A-share major indices staged a collective comeback on Friday (September 5)! By the close, the Shanghai Composite Index gained 1.24%, the Shenzhen Component Index rose 3.89%, and the ChiNext Index surged 6.55%. The total trading volume of Shanghai and Shenzhen markets reached 2.3047 trillion yuan for the day.

On the sector front, technology growth sectors emerged strongly, with ChiNext and STAR Market boards soaring together. The dual innovation ETF (588330), a broad-based tech index covering high-growth leaders from both boards, saw its intraday price spike 7.15%. The ChiNext AI ETF (159363) rose steadily throughout the day, closing up 6.31% and recovering above the 10-day moving average. The pharmaceutical sector regained momentum, with A-H shares resonating in tandem. Innovative drugs once again led the charge, with the Pharmaceutical ETF (562050) surging 3.36% to a new historical closing high. The HK-Listed Biotech ETF (520880) advanced throughout the day, soaring 4.52% to close at daily highs.

KaiYuan Securities noted that from the perspectives of profit cycles, capital flows, and industry logic, this bull market has long-term supporting factors: (1) Profit and economic cycles are about to bottom out: PPI may see a reversal, with the profit bottom likely to arrive within 2-3 quarters; (2) Capital flow support: Central Huijin has built market confidence, and medium to long-term patient capital has been established; (3) Bottom-up industry logic drives breakthroughs: Technology stocks show relative profit advantages, with frequent positive signals at the industry level.

However, the excessively steep short-term rise slope tends to amplify market volatility. Therefore, traders should not be impatient at the operational level, should maintain composure and a slow bull mentality, with structure being more important - "going slowly leads to faster progress." Looking ahead, the index center is expected to move further upward, and the growth momentum of total market capitalization in both markets is expected to continue.

Regarding specific allocation, CaiTong Strategy indicates that increased capital divergence and reduced market volatility may increase operational difficulty for front-runner hot sectors. Before new catalysts bring positive microstructural liquidity feedback, it's beneficial to dig into "simple problems" in subdivided sectors and moderately pursue "high-low switching" toward sectors with upward momentum trends for smoother net value curves: (1) Leading positioning - anti-involution + supply clearing; (2) Domestic substitution & globalization - AI wave + innovative drug overseas expansion.

**ETF Spotlight Review** Below we focus on the trading and fundamental situations of several industry-themed ETFs including dual innovation leaders, ChiNext AI, and pharmaceuticals.

**1. Advanced Intelligence Ignites, Solid-State Batteries Soar! Dual Innovation ETF (588330) Surges 7%! Tech Strongly Emerges, Why Layout Through Broad-Based Indices?**

Technology growth sectors emerged strongly! ChiNext and STAR Market boards soared together, with the broad-based tech index covering high-growth leaders from both boards - the Dual Innovation ETF (588330) - seeing its intraday price spike 7.15%, with full-day trading volume reaching 102 million yuan, showing active trading!

Looking at specific sectors, power equipment led both markets, with Advanced Intelligent Equipment hitting the 20CM daily limit, Jingsheng Mechanical rising over 18%, and Sungrow Power Supply and EVE Energy gaining over 16%. The three optical module giants also delivered impressive performances, with Eoptolink rising over 11%, INNOLIGHT gaining over 10%, and T&S Communications rising over 7%.

On the news front, the solid-state battery explosion may be related to a response from Advanced Intelligent Equipment. On September 4, Advanced Intelligent Equipment stated on the interactive platform that in the solid-state battery field, the company, as a service provider with complete proprietary intellectual property rights for all-solid-state battery complete line solutions, has successfully connected all process links for all-solid-state battery mass production.

Policy-wise, the "Electronic Information Manufacturing Industry 2025-2026 Stable Growth Action Plan" issued on September 4 proposed achieving high-quality development in photovoltaic and other fields by eliminating "involutionary" competition, and legally governing low-price competition in photovoltaic and other products. It guides orderly local layout of photovoltaic and lithium battery industries and instructs localities to sort out capacity situations.

CICC points out that the development trend of solid-state batteries is clear. As pilot production lines of leading manufacturers gradually land in 2025, mass production line construction will continue to break through in 2026. The solid-state battery industry chain is expected to launch a main trend, with related battery, material, and equipment manufacturers likely to welcome upward slope investment opportunities. Huatai Securities states that improving demand plus "anti-involution" supports prices, optimistic about the lithium battery industry chain achieving both volume and profit growth.

Notably, the Dual Innovation ETF (588330) target index gathers high-growth leaders from STAR Market and ChiNext boards, showing high elasticity characteristics in this round of market activity, leading broad-based indices! The index has cumulatively risen 69.57% since the low point of this round (April 8), significantly outperforming single-board broad-based indices like ChiNext Index (63.69%), ChiNext Composite (54.74%), STAR Market Composite Index (48.29%), and STAR 50 (37.26%).

Data source: Wind, statistical period: 2025.4.8-2025.9.5. Note: The annual gains/losses of the STAR ChiNext 50 Index from 2020-2024 were: 86.90%, 0.37%, -28.32%, -18.83%, 13.63%. Index constituent stocks are adjusted timely according to index compilation rules, and backtested historical performance does not predict future index performance.

Why layout tech markets through broad-based indices?

1. Risk diversification, avoiding "putting all eggs in one basket": Technology industry has numerous subdivisions (such as semiconductors, AI, new energy, innovative drugs, etc.), with fast technological iteration and large individual stock volatility. Broad-based indices buy a basket of constituent stocks, effectively smoothing black swan risks of single tracks or individual stocks.

2. Capturing sector rotation, avoiding "missing out": Internal rotation also exists within tech markets. Broad-based indices cover multiple tech subdivisions, helping investors grasp overall trends during market rotation and avoid missing opportunities due to betting on wrong subdivided tracks.

3. Policy-driven, capturing industry upward beta: Guotai Junan's report points out that this round of technology growth market rise is attributed to policy shifts and expectation changes. Future policy implementation and marginal economic improvement will continue driving this market round, suggesting layout of broad-based indices representing overall tech trends to capture upward industry beta.

**2. Super Comeback! Optical Module Giants Surge, High-"Light" ChiNext AI ETF (159363) Strongly Rebounds Over 6%, Recovering 10-Day Line**

Optical modules and other computing power sectors regained momentum, with ChiNext AI strongly rebounding over 6%, and constituent stocks generally warming up! The three optical module giants rose together, with Eoptolink leading with over 11% gains, INNOLIGHT rising over 10%, and T&S Communications gaining over 7%! Additionally, multiple stocks including KYLAND, Cogobuy, Mango Excellent Media, Linkage Tech, and Guang Ku Technology rose over 7%.

Among popular ETFs, the ChiNext AI ETF (159363), with the largest scale and outstanding liquidity among funds tracking the same index, rose steadily throughout the day, closing up 6.31% and recovering the 10-day line. Weekly cumulative trading volume of 94.8 billion yuan set a new historical high, with average daily trading of approximately 1.9 billion yuan during the week! Funds have continuously leveraged 159363 to increase positions in ChiNext AI recently, with cumulative net purchases of 2.4 billion yuan over the past 20 days!

Looking at weekly performance, ChiNext AI first rose, then fell, then rose again, with amplified weekly volatility and overall slight retreat of 1.27%, marking the first decline after eight consecutive weekly gains. Looking ahead, market analysis points out that dual support from fundamentals and valuation suggests continued attention to computing power industry chains represented by optical modules, with layout potentially focusing on ChiNext AI intervention opportunities.

Fundamentally, ChiNext AI ETF (159363) fund manager Cao Xuchen believes that absent relative deterioration in China-US relations, the AI computing power industry chain remains the most solid fundamental direction and still has medium to long-term investment value. With NVIDIA's GB300 cabinets gradually ramping up in Q4, NVIDIA still has potential for performance upgrades, thereby driving ChiNext AI performance recovery.

Data shows that multiple constituent stocks of the ChiNext AI Index exceeded expectations in interim reports, with 30 stocks achieving positive growth in attributable net profit. Optical module leaders were particularly impressive! Driven by high AI prosperity, global computing power demand exploded, with optical module performance remarkable. Among them, Eoptolink and RUIJIE NETWORKS saw attributable net profit growth rates exceeding 355% and 194% respectively, while INNOLIGHT, T&S Communications, and TAIYING PHOTONICS all achieved double-high growth in revenue and profit.

Chart: Top 20 ChiNext AI Constituent Stocks by Net Profit Growth Rate in 2025 Interim Reports

From a valuation perspective, Guosheng Securities believes that against the backdrop of computing power performance realization, the current optical module market is just the beginning. The industry is experiencing a critical stage from high-speed performance growth to valuation enhancement. Leading companies are at a new stage from "profit realization" to "value reassessment," with stock price drivers shifting from business-driven to dual performance + valuation drivers. Subsequently, under the triple logic of AI closed loop, incremental fund entry, and continuous industry innovation, valuations are expected to continue rising.

Valuation enhancement reason one: AI closed loop formation. At the industry level, whether from applications or computing power industry perspectives, progress speed and industry impact exceed expectations, with the entire AI industry closed loop becoming clearly visible. From the investment side, model training demand drives overseas CSP giants to continuously increase Capex, with computing cluster construction scale continuously exceeding expectations. From profitability perspective, AI is currently at a critical inflection point for profit realization. From application scenarios, AI is accelerating penetration into finance, healthcare, education, and other fields.

Valuation enhancement reason two: Incremental funds prefer high prosperity + high elasticity industries. With continuous entry of subsequent incremental funds, computing power stock leaders will become preferred fund allocation directions. On one hand, computing power sectors will be more favored by funds under this background due to their high prosperity + high certainty + high elasticity characteristics. On the other hand, funds will concentrate toward leading companies emphasizing their irreplaceability. Leading companies with first-mover advantages in reserves, customers, and technology in the optical module industry will be more favored. Over the past two years, the computing power sector remained in existing fund gaming; now we should focus more on incremental fund buying rhythm, with computing power still being the core main line.

Valuation enhancement reason three: Continuous innovation builds leading company barriers. From industry progress perspective, computing power infrastructure upgrades also show relatively obvious trends. Continuous technological iteration upgrades are systematically enhancing computing power sector valuations through multiple paths including raising technical barriers, expanding market space, and reshaping business models. Under the current background of rapid industry technological iteration, technical barriers translate to pricing power, with leading companies that layout early having more advantages, creating a "strong get stronger" dynamic.

To capture AI computing power opportunities centered on optical modules, focus on the market's first ChiNext AI ETF (159363) and off-market connections (A-class 023407, C-class 023408). The target index allocates approximately 70% to computing power and 30% to AI applications, efficiently capturing AI theme markets, with key layout in optical module leaders including Eoptolink, INNOLIGHT, and T&S Communications, with optical module content exceeding 51%. (As of 2025.8.31)

**3. Innovative Drugs Stage Strong Reversal, Multiple Stocks Surge Over 10%! HK-Listed Biotech ETF (520880) Shows MAX Offensive Power, Volume Surges 4.52% to New Closing High**

The pharmaceutical sector regained momentum, with A-H shares resonating in tandem, and innovative drugs once again leading!

A-share innovative drugs staged a strong comeback, with Pharmaceutical ETF (562050) intraday price surging 3.36% to a new historical closing high. Constituent stock Zai Lab-U soared 16.42%, and 3SBio rose 11.8%. The medical sector stabilized, with CXO leading gains. Joinn Laboratories hit the daily limit, and the largest medical ETF in A-shares (512170) rose 2.93% intraday, recovering the 20-day line.

Hong Kong innovative drug gains were even stronger, staging a powerful reversal. The HK-Listed Biotech ETF (520880), featuring both high purity and high elasticity, advanced throughout the day, soaring 4.52% intraday to close at daily highs, setting a new closing high since listing just one day later! Intraday trading was active, with volume trading reaching 713 million yuan.

All 29 innovative drug concept stocks currently covered by HK-Listed Biotech ETF (520880) were in the green, with 3SBio soaring 18.24% to a new historical high, while Coherus BioSciences-B and XtalPi surged 14.53% and 12.18% respectively.

Notably, starting Monday (September 8), the "purification" revision of the Hang Seng Hong Kong Connect Innovative Drug Select Index tracked by HK-Listed Biotech ETF (520880) will officially take effect. The index will then completely exclude CXOs, precisely focusing on innovative drug R&D enterprises, becoming a 100% pure innovative drug index.

Year-to-date, the target index of HK-Listed Biotech ETF (520880) shows MAX offensive power among similar indices. As of September 3, its year-to-date cumulative gain reached 118.95%, leading among innovative drug indices. This index revision, after excluding CXOs and upgrading to a pure innovative drug index, is expected to show stronger sharpness during the innovative drug industry's upward cycle.

The Hang Seng Hong Kong Connect Innovative Drug Select Index has a base date of 2020.12.31 and publication date of 2023.7.17. Annual gains/losses since publication were: 2021, -22.72%; 2022, -16.48%; 2023, -19.76%; 2024, -14.16%. Index constituent stocks are adjusted timely according to index compilation rules, and backtested historical performance does not predict future index performance.

Looking ahead, innovative drug event catalysts are intensive, with sustained market momentum expected. Tomorrow (September 6), the 2025 World Conference on Lung Cancer (WCLC) will open, with multiple innovative drug leaders including CARsgen Therapeutics and BeiGene releasing latest research progress during the conference. Later events include the European Society for Medical Oncology Congress, American Society of Hematology Annual Meeting, and other major conferences.

Founder Securities states that innovative drugs' strong main line attributes remain unchanged, with September potentially being the starting point of a new wave of innovative drug markets, based on several points: First, interim report clearing and re-establishing full-year performance expectations; Second, key academic conferences approaching, with Chinese data potentially continuing to dominate; Third, strong individual stock catalysts, with key data from multiple pharmaceutical companies due in September-October; Fourth, continuous BD achievements, with Q4 expected to see continued realization templates.

According to Shanghai and Shenzhen exchange data, as of 2025.9.4, Medical ETF scale reached 26.325 billion yuan, making it the largest pharmaceutical and medical ETF in the entire market (1/50).

Source: Shanghai and Shenzhen Exchanges, etc., as of 2025.9.5.

Risk Warning: ChiNext AI ETF passively tracks the ChiNext AI Index, with index base date of 2018.12.28 and publication date of 2024.7.11; HK-Listed Biotech ETF passively tracks the Hang Seng Hong Kong Connect Innovative Drug Select Index, with index base date of 2020.12.31 and publication date of 2023.7.17; Dual Innovation ETF and its feeder funds passively track the CSI STAR ChiNext 50 Index, with index base date of 2019.12.31 and publication date of 2021.6.1; Pharmaceutical ETF passively tracks the CSI Pharmaceutical Index, with index base date of 2011.12.30 and publication date of 2013.7.15; Medical ETF and its feeder funds passively track the CSI Healthcare Index, with index base date of 2004.12.31 and publication date of 2014.10.31. Index constituent stocks are adjusted timely according to index compilation rules, and backtested historical performance does not predict future index performance. Individual stocks mentioned in the text are only objective displays of index constituent stocks, not recommendations for any individual stocks, and do not represent fund managers' and fund investment directions. Any information appearing in this text (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, any forms of expression, etc.) is for reference only, and investors must take responsibility for any autonomous investment decisions. Additionally, any views, analyses, and predictions in this text do not constitute investment advice in any form to readers, nor do they bear any responsibility for direct or indirect losses caused by using this text content. Investors should carefully read legal fund documents including Fund Contracts, Prospectuses, and Fund Product Information Summaries, understand funds' risk-return characteristics, and choose products matching their risk tolerance. Funds' past performance does not predict future performance, and performance of other funds managed by fund managers does not guarantee fund performance. According to fund managers' assessments, Medical ETF and Pharmaceutical ETF have R3-Medium Risk ratings suitable for Balanced (C3) and above investors, while ChiNext AI ETF, Medical ETF feeder funds, Dual Innovation ETF, and HK-Listed Biotech ETF have R4-Medium-High Risk ratings suitable for Aggressive (C4) and above investors. Suitability matching opinions should follow sales institutions. Sales institutions (including fund managers' direct sales institutions and other sales institutions) conduct risk assessments on above funds according to relevant laws and regulations. Investors should timely pay attention to suitability opinions issued by fund managers. Suitability opinions from various sales institutions need not be consistent, and fund product risk rating results issued by fund sales institutions shall not be lower than risk rating results made by fund managers. Differences exist between fund risk-return characteristics in fund contracts and fund risk ratings due to different consideration factors. Investors should understand funds' risk-return situations, carefully select fund products based on their investment objectives, terms, investment experience, and risk tolerance, and bear risks independently. CSRC registration of above funds does not indicate substantial judgment or guarantee of investment value, market prospects, and returns. Fund investment requires caution.

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