Losing the 4000 point level! "Two Light" stocks surge against the market, 588330 touches high at 3.42%, "AI Power Generation" continues to outperform! Huabao Fund Hong Kong Internet ETF reaches record lows for the period

On March 20, the Asia-Pacific markets extended their decline. In the afternoon, the A-shares and Hong Kong stocks accelerated their fall. The Shanghai Composite Index closed down 1.24%, falling below 4,000 points for the first time this year, hitting a new low. The Hang Seng Index dropped 0.88%, narrowly holding above the year’s moving average. Expectations of a prolonged geopolitical conflict have intensified, leading to continued low risk appetite and pressure on high-valuation growth assets worldwide.

In the A-share market, technology stocks all declined sharply. The Financial Technology ETF (159851) plummeted 4.37%, hitting a nearly 9-month low, yet saw over 200 million units purchased by bottom-fishing funds. The Huabao Science & Innovation AI ETF (589520), Military Industry ETF (512810), and General Aviation ETF (159231) all reached their lowest levels this year. Cyclical stocks also continued to fall, with the Huabao Nonferrous Metals ETF (159876) and Chemical Industry ETF (516020) experiencing rare eight and seven consecutive days of decline, respectively.

Rumors suggest Tesla plans to spend $2.9 billion on Chinese photovoltaic equipment, boosting the solar sector and renewable energy stocks. The Green Energy ETF (562010) surged nearly 5%. Leading optical module companies remain strong, with continued efforts in AI-related synergy— the “Powering AI” portfolio— including the GEM-listed Huabao High-Optical Innovation ETF (159363), which rose to 3.29% in the morning, and the Huabao Electric Power ETF (159146), which saw three consecutive days of increased trading volume.

Supported by the “Two Lights” (solar + optical modules), the ChiNext Index experienced an independent rally, rising over 3% at one point to a three-year high, closing up 1.3%. The Huabao Innovation & Entrepreneurship Leading ETF (588330), covering high-growth leaders on the ChiNext and STAR Market, reached a peak of 3.42% intraday.

The three major Hong Kong stock indices all declined, with technology stocks leading the decline. The Hang Seng Tech Index fell 2.48% for the fourth consecutive day. Alibaba-W’s latest earnings report fell short of expectations, dropping over 6% after earnings, dragging down tech giants. The Hong Kong Internet ETF (513770), which focuses on core internet tools, hit a new low since the recent correction. The Hong Kong chip sector continued to decline, with the only Hong Kong Information Technology ETF (159131) closing at a new low, though it traded at a premium throughout the day, with over HKD 50 million entering the market yesterday during dips.

The new energy vehicle supply chain remained active against the trend, becoming one of the few bright spots in Hong Kong stocks. China National Heavy Duty Truck, CATL, surged over 8%. The Hong Kong Stock Connect Auto ETF (520780) reached a intraday high of 2.74%, closing up 0.71% with increased volume. Analysts believe that with rising oil prices, the global penetration of new energy vehicles is expected to accelerate, and overseas markets may become a significant growth driver for Chinese independent brands.

【ETF Hot Topics Review】Next, let’s focus on the trading and fundamentals of themes such as the ChiNext, AI on the Growth Enterprise Market, and Hong Kong internet stocks.

1. Tesla’s potential purchase of Chinese PV equipment? Solar + optical modules team up for a comeback! Huabao’s dual innovation ETF (588330) peaked at 3.42%.

All main A-share indices declined, but the ChiNext Index rose 1.3% against the trend. The Huabao Innovation & Entrepreneurship Leading ETF (588330), which tracks large-cap strategic emerging companies on the ChiNext and STAR Market, rose as high as 3.42% intraday, closing up 1.28%. The ETF traded at a significant premium, indicating strong buying interest, with net inflows of 22.67 million yuan over the past five days.

Top holdings include semiconductor leader Zhaoshengwei, which surged over 13%, with net main capital inflow of 3.133 billion yuan, topping the A-share inflow list; optical module leader New Easystar rose over 8%, hitting a new high; solar equipment leader Sungrow Power Supply gained over 5%, with net inflow of 2.619 billion yuan, ranking third in net inflows among A-shares.

On the news front, focus on two more active sectors:

1. Solar: Tesla plans to spend about $2.9 billion on Chinese PV equipment and aims to add 100 GW of PV manufacturing capacity in the U.S. Industry insiders note that due to severe power shortages caused by AI data centers and manufacturing, combined with tariff barriers, the cost of deploying solar energy in the U.S. is artificially high, prompting Tesla to turn to China for procurement. Tianfeng Securities (with rights protection) believes that if policies like “computing power synergy” continue to benefit, and new industries like direct-connected green power accelerate, the infrastructure sector for new energy could see sustained attention.

2. Optical modules: Recent major conferences—OFC and NVIDIA GTC—have clarified technological routes and mass production prospects for optical communications. CITIC Construction Investment predicts that demand for 800G optical modules will continue to grow rapidly through 2026, with significant increases in 1.6T shipments and the start of R&D for 3.2T modules.

Open Source Securities states that under China’s “14th Five-Year Plan,” technological security remains a key theme, promoting self-reliance and forming a “8466” development pattern in key industries. New productive forces are expected to replace the pillar status of real estate, with rapid development in energy (renewables + controlled nuclear fusion), AI, semiconductors, aerospace, low-altitude economy, embodied intelligence, and biomedicine.

【Unstoppable Rotation, One-Click Deployment of China’s Core Tech】

The Huabao Dual Innovation ETF (588330) and its off-market connect fund (A: 013317 / C: 013318) select the top 50 large-cap emerging companies from the STAR Market and ChiNext, covering hot themes like optical modules, semiconductors, and PV equipment. It is also a target for margin trading and interconnectivity, making it an efficient tool for rapid deployment of new productive forces.

2. Optical module leader remains strong! New Easystar soars 8% to a new high! “Mini article” on compute leasing, ChiNext AI ETF pulls back from highs.

The ChiNext AI ETF (159363) declined from its high, with constituent stocks showing mixed performance. CPO optical modules surged, with New Easystar up 8% to a record high; InnoSun and other stocks gained over 6-9%. However, IDC compute leasing stocks suddenly plunged, with Zhaochuang Data hitting a 20% limit down.

Among popular ETFs, Huabao’s ChiNext AI ETF (159363) briefly rose over 3% in the morning, but after the IDC compute leasing stocks collapsed, it retreated slightly, ending the day down 0.37%, with a daily turnover of 871 million yuan. Over the week, the ETF gained two consecutive positive weeks amid the correction.

Why did the compute leasing sector suddenly turn volatile? A small article triggered short-term sentiment swings.

According to Shanghai Securities News, rumors circulated about “some overseas server vendors involved in illegal transactions,” which directly impacted the compute leasing sector. Zhaochuang Data’s stock plunged, hitting a limit down. The company responded quickly via media, stating that the matter was unrelated to them, and all their intelligent compute products are procured through compliant channels, with normal operations.

In the medium to long term, demand for computing power continues to rise. Domestic cloud providers Alibaba and Tencent are raising prices, indicating supply-demand imbalance. The profitability outlook for the compute leasing industry is expected to improve further. Open Source Securities believes that AI application proliferation drives demand for inference, and with NVIDIA’s capacity constraints, rising hardware costs, and domestic substitution gaps, the market is entering a “seller’s market,” with continued price increases.

Regarding optical modules, as NVIDIA GTC officially integrates optical communication into inter-chip connectivity and 1.6T orders exceed expectations, new technologies represented by CPO are entering large-scale commercial validation. CITIC Securities notes that, focusing on the inflation of computing power chains, global demand remains strong, and upstream sectors are likely to see sustained prosperity and price hikes, making computing power the most certain growth theme in the current tech sector.

To seize AI opportunities, investors should consider the ChiNext AI ETF (159363) and its off-market connect funds (A: 017125 / C: 017126), which directly benefit from AI commercialization. About 60% of the portfolio is allocated to compute power (optical module leaders + IDC leaders), and about 40% to AI applications, representing both core “compute” and genuine “AI application” exposure.

3. Alibaba plunges 6%, Huabao Hong Kong Internet ETF hits new lows—can it recover?

All three Hong Kong indices declined, with tech giants suffering heavy losses. Alibaba-W fell over 6% after earnings missed expectations; Tencent dropped nearly 1% after a 6% decline yesterday; Xiaomi-W fell over 8%. The Hong Kong Internet ETF (513770), focused on core internet tools, opened lower and fell 3.74%, reaching a new low since the recent correction.

The reasons for the decline include geopolitical tensions suppressing risk appetite and a shift toward defensive assets, as well as concerns over profit margins due to AI investments by giants like Tencent and Alibaba.

However, outlook remains optimistic. China Merchants Securities states that Hong Kong’s tech sector is now in a high-probability, high-reward strategic zone, with oversold valuations, contrarian buying, and upward fundamental trends forming a “golden window” for deployment.

Galaxy Securities also notes that short-term sentiment may still be volatile, but long-term support remains intact. The tech sector remains a key long-term investment theme, and worries about AI are creating buying opportunities. The rise of China’s AI capabilities is expected to boost market confidence.

Regarding sector opportunities, “Token call volume surges” are pushing cloud product prices higher. Leading internet companies have stronger commercialization potential during the AI cycle. The current PE (TTM) of Hong Kong internet stocks is only 22 times, near a five-year low, well below US and A-share tech valuations, offering a significant margin of safety.

To capitalize on the 2026 AI commercialization year, investors can focus on Hong Kong’s core AI tools via the Hong Kong Internet ETF (513770) and its linked funds (A: 017125 / C: 017126), which track the CSI Hong Kong Stock Connect Internet Index. Top holdings include Alibaba-W, Tencent, Xiaomi-W, Kuaishou-W, Bilibili-W, and other tech giants and AI application companies, with prominent leadership and high liquidity, suitable for T+0 trading.

For those optimistic about Hong Kong tech but seeking lower volatility, the Hong Kong Top 30 ETF (520560) offers a “tech + dividend” balanced strategy, with holdings like Alibaba, Tencent, China Construction Bank, Ping An, combining high-growth tech stocks and stable high-dividend stocks, ideal for long-term Hong Kong stock allocation.

Data sources: China Securities Index Co., Ltd., HKEX, and others. Note: “The only ETF tracking the CSI Hong Kong Stock Connect Information Technology Composite Index” refers to this specific ETF.

*Institutional views sourced from: Tianfeng Securities (March 19, 2024), CITIC Construction Investment (Dec 23, 2025), Open Source Securities (Mar 2, 2024), and others.

Note: ETFs do not charge sales service fees. When subscribing or redeeming, authorized brokers may charge commissions up to 0.5%, including fees from exchanges and registries. Please refer to each fund’s legal documents for detailed fee information.

Risk warning: The Huabao Dual Innovation ETF tracks the CSI Sci-Tech Innovation and Entrepreneurship 50 Index (base date: Dec 31, 2019; release date: June 1, 2021). The ChiNext AI ETF tracks the ChiNext AI Index (base date: Dec 28, 2018; release date: July 11, 2024). The Hong Kong Internet ETF tracks the CSI Hong Kong Stock Connect Internet Index (base date: Dec 30, 2016; release date: Jan 11, 2021). The stocks mentioned are for objective illustration and do not constitute recommendations or guarantees. All information is for reference only; investors are responsible for their own investment decisions. The views, analyses, and forecasts in this article do not constitute investment advice. The company is not responsible for any direct or indirect losses resulting from the use of this content. Investors should carefully read the legal documents of each fund, understand their risk-return profiles, and choose products suitable for their risk tolerance. Past performance does not guarantee future results. The risk levels of the funds mentioned are generally R4 (medium-high risk) for the AI-related ETFs and R3 (medium risk) for others, suitable for active investors.