, the ChiNext Artificial Intelligence ETF Huabao (159363) hit a new low in this round of correction! Fund manager assessment: A recovery window is expected in August-September

On Tuesday (July 28), A-share optical module CPO stocks plummeted across the board. Eoptolink fell over 17%, breaking below its six-month moving average, while Zhongji Innolight dropped more than 15%, and Tfc Optical Communication declined over 13%, retreating to its annual moving average. Among popular ETFs, the GEM Artificial Intelligence ETF Huabao (159363), which holds heavy positions in leading optical module companies, saw a one-sided decline, closing down 9.43% in trading, marking a new low in this correction cycle. Funds added 129 million yuan at low levels in a single day.

Influenced by the recent breakdown and downward trend in US stocks, stock markets in China, Japan, and South Korea generally experienced significant adjustments. Regarding the current market situation, Cao Xuchen, Fund Manager of the GEM Artificial Intelligence ETF Huabao (159363), stated that he still maintains his previous judgment: the computing power sector is expected to see a phased rally between August and September, although the upside potential for overall market indices may be somewhat narrowed. The current market decline is not yet sufficient to warrant a revision of the core judgment.

First, regarding triggering factors, this adjustment was mainly influenced by two pieces of news:

• First, NVIDIA is negotiating to provide financing guarantees of up to $250 billion for OpenAI to support the construction of a 10GW supercomputing center in Ohio, along with a $350 billion chip procurement financing arrangement. This move has sparked market concerns about NVIDIA's debt repayment capabilities;

• Second, the negotiation results between SanDisk and Meta fell short of expectations, exacerbating market worries about industry cyclicality. These factors combined led the storage sector to lead the decline, further dragging down the global technology supply chain.

From a technical perspective, the fifth wave of adjustment for SK Hynix, originally expected to complete on last Monday (as shown by the dashed line in the chart), was delayed due to weak market sentiment. The current stock price has touched the support level of the 120-day half-year moving average. It was previously suggested that if the fifth wave had stopped falling early last week, a gentle adjustment exchanging time for space would have been possible; however, in actual execution, the market chose a weaker path requiring both sufficient time and space for adjustment.

Cao Xuchen stated that he had previously pointed out that the current technology sector is in a transitional phase from bull to bear, which is essentially a process of volatility gradually converging. Given that the market performance from April to June was quite rapid, the adjustment magnitude in July was also significantly large, completing the downward space of the past three months in almost just one month. Based on this, August to September theoretically has the potential to become the quarter window with the most significant recovery; therefore, investors currently holding positions should not speak lightly of withdrawing.

Regarding subsequent key time nodes, they are summarized as follows:

• First, from July 22 to July 30, the four major cloud service providers—Google, Microsoft, Meta, and Amazon—will successively release quarterly reports. Attention should be focused on the impact of capital expenditures on fundamentals;

• Second, on August 7, US July non-farm payrolls and unemployment rate data will be released, which will then affect the pace of interest rate cuts and liquidity expectations;

• Third, on August 26, NVIDIA's earnings report will be disclosed, and its Beta acceleration needs attention.

Regarding the influence of these three events, Cao Xuchen, Fund Manager of the GEM Artificial Intelligence ETF (159363), stated that the first and third events will respectively determine the direction and elasticity of the technology sector, while the second event affects the overall rhythm of the market. He holds a relatively optimistic attitude towards the first and third events; as for the second event, it depends on Trump-related developments. If Trump pushes for a solution to the US-Iran issue ahead of schedule, the technology sector rally might start before August 7; otherwise, it is highly likely to be delayed until after August 7.

Therefore, Cao Xuchen stated that the key timing points for the technology sector are concentrated in the next two weeks. Investors should maintain appropriate calmness and wait for substantive verification from fundamental data. Recent market rumors are mixed, such as good price transmission in the PCB segment driving related individual stocks to surge, or 1.6T optical module prices falling short of expectations causing related individual stocks to plunge. Such information is all short-term noise, and its reference value may be limited. Many behaviors of "looking for reasons by looking at charts" in the current market are essentially manifestations of capital rotation and insufficient liquidity.

In terms of allocation directions, generally speaking, Cao Xuchen believes that the GEM Artificial Intelligence ETF Huabao (159363) focuses on optical modules as the main thread, while the Stock Connect Information Technology ETF Huabao (159131) focuses on FABs (wafer fabs). It is no longer advisable to excessively sell off in the current technology sector. Although rebounds are repeatedly suppressed by bearish candles, trading strategies pursuing extreme low points lack substantial significance at this juncture.

The GEM Artificial Intelligence ETF Huabao (159363) and its off-exchange feeder funds (Class A 023407, Class C 023408) focus on laying out leaders in optical modules CPO. The underlying index composition of “Zhongji Innolight + Eoptolink + Tfc Optical Communication” accounts for approximately 40%, making it a core standard-bearer for AI computing power. Additionally, as of June 30, 2026, the latest scale of the GEM Artificial Intelligence ETF Huabao (159363) exceeded 8.1 billion yuan, with an average daily turnover exceeding 1 billion yuan over the past six months, leading the other 8 ETFs tracking the same underlying index in terms of scale and liquidity.

Rare "pure-blood" hard tech in Hong Kong! Supports T+0 trading! The Stock Connect Information Technology ETF Huabao (159131), the first in the entire market, largest in category scale, and strongest in liquidity, with off-exchange feeder fund code 026755, has an underlying index Stock Connect Info Tech C composed of "85% hardware + 15% software." It holds heavy positions in Hong Kong stocks “semiconductors + electronics + computer software,” covering 60 Hong Kong hard tech companies, excluding large-cap internet enterprises, making it easier to capture the Hong Kong AI hard tech rally.

Data source: Shanghai and Shenzhen Stock Exchanges, etc. "The first in the entire market" refers to the Stock Connect Information Technology ETF Huabao being the first ETF in the entire market to track the CSI HK Stock Connect Information Technology Composite Index. As of June 30, 2026, the latest on-exchange scale of the Stock Connect Information Technology ETF Huabao was 1.979 billion yuan, the largest among the 8 ETFs tracking the same index; year-to-date, the average daily turnover of this ETF was 689 million yuan, the highest among the 8 ETFs tracking the same index.

ETF Fund Related Fee Explanation: When investors subscribe to or redeem fund shares, the subscription and redemption agents may charge a commission of up to 0.5%. On-exchange transaction fees are subject to the actual charges by securities companies, and no sales service fee is charged.

Feeder Fund Related Fee Explanation: The GEM Artificial Intelligence ETF Feeder Fund Class C does not charge a subscription fee; the redemption fee is 1.5% within 7 days and 0% for 7 days (inclusive) and above; the sales service fee is 0.3%. The GEM Artificial Intelligence ETF Feeder Fund Class A subscription fee is 1% for amounts below 1 million yuan, 0.6% for 1 million yuan (inclusive) to 2 million yuan, and 1000 yuan per transaction for 2 million yuan (inclusive) and above; the redemption fee is 1.5% within 7 days and 0% for 7 days (inclusive) and above; no sales service fee is charged.

Huabao CSI HK Stock Connect Information Technology ETF Feeder Fund Subscription Fee: Below 1 million yuan is 0.30%; 1 million yuan (inclusive) - 2 million yuan is 0.20%; 2 million yuan (inclusive) and above is 1000 yuan per transaction. Individual investors: Within 7 days is 1.50%; 7 days (inclusive) and above is 0.00%. Institutional investors: Within 7 days is 1.50%; 7 days (inclusive) - 30 days is 1.00%; 30 days (inclusive) - 180 days is 0.50%; 180 days (inclusive) and above is 0.00%; no sales service fee is charged. ETF subscription and redemption agents may charge a commission of up to 0.5%. On-exchange transaction fees are subject to the actual charges by securities companies.

Risk Warning: The GEM Artificial Intelligence ETF Huabao passively tracks the GEM Artificial Intelligence Index, whose base date is December 28, 2018, and publication date is July 11, 2024. The Stock Connect Information Technology ETF Huabao passively tracks the CSI HK Stock Connect Information Technology Composite Index, whose base date is November 14, 2014, and publication date is June 23, 2017. The composition of index constituents is adjusted in a timely manner according to the compilation rules of the index, and its backtested historical performance does not predict future performance of the index. The index constituents mentioned in the text are for display purposes only, and individual stock descriptions do not constitute any form of investment advice, nor do they represent the holding information and trading trends of any funds managed by the manager. According to the assessment of the fund manager, the risk levels of the GEM Artificial Intelligence ETF Huabao and the Stock Connect Information Technology ETF Huabao are R4-Medium High Risk, suitable for aggressive (C4) and above investors. Please refer to the sales institution for suitability matching opinions. Any information appearing in this document (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must be responsible for any investment decisions made autonomously. In addition, any views, analyses, and predictions in this document do not constitute any form of investment advice to readers, nor do we assume any responsibility for direct or indirect losses caused by the use of the content in this document. Fund investment involves risks. Past performance of funds does not indicate their future performance. The performance of other funds managed by the fund manager does not guarantee the performance of the fund. Fund investment requires caution.