Shanghai Index Hits New Lows This Year! "Power Generation for AI" Shows Strong Resilience Against Decline, Dual Creation Successfully Reverses! Alibaba Plummets After Earnings, Huabao Fund Hong Kong Stock Internet ETF Drops to Freezing Point

On March 20, the Asia-Pacific markets extended their decline. The A-shares and Hong Kong stocks accelerated lower in the afternoon, with the Shanghai Composite Index closing 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%, nearly holding the year’s moving average. Expectations of a prolonged geopolitical conflict fueled risk aversion, which remained subdued globally, putting pressure on high-valuation growth assets.

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

Rumors suggest Tesla plans to spend $2.9 billion on Chinese photovoltaic equipment, boosting the solar sector and renewable energy stocks, with the Green Energy ETF (562010) surging nearly 5%. Leading optical module companies remain strong, with continued efforts in AI computing synergy, exemplified by the “Powering AI” portfolio—Gao “Optical” Growth Startup Board Artificial Intelligence ETF (159363)—which rose to 3.29% in the morning, and the “Full 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 and Technology Leading ETF (588330), covering high-growth leaders on the ChiNext and STAR Market, peaked at 3.42% intraday.

All three major Hong Kong stock indices declined, with technology stocks leading the fall. The Hang Seng Tech Index dropped 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 this round of correction. The Hong Kong chip sector continued to decline, with the sole 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%, and the Hong Kong Stock Connect Auto ETF (520780) reached 2.74% intraday, closing up 0.71% with increased volume. Analysts believe that with rising oil prices, global new energy vehicle penetration is expected to accelerate, and overseas markets may become a key growth driver for Chinese independent brands.

【ETF Hot Topics Review】Next, let’s focus on the trading and fundamentals of themes like 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 ChiNext Leading ETF (588330) peaked at 3.42%.

All main A-share indices declined, but the ChiNext Index rose 1.3% against the trend. The Huabao ChiNext and STAR Market broad-based ETF (588330) saw the highest intraday gain of 3.42%, 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, up 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 among A-share inflows.

Market news highlights two active directions:

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 in the U.S. is artificially high, prompting Tesla to turn to China for procurement. Tianfeng Securities (defending rights) believes that if policies like “computing and power synergy” continue to benefit, and new industry models like direct green power connect accelerate, the infrastructure sector for new energy could see sustained attention.

2. Optical modules: Recent industry conferences, OFC and NVIDIA GTC, provided clear technological roadmaps and production certainty. CITIC Construction Investment predicts that by 2026, demand for 800G optical modules will continue to grow rapidly, with shipments of 1.6T scale increasing significantly, and R&D on 3.2T modules has begun.

Kaiyuan Securities states that under the “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 take over the pillar role of real estate, with rapid development in energy (renewables + controlled nuclear fusion), core industries (AI + semiconductors, aerospace + low-altitude economy, embodied intelligence, biomedicine).

【No fear of rotation, one-click deployment of China’s core tech】

The broad-based ChiNext ETF (588330) and its off-market connect funds (A: 013317 / C: 013318) select the top 50 large-cap strategic emerging companies from the STAR Market and ChiNext, covering hot themes like optical modules, semiconductors, and PV equipment. It is also a “margin trading and interconnection” target, an efficient tool for quick deployment of new productive forces.

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

The ChiNext AI ETF (159363) retreated after a high, with constituent stocks showing mixed performance. CPO optical modules surged, with New Easystar up 8%, hitting a record high; Zhongji Xuchuang rose over 6%; Guangku Technology gained over 9%; Changxin Bochuang, Taichen, and Tianfu Communications rose over 1%. IDC computing power leasing stocks unexpectedly plunged, with Zhaochuang Data hitting the 20% limit down.

Among popular ETFs, Huabao’s ChiNext AI ETF (159363) briefly rose over 3% in the morning, but after the IDC leasing stocks collapsed, it fell slightly by 0.37% in the afternoon, with daily turnover of 871 million yuan. Weekly, it gained two consecutive positive weeks amid the correction.

Why did the computing power 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,” impacting the sector. Zhaochuang Data plunged sharply, hitting the limit down. The company responded quickly via media, stating that the matter was unrelated to them, their intelligent computing products are procured through compliant channels, and operations are normal.

Long-term, demand for computing power continues to rise. Domestic cloud providers Alibaba and Tencent are raising prices, indicating supply-demand imbalance. The industry’s profitability outlook remains optimistic. Kaiyuan Securities believes AI application proliferation drives demand, and with NVIDIA’s capacity constraints, rising hardware costs, and domestic substitution gaps, the market for computing power leasing is entering a “seller’s market,” with continued price increases.

Regarding optical modules, with NVIDIA GTC officially integrating optical communication into inter-chip connectivity and the unexpected fulfillment of 1.6T orders, new technologies represented by CPO are entering large-scale commercial validation. CITIC Securities notes that, focusing on the inflation of the computing chain, upstream sectors are expected to remain prosperous and see continued price hikes, making computing power a top “prosperity and growth” theme in tech.

To seize AI opportunities, consider the ChiNext AI ETF (159363) and its off-market connect funds (A: 017125 / C: 017126), which directly benefit from AI commercialization growth. About 60% of the portfolio is allocated to computing power (optical modules, leading IDC companies), and about 40% to AI applications—covering both core “computing power” and “AI application” sectors.

3. Alibaba’s stock plunges 6%, Huabao Hong Kong Internet ETF hits a new low—can it recover?

Hong Kong stocks declined across the board, with tech giants falling sharply. Alibaba-W dropped over 6% after earnings, missing expectations for Q3 revenue and profit. Tencent Holdings fell nearly 1% after dropping over 6 yesterday. Xiaomi Group-W declined over 8%. The Hong Kong Internet ETF (513770), focused on core internet tools, closed down 3.74%, reaching a new low since this correction began.

The reasons for the decline include geopolitical tensions suppressing risk appetite and a shift toward defensive assets; also, the underperformance of heavyweight stocks Tencent and Alibaba raised concerns about their AI investments squeezing profits.

However, outlooks remain optimistic. Everbright Securities states that Hong Kong’s tech sector is now in a strategic zone with high win rates and high rewards, characterized by “oversold valuation lows + contrarian capital inflows + upward fundamental trends,” making it a rare “golden window” for deployment.

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

Regarding sector opportunities, “surging token call volumes” are pushing cloud product prices higher, and internet giants have stronger commercialization capabilities during the AI cycle. The current PE (TTM) of Hong Kong internet stocks is only 22x, 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, focus on Hong Kong’s core AI tools. The Hong Kong Internet ETF (513770) and its linked funds (A: 017125 / C: 017126) track the CSI Hong Kong Stock Connect Internet Index, with top holdings including Alibaba-W, Tencent, Xiaomi, Kuaishou, Bilibili, and other AI application companies, featuring prominent leaders and high liquidity with 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 with stable high-dividend stocks, ideal for long-term Hong Kong stock allocation.

Data sources: China Securities Index Co., Ltd., Shanghai-Shenzhen-Hong Kong Exchanges, etc. 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), Kaiyuan Securities (March 2, 2024), and others.

Note: ETF sales do not include sales service fees. When subscribing or redeeming, brokers may charge up to 0.5% commission, including related fees from exchanges and registries. See each fund’s legal documents for detailed fee info.

Risk warning: The ChiNext Innovation and Technology Leading ETF (588330) tracks the CSI Sci-Tech Innovation 50 Index, launched on June 1, 2021, with base date December 31, 2019. The Huabao ChiNext AI ETF (159363) tracks the ChiNext AI Index, launched on July 11, 2024, with base date December 28, 2018. The Hong Kong Internet ETF (513770) tracks the CSI Hong Kong Stock Connect Internet Index, launched on January 11, 2021, with base date December 30, 2016. The stocks listed are for objective index representation only, not recommendations or endorsements. All information is for reference; investors are responsible for their own investment decisions. The views expressed do not constitute investment advice. Past performance is not indicative of future results. Fund risks vary; please read the legal documents carefully.