabao Pharma ETF (562050): the only ETF tracking a pharmaceutical index in the market, featuring a proprietary "72% innovative drugs + 22% Chinese medicine" ratio, combining the high growth potential of innovative drugs with the high dividends of Chinese medicine. OTC linked fund: 024986. Note: As of June 30, 2026, the Huabao Medical ETF (512170) has a scale of 25.623 billion yuan, ranking first among all medical and healthcare ETFs in the market.
What is Capital Buying? Kimi K3 Open Source Storm Sweeps Globally; Huabao Sci-Tech AI ETF (589520) Attracts 29.28 Million Yuan Over Five Consecutive Days
The market is consolidating, with all three major A-share indices closing in the red, and the ChiNext Index falling nearly 4%. The Huabao Sci-Tech AI ETF (589520), which focuses on the domestic AI supply chain, followed the market correction, with its market price down 5.36%. This ETF has been declining continuously since July, and its current price is just one step away from its year-to-date low (0.550), potentially falling back into a cost-effective zone. Undeterred by market volatility, capital is moving in against the trend! Data shows that this ETF has attracted capital inflows for five consecutive trading days, totaling 29.28 million yuan. Extending the timeframe, over the past 20 trading days, it has accumulated a massive influx of 65.82 million yuan.
Among constituent stocks, Shanghai Hehe Information Technology led gains, rising over 5%, while Kingsoft Office and Roborock rose over 2%. Newland Software and ArcSoft closed higher, but the remaining 25 stocks all declined. Intellifusion and VeriSilicon fell over 11%, and Cambricon Technologies dropped over 9%, leading the losses and dragging down the index. Why is capital adding positions on dips in the domestic AI supply chain? The investment logic can be understood from both policy and industrial perspectives.
From a policy perspective, on July 30, a top-level policy meeting set the tone, urging solid progress in the planning and construction of the "six networks" and deeply implementing the "AI+" action. Western Securities pointed out that computing power has been positioned by the top level as a national strategic resource alongside water and electricity. The Ministry of Industry and Information Technology has included AI chips in the security and reliability certification system. Nine domestic high-end AI chips, including those from Haiguang Information and Moore Threads, have completed the highest-level certification, which is expected to further open up the market space for domestic chips in government and key sectors. Policy dividends for domestic substitution continue to be released, and the long-term growth space for computing power domestic substitution is vast.
From an industrial perspective, on July 27, the full model weights of Kimi K3 were officially released for open source. This model has a total parameter count of 2.8 trillion, making it the world's first open-source model at the 3 trillion parameter level. According to the latest ranking by ArtificialAnalysis, Kimi K3's intelligence level ranks fourth globally, leading all open-source models. More importantly, Kimi K3 did not take a low-cost route; its price is currently the highest among domestic large models, even forcing leading global model makers to adjust their strategies. In the view of industry insiders, this is an important signal, indicating that domestic large models are transitioning from cost-effective substitutes to technology peers, gaining greater market pricing power. Nvidia founder and CEO Jensen Huang stated outright that "Chinese models are very impressive," suggesting the market underestimates the impact of the open-source Kimi model, just as it previously underestimated DeepSeek. Previously, the industry generally believed Chinese models lagged behind leading foreign models by 6-9 months, but after the K3 release, Ian Stock, a computer science professor at UC Berkeley, believes this gap has narrowed to 2-3 months. China Merchants Securities noted that the domestic AI supply chain is currently undergoing a correction due to overseas liquidity disturbances, but the long-term industry logic of domestic substitution remains intact. With the concentrated release of interim results and the commencement of various local computing power network projects, there is ample room for valuation recovery in the domestic computing power sector. From a medium to long-term perspective, one could consider laying out the autonomous and controllable computing power supply chain on dips.
Embracing domestic substitution and technological self-reliance. The Huabao Sci-Tech AI ETF (589520) and its linked funds (Link A: 024560, Link C: 024561) focus on the domestic AI supply chain, with constituent stocks including 30 large-cap Sci-Tech Board listed companies that provide basic resources (e.g., Cambricon, Haiguang Information), technology (e.g., UCloud, Transwarp), and application support (e.g., Ezviz, Kingsoft Office) for AI. The semiconductor industry accounts for 70.4% of the weight, offering strong offensive characteristics. GPU concept stocks and AI application concept stocks account for 41.98% and 23.19% of the weight, respectively. With a 20% price limit, the ETF provides a low-barrier way to access the breakthrough forces in the Sci-Tech sector. Additionally, this ETF is a margin trading and short selling target, serving as an efficient tool for a one-stop allocation to domestic computing power.
Source: Shanghai and Shenzhen Stock Exchanges, etc., as of July 30, 2026. Note: Fund rates are detailed in respective fund legal documents. Institutional views referenced from: ① CITIC Securities July 23, 2026, "Optimistic about investment opportunities in the electronic sector after oversold conditions"; ② Orient Securities July 26, 2026, "Stable fundamental expectations for bank interim reports, fund holdings have fallen to historical lows"; ③ Western Securities July 15, 2026, "AI cycle rising, bullish on domestic computing power opportunities"; ④ China Merchants Securities July 24, 2026, "Two main lines for interim report layout: performance improvement + high-prosperity industries."
Risk Warning: Huabao Banking ETF and its linked funds passively track the CSI Banking Index, which was established on December 31, 2004, and published on July 15, 2013. Annual returns for the CSI Banking Index from 2021-2025 were: 6.79%, 34.71%, -7.27%, -8.78%, -4.41%; annual volatility for the same period was: 14.03%, 19.34%, 13.41%, 18.56%, 18.63%. The Huabao Medical ETF and its linked funds passively track the CSI Medical Index, established on December 31, 2004, and published on October 31, 2014. The Huabao Pharma ETF and its linked funds passively track the CSI Pharmaceutical Index, established on December 30, 2011, and published on July 15, 2013. The Huabao Sci-Tech AI ETF and its linked funds passively track the SSE Sci-Tech Board AI Index, established on December 30, 2022, and published on July 25, 2024. The composition of index constituent stocks is adjusted periodically according to the index compilation rules. Their back-tested historical performance does not indicate future index performance. The stocks mentioned in the text are only objective examples of index constituents and do not constitute any stock recommendation, nor do they represent the fund manager's or fund's investment direction. Any information appearing in this text (including but not limited to stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must be responsible for any investment decisions they make independently. Furthermore, any views, analysis, or forecasts in this text do not constitute investment advice to readers of any form. The company assumes no responsibility for any direct or indirect losses resulting from the use of the content herein. 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 select products suitable for their own risk tolerance. Past performance of a fund does not indicate 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 level for the Huabao Banking ETF (512800), Huabao Medical ETF (512170), and Huabao Pharma ETF (562050) is R3-Medium Risk, suitable for Balanced (C3) and above investors. The risk level for the Huabao Medical ETF linked funds and the Huabao Sci-Tech AI ETF (589520) is R4-Medium to High Risk, suitable for investors with suitability rating C4 and above. Suitability matching opinions shall be based on sales institutions. 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 opinions on suitability from various sales institutions are not necessarily consistent, and the fund product risk level rating results issued by fund sales institutions shall not be lower than the risk level rating results issued by the fund manager. The fund's risk-return characteristics and risk level in the fund contract may differ due to different factors considered. Investors should understand the fund's risk-return situation, carefully choose fund products based on their own investment objectives, horizon, experience, and risk tolerance, and bear the risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that it has made a substantive judgment or guarantee regarding the investment value, market prospects, or returns of the funds. Fund investment requires caution. MACD golden cross signal forms; these stocks are showing strong gains!
Comments