The chemical sector showed remarkable strength in trading on August 27, with notable gains across petrochemical, lithium battery, and engineering services segments. By market close, Haohua Technology, Dongcai Technology, and Tongkun Group all hit their daily limit-up, while Xinfengming advanced over 8%, with Capchem, Shengquan Group, and Hengyi Petrochemical also posting solid gains. As of August 26, 2026, these companies held respective weightings of 1.48%, 1.99%, 2.29%, 1.18%, 2.37%, 1.66%, and 2.21% within the sub-chemical index tracked by the fund.

On the news front, at a State Council Information Office press conference for the "15th Five-Year Plan" series, a senior official from the Ministry of Industry and Information Technology stated that during the 14th Five-Year Plan period, China's new energy vehicle industry scaled from annual sales of 1.367 million units to 16.49 million units, with its share of total new car sales jumping from 5.4% to 47.9%. The industry ecosystem has become increasingly comprehensive, with China now accounting for over 70% of global production of new energy vehicles, power batteries, and key materials. Analysts suggest that new energy vehicles have achieved unprecedented market acceptance and penetration, with the industry now fully transitioning from policy-driven growth to an endogenous expansion phase powered by market forces and product competitiveness, laying a solid foundation for sustained development across the supply chain.

From a valuation perspective, data through August 26 shows the sub-chemical index tracked by Chemical ETF Huabao (516020) trading at a price-to-book ratio of 2.46 times, positioning it at the 45.4th percentile over the past decade—a relatively reasonable level offering solid medium-to-long-term allocation value. The index delivered annual returns of 41.09% in 2025, -3.83% in 2024, -23.17% in 2023, -26.89% in 2022, and 15.72% in 2021, with corresponding annual volatility of 20.43%, 30.05%, 15.07%, 24.99%, and 32.02% across those five years.

Looking ahead, Guohai Securities points out that on a global scale, China's leading chemical enterprises have established formidable cost and efficiency advantages, with industry champions now entering a phase of long-term upward earnings trajectory. Additionally, for sectors facing supply-side constraints, recovering demand is expected to drive continued improvement in industry prosperity, making these areas worthy of close attention. The brokerage also notes that carbon emission controls and anti-involution measures could trigger a revaluation of China's chemical industry, potentially slowing global and domestic capacity expansion significantly while imposing oversight on high-emission sectors. Given that Chinese chemical companies typically generate robust operating cash flows, curbed expansion could substantially boost free cash flow and elevate potential dividend yields, transforming these firms from capital-intensive operations into cash-generating assets. This supply-side shift is expected to halt the decline in industry prosperity, allowing chemical stocks to offer both high elasticity and attractive dividend yields.

For investors seeking to capitalize on the chemical sector's rebound, the Chemical ETF Huabao (516020) offers an efficient avenue for exposure. This fund tracks the CSI Sub-Chemical Industry Theme Index, with constituent stocks spanning hot themes including AI computing power, anti-involution beneficiaries, robotics, and new energy. Off-market investors can also participate through the Chemical ETF feeder funds (Class A: 012537, Class C: 012538).

Fee disclosure: When subscribing or redeeming fund shares, brokerage agents may charge commissions up to 0.5%, which includes fees levied by securities exchanges and registration institutions. The Chemical ETF Huabao does not charge sales service fees. Institutional views are sourced from Guohai Securities' August 23 weekly report on the basic chemicals industry. Subscription fees for the feeder fund Class A are: 1% for amounts under 1 million yuan, 0.6% for amounts between 1 million and 2 million yuan, and a flat 1,000 yuan per transaction for amounts of 2 million yuan or above. Redemption fees are 1.5% within 7 days, 0.5% from 7 to 180 days, and 0% after 180 days. For Class C shares, redemption fees are 1.5% within 7 days and 0% thereafter, with a sales service fee of 0.2%.

Risk disclosure: The Chemical ETF Huabao passively tracks the CSI Sub-Chemical Industry Theme Index, with a base date of December 31, 2004, and published on April 11, 2012. Index constituent composition adjusts periodically according to index methodology, and backtested historical performance does not guarantee future results. Companies mentioned are solely for objective illustration of index constituents and do not constitute stock recommendations or reflect fund manager investment directions. Any information appearing in this article is for reference only, and investors bear full responsibility for their own investment decisions. Views, analyses, and forecasts herein do not constitute investment advice, and no liability is assumed for losses arising from use of this content. Investors should carefully read fund legal documents including the Fund Contract, Prospectus, and Fund Product Information Summary to understand risk-return characteristics and select products matching their risk tolerance. Past performance does not indicate future results. The Chemical ETF Huabao carries a risk rating of R3-moderate, suitable for investors with balanced (C3) or higher risk profiles. Investors should note that sales institutions' risk assessments may differ from those of the fund manager. Registration with the China Securities Regulatory Commission does not imply endorsement of the fund's investment value or market prospects. Investors should invest cautiously.