On February 6, A-shares experienced a volatile trading session, opening lower before fluctuating upwards and weakening again towards the close. The three major indices continued their decline, with the Shanghai Composite Index falling 0.25% to close at 4065.58 points and the ChiNext Index dropping 0.73%. Sector performance showed chemicals and new energy leading gains, pharmaceuticals displaying relative resilience, major consumer sectors pulling back, and technology stocks remaining sluggish. Trading sentiment cooled further ahead of the holiday, with full-market turnover reaching 2.16 trillion yuan, marking the sixth consecutive day of declining volume.

The chemical sector opened lower but rallied strongly. The Chemical ETF (516020), with an asset size of 7.4 billion, surged up to 3.45% intraday and closed 2.37% higher. The sector attracted over 19.9 billion yuan in net main fund inflows for the day. Catalysts included international chemical giant BASF's previous announcement of an 11% price increase for TDI products in the Asia-Pacific region.

The non-ferrous metals sector demonstrated notable resilience. The Huabao Non-ferrous Metals ETF (159876) opened down over 4% but recovered to close in positive territory against the market trend, recording an intraday amplitude of 6.4%. Recent heightened volatility in international gold prices has impacted the sector, but Guosheng Securities believes the "non-ferrous metals feast" is not a short-term spike and expects high profitability to be sustained for 3-5 years.

On the decline, liquor stocks saw significant pullbacks. The Huabao Food and Beverage ETF (515710), with high liquor concentration, fell 1.49%, halting a four-day winning streak. Technology stocks continued their downtrend, with the "AI Twin Stars" – the Huabao ChiNext Artificial Intelligence ETF (159363) and the Huabao STAR AI ETF (589520) – both falling for three consecutive days.

The Hong Kong market oscillated at low levels throughout the day, with the Hang Seng Index and Hang Seng Tech Index both closing down over 1%. Major tech internet stocks generally declined. The Hong Kong Internet ETF (513770) fell for a sixth straight day; among its top ten holdings, only Xiaomi closed higher. Bargain-hunting funds were active, with 513770 trading at a premium all day, following a 175 million yuan increase in holdings over the previous four days.

NIO's first-ever quarterly profit boosted the automotive sector. The Huabao Hong Kong Connect Auto ETF (520780) rose over 1%. Hong Kong pharmaceutical stocks also benefited from positive corporate earnings previews, with performances seen in innovative drugs, AI healthcare, and CXO. The Hong Kong Connect Innovative Drug ETF (520880) climbed up to 2% intraday, and the Huabao Hong Kong Connect Healthcare ETF (159137) recorded its fourth consecutive positive close from a low base.

Notably, amidst the Hong Kong market adjustment, southbound capital aggressively "swept up" stocks, with net purchases on February 4, 5, and 6 reaching 13.37 billion HKD, 24.98 billion HKD, and 14.86 billion HKD, respectively. Analysis points out that Hong Kong offers numerous tech stocks comparable or even alternatives to US listings, often at lower valuations, presenting attractiveness. Technology is expected to remain a key theme this year.

[ETF Hotspot Review] The following focuses on the trading and fundamental situations in sectors like chemicals, non-ferrous metals, and Hong Kong Connect pharmaceuticals.

1. Chemical Sector Attracts Nearly 20 Billion Yuan in a Single Day! Lithium Battery, Phosphorus Chemicals Lead Gains Strongly; Chemical ETF (516020) Rises 3.45% Against the Trend! Is the Upcycle Starting? The chemical sector advanced strongly against the market trend. The Chemical ETF (516020), reflecting the overall sector movement, opened lower but quickly rallied, with its intraday price reaching a high of 3.45% before sustaining high-level fluctuations and dipping slightly at the close, ultimately finishing up 2.37%.

Among constituent stocks, shares in lithium battery, phosphorus chemicals, and petrochemicals led the gains. By the close, Enjie Co., Ltd. hit the limit-up, while Hongda Co., Ltd., Zhejiang Longsheng Group Co., Ltd., and Tinci Materials Technology Co., Ltd. rose over 6%. Hengyi Petrochemical Co., Ltd., Rongsheng Petrochemical Co., Ltd., and Huafon Chemical Co., Ltd. also featured among the top gainers.

Fund flows showed the basic chemicals sector attracting substantial capital again. Data indicated that by the close, the sector saw net main fund inflows of 19.918 billion yuan for the day, ranking first among 30 CITIC primary industries.

Regarding sub-sector news, the lithium battery sector recently entered an upward cycle with both volume and price increases, triggering a broad valuation repair rally. This directly boosted demand for lithium batteries and key upstream chemical materials like lithium iron phosphate, lithium hexafluorophosphate, and polyvinylidene fluoride. Analysis suggests policy direction is optimizing supply-side structure, highlighting leading companies' competitive advantages; the chemical industry shows "East rising, West declining," with Chinese firms' global competitiveness strengthening; and slowing capital expenditure节奏 may allow profit elasticity to emerge as capacity is released.

Looking forward, Zhongyuan Securities stated that with continued anti-internal-roll policy advancement and measures including administrative supervision and industry self-discipline, future supply-side constraints are expected to significantly strengthen. Sub-sectors with faster anti-internal-roll progress may benefit first, recommending focus in February on chlor-alkali, pesticides, and polyester filament benefiting from anti-internal-roll, and coal chemicals benefiting from rising oil prices.

Guojin Securities also noted continued optimism for chemical sector investment opportunities, suggesting focus on leading companies and bottom-fishing price increase varieties.

How to capture the chemical sector's rebound opportunities? Utilizing the Chemical ETF (516020) may offer higher efficiency. Public information shows the ETF tracks the CSI Segmented Chemical Industry Theme Index, covering constituents involved in hot themes like AI computing, anti-internal-roll, robotics, and new energy. Off-exchange investors can also access the sector via the Chemical ETF Connect Fund (Class A 012537 / Class C 012538).

2. US-Iran Geopolitical Tensions Escalate, Spot Gold Returns to $4900! Huabao Non-ferrous Metals ETF (159876) Rises Up to 1.5%, Attracting 40.93 Million Yuan Over Two Days Possibly due to escalating US-Iran geopolitical tensions, gold staged a major rebound, with spot gold briefly returning to $4900 per ounce. The sector's popular ETF – the Huabao Non-ferrous Metals ETF (159876) – saw intraday gains peak at 1.53% before closing up 0.18% against the trend, demonstrating resilience.

Capital voted with its feet, showing optimism for the non-ferrous metals sector's outlook! Over 10 billion yuan in main fund inflows entered the sector, with the Huabao Non-ferrous Metals ETF (159876) attracting 40.93 million yuan over the preceding two days.

Among constituents, Hunan Gold Co., Ltd. led gains, rising over 9%. Shengxin Lithium Energy Co., Ltd. climbed over 6%, and Guocheng Mining Co., Ltd. gained over 5%. Among heavyweight stocks, China Northern Rare Earth (Group) High-Tech Co., Ltd. rose over 3%, and Aluminum Corporation of China Limited increased nearly 2%.

News-wise, US-Iran geopolitical tensions escalated. Iran suddenly warned it could easily access US military bases; the US urged its citizens to leave Iran promptly. Additionally, the latest US employment data fell short of expectations, increasing Fed rate cut expectations. These factors likely benefited gold prices, with spot gold rising over 2.5% intraday, briefly reclaiming $4900/oz.

CITIC Futures indicated that short-term, investor expectations for Fed policy have seesawed, and precious metals sell-offs impacted the non-ferrous sector. However, considering pre-holiday downstream stockpiling demand, rapid price declines may stimulate consumption, and supply-demand improvements could potentially stabilize prices. Medium-to-long-term, risks to Fed independence and weak USD expectations persist, alongside overall improving supply-demand expectations. The non-ferrous sector is expected to maintain a震荡偏强 trend, with price movements for base metals like copper, aluminum, tin, and nickel worth watching.

Guosheng Securities believes a resonance of supply-demand mismatch, macro easing, and industrial upgrading means the "non-ferrous metals feast" is not a short-term pulse, and high profitability will last 3-5 years. While the market is bullish on non-ferrous metals' performance, Dongfang Jincheng pointed out short-term risks from speculative profit-taking, potentially increasing volatility. Huatai Securities recommends a medium allocation to the non-ferrous metals sector, suggesting a 10%-20% weighting in one's fund portfolio to share upside potential while diversifying risk.

3. Earnings Boost Hong Kong Pharma Rebound! InnoCare Leads Innovative Drug Gains, 520880 Tests 2% High! AI Healthcare, CXO Active; Huabao Hong Kong Connect Healthcare ETF Rises for Fourth Day from Bottom The Hong Kong pharmaceutical sector warmed broadly. Innovative drugs opened lower but rose, with the Hong Kong Connect Innovative Drug ETF (520880), targeting 100% innovative drug R&D companies, turning positive early and climbing steadily, briefly testing a 2% gain.

Among constituents, InnoCare Pharma surged over 12% intraday, leading significantly. The company expects 2025 revenue of approximately 2.37 billion yuan, a year-on-year increase of about 134%, and anticipates net profit attributable to shareholders of around 630 million yuan, marking its first profit turnaround. Additionally, RemeGen Co., Ltd. and CanSino Biologics Inc. both projected profitability, with forecasted net profit growth exceeding 100%.

The healthcare sector also showed warmth, with several stocks related to AI healthcare and CXO active. Ark Health Co., Ltd. led gains, up 4.71%. Joinn Laboratories (China) Co., Ltd., Tigermed Consulting Co., Ltd., and WuXi AppTec Co., Ltd. rose over 1%. The Huabao Hong Kong Connect Healthcare ETF (159137) recorded its fourth consecutive positive daily close.

Ark Health released an earnings preview, expecting a 2025 profit of 7 to 10 million yuan, turning a year-on-year loss into profit. Furthermore, the company raised approximately 144.3 million HKD net from a placement, mainly to accelerate AI-driven chronic disease management platform development.

Similarly, among the 10 constituents of the Huabao Hong Kong Connect Healthcare ETF (159137) that disclosed earnings previews, 9 projected profitability. Six stocks – Joinn Laboratories (China) Co., Ltd., MicroPort Scientific Corporation, Tigermed Consulting Co., Ltd., WuXi AppTec Co., Ltd., Ark Health Co., Ltd., and Chunli Orthopedics Co., Ltd. –预计净利润同比翻倍增长.

Positive earnings previews from multiple Hong Kong pharmaceutical stocks reflect improving fundamentals, though recent sector performance has temporarily diverged from earnings. From a valuation perspective, the current time may present a good accumulation opportunity. This week, the Hong Kong Connect Innovative Drug ETF (520880) fell for the fourth consecutive week, and the Huabao Hong Kong Connect Healthcare ETF (159137) declined for the third straight week, with their weekly lows hitting record lows since listing.

To埋伏 the Hong Kong pharmaceutical opportunity at low levels, utilizing ETFs may be more efficient, offering high elasticity and T+0 trading.

For innovative drugs, consider the Hong Kong Connect Innovative Drug ETF (520880) and its off-exchange Connect Fund (025221), providing 100% exposure to innovative drug R&D companies, with top ten holdings exceeding 73% weight, highlighting leading attributes.

For healthcare, select the Huabao Hong Kong Connect Healthcare ETF (159137), anchoring medical innovation and encompassing hot concepts like brain-computer interface, AI healthcare, and online pharmacies, while covering leaders across the innovative drug industry chain.