On Tuesday, February 10, A-shares experienced narrow fluctuations, while the STAR Market stood out with strong performance. ByteDance's Seedance2.2 model gained widespread popularity, driving activity across AI applications and computing chip sectors. The Huabao STAR Market Artificial Intelligence ETF (589520) surged nearly 2% during the session, and the Huabao STAR Market Chip ETF (589190) continued its rebound, rising over 1%.
In Hong Kong markets, pharmaceutical and healthcare sectors staged a strong recovery. The Hong Kong Stock Connect Innovative Drug ETF (520880), which focuses purely on innovative drugs, climbed 3.86% during trading and closed up 2.9%, reclaiming its 20-day moving average on heavy volume of 590 million yuan. The Huabao Hong Kong Stock Connect Healthcare ETF (159137), with significant exposure to CXO companies, advanced 2.1%, marking six consecutive days of gains.
Regarding strategic allocation, Guosen Securities indicated that historically, bull market spring rallies have often seen index gains of around 20%. Since the current rally began in December last year, the maximum increase has been less than 10%, suggesting potential for further upside. Holding stocks during the holiday period may be a relatively optimal strategy for the short term.
Dongwu Securities explicitly stated that the week before the holiday is the best window for index positioning, with a rebound inflection point typically occurring about five days prior. Historical data reviews show that large-cap stocks usually outperform small-caps before the Spring Festival, while micro and small caps tend to take the lead after the holiday.
This ETF review focuses on the trading and fundamental aspects of sector-specific ETFs like the Hong Kong Stock Connect Innovative Drug ETF, the STAR Market Artificial Intelligence ETF, and the STAR Market Chip ETF.
I. Dual Breakthroughs in BD Overseas Expansion and Earnings Realization Drive Hong Kong Innovative Drug ETF's Rally; Has the Inflection Point Arrived? The Hong Kong pharmaceutical sector continues to break through. Led by Innovent Biologics, the innovative drug industry chain maintained its strength. The Hong Kong Stock Connect Innovative Drug ETF (520880), with 100% focus on innovative drugs, hit a high of 3.86%, closing up 2.9% and reclaiming the 20-day moving average on heavy volume of 590 million yuan. The Huabao Hong Kong Stock Connect Healthcare ETF (159137), with high CXO exposure, rose 2.1%, achieving six straight days of gains.
The accelerated recovery in Hong Kong's innovative drug sector is likely driven by two core factors: accelerated BD overseas expansion and commercialization realization. 1. Overseas expansion of Chinese innovative drugs remains highly active. Since 2026, the trend of innovative drug出海 has continued the momentum from 2025, with significant BD deals being finalized. On February 8, Innovent Biologics announced its seventh global strategic collaboration with Eli Lilly, with a potential total deal value of up to $8.85 billion, including a $350 million upfront payment. In January, CSPC Pharmaceutical Group entered a platform-level collaboration with AstraZeneca valued up to $18.5 billion, and RemeGen Co. signed a $5.6 billion licensing agreement with AbbVie, highlighting the global competitiveness of Chinese innovative drugs. 2. Chinese innovative drugs are entering a commercialization harvest period. In 2025, over 70% of innovative drug companies achieved positive revenue growth, with BeiGene's revenue exceeding 36 billion yuan, demonstrating strong commercial capabilities. Profitability is also gradually emerging, as leading companies like InnoCare Pharma and RemeGen Co. achieved annual breakeven for the first time, while Allist Pharmaceuticals reported annual net profit attributable to shareholders of over 2 billion yuan. The innovative drug industry is gradually moving beyond the R&D investment phase into a new stage of earnings realization.
Kaiyuan Securities stated that Chinese innovative drugs are experiencing dual breakthroughs in commercialization and internationalization. Overall, they maintain a positive outlook on innovative drugs and their industrial chain (CXO + research services), as well as strategic emerging industries like AI, brain-computer interfaces, and biomanufacturing. Recent valuations of leading companies appear attractive, suggesting focus at current levels.
The Hong Kong pharmaceutical sector has been adjusting for nearly two quarters, and current levels offer investment value. Accumulating core pharmaceutical assets at low levels can be efficiently achieved through ETFs, offering high elasticity and T+0 trading. For investing in innovative drugs, consider the Hong Kong Stock Connect Innovative Drug ETF (520880) and its feeder fund (025221). It provides 100% exposure to innovative drug R&D companies, with the top ten holdings accounting for over 73%, highlighting its focus on industry leaders. For healthcare exposure, the Huabao Hong Kong Stock Connect Healthcare ETF (159137) targets medical innovation, encompassing hot concepts like AI healthcare, brain-computer interfaces, and online pharmacies, while also covering leaders across the entire innovative drug industry chain.
II. ByteDance Releases Seedream5.0, Challenging Nano Banana Pro! STAR Market AI ETF with Over 29% Byte Exposure Rises 1.8% Ahead of the Spring Festival AI red envelope competition, ByteDance has released positive news. The STAR Market Artificial Intelligence ETF (589520), with over 29% exposure to the ByteDance ecosystem, saw its price rise over 2.4% intraday, finally closing up 1.81% and reclaiming the 10-day moving average. Among constituent stocks, VeriSilicon Holdings led gains, rising over 8%, followed by CloudMinds Technology gaining over 6%, Anlogic Technology and CloudWalk Technology both up over 3%, with Montage Technology, Kingsoft Office, and Cambricon Technologies also advancing.
Key developments include: 1) ByteDance recently launched the Seedance2.0 video generation model, sparking widespread evaluation and discussion within the AI industry, with impressive real-world test results; 2) ByteDance just released its latest image generation model, Seedream5.0, which rivals Nano Banana Pro and is available for free trial; 3) Doubao announced it will distribute over 100,000 tech gifts and cash red envelopes to national viewers during the live broadcast of the 2026 CCTV Spring Festival Gala on New Year's Eve.
Huaxi Securities believes the Spring Festival period has become a "singularity moment" for AI applications competing for the next generation of user traffic, with substantial subsidies potentially being the most efficient way to cultivate user habits. Notably, ByteDance is a core leader in domestic AI. The constituent stocks of the benchmark index for the STAR Market Artificial Intelligence ETF (589520) have deep collaborations with ByteDance, with the ByteDance industrial chain weighting reaching 29.42% as of end-January 2026.
Guolian Minsheng Securities expressed continued optimism towards AI investment opportunities, validating high industry景气 from four dimensions: 1) Increased capital expenditure by tech giants; 2) AI assistants like Clawdbot signal AI's transition from conversational tools to executors, with promising prospects for edge AI products; 3) Ongoing tight supply-demand dynamics for computing infrastructure are driving upstream inflation, evidenced by cloud provider price hikes and rising H100 leasing costs, suggesting continued price increases in the storage sector; 4) AI has entered a phase of application落地, accelerating demand, and共振 with industrial chain景气, warranting a全面看多 outlook on the AI industry trend.
[Light of Domestic Substitution, Self-Reliance in Sci-Tech Innovation] The STAR Market Artificial Intelligence ETF (589520) and its feeder funds (Feeder A: 024560, Feeder C: 024561) focus on the domestic AI industrial chain. Constituents include leading domestic GPU companies (e.g., Cambricon Technologies), leading domestic ASIC firms (e.g., VeriSilicon Holdings), and leading AI application companies (e.g., Kingsoft Office). The semiconductor industry weight is nearly half, providing strong offensive characteristics; the software industry weight exceeds 30%, potentially benefiting from catch-up rallies in AI applications. This ETF is also a margin trading标的, making it an efficient tool for one-click allocation to domestic computing power.
III. 'Super Cycle' Arrives! Memory Chips and Semiconductor Equipment Rise; VeriSilicon Hits Record High! 'All-Chip' STAR Market Chip ETF (589190) Tests 2% Gain Computing hardware continued its strength, with memory chips and semiconductor equipment advancing together. During the morning session, VeriSilicon Holdings surged over 10% to a record high, while Huafeng Test Control led gains in the afternoon, closing up nearly 9%. Additionally, Dosin Electron rose over 6%, Hygon Information gained over 3%, and Montage Technology advanced over 2%. The all-chip Huabao STAR Market Chip ETF (589190) saw its price rise over 2% intraday, closing up more than 1% and standing above the 10-day moving average.
Drivers include, on one hand, the ongoing wave of memory chip price increases. According to Counterpoint's "Memory Price Tracker" report, global memory prices surged 80% to 90% quarter-over-quarter in Q1 2026, setting an unprecedented record for increases. TrendForce data indicates that boosted by the AI wave, memory industry产值 is expected to hit a new high in 2026, with the scale potentially expanding significantly to $551.6 billion. On the other hand, the semiconductor equipment industry景气 is rising. Data from the Semiconductor Industry Association (SIA) shows total industry sales reached $791.7 billion in 2025, with an expected 26% growth in 2026. The SIA noted that the market is reaching the $1 trillion milestone much faster than initially anticipated, boosting optimistic expectations for the overall semiconductor industry景气.
Galaxy Securities stated that the current moment marks a new starting point for the next cycle in the memory chip track. Driven by high growth in AI server demand coupled with domestic substitution, they are optimistic about investment opportunities in the domestic memory industry chain.
Guosheng Securities indicated that under the influence of regional politics, local equipment manufacturers are expected to benefit from stronger domestic substitution trends and expanded production capacity. In 2026, domestic semiconductor equipment companies may undergo value re-rating, warranting high attention to core expansion equipment (etching, thin-film deposition, etc.) and segments with very low domestic substitution rates (metrology/inspection, lithography machines). Furthermore, they emphasized that based on current demand and expansion plans, the order sustainability for domestic equipment manufacturers will further strengthen.
To position for the chip industry's 'super cycle', consider high-elasticity 20CM varieties. Public information shows the Huabao STAR Market Chip ETF (589190) and its feeder funds (Class A: 021224, Class C: 021225) passively track the SSE STAR Market Chip Index, which includes 50 hard-tech constituents involved in semiconductor materials and equipment, chip design, chip manufacturing, and chip packaging and testing. While providing full-chain exposure to the chip industry, it has over 90% weight in core areas like integrated circuits and semiconductor equipment, reflecting high hard-tech content and strong technical barriers.
Data shows that as of the end of 2025, the SSE STAR Market Chip Index had an annualized return of 17.93% since its base date, significantly outperforming peers like the STAR Market ChiNext Semiconductor Index, the China Securities Chip Index, and the CSI All Share Semiconductor Index, while also exhibiting smaller maximum drawdowns and a better risk-return profile.
Note: The Huabao STAR Market Chip ETF passively tracks the SSE STAR Market Chip Index. The index base date is December 31, 2019, and its release date was June 13, 2022. The index's performance for the past five full years is: 2021: +6.87%, 2022: -33.69%, 2023: +7.26%, 2024: +34.52%, 2025: +61.33%. Index constituent composition is adjusted according to its rules; past performance does not indicate future results. Note: Fee rates are detailed in respective fund legal documents. Source: SSE, SZSE, etc., as of February 10, 2026. Reminder: Recent market volatility may be high; short-term gains/losses do not predict future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying high attention to position and risk management.
Risk Warning: The Hong Kong Stock Connect Innovative Drug ETF and its feeder fund passively track the Hang Seng Hong Kong Stock Connect Innovative Drug Selection Index (Base Date: Dec 31, 2020; Release Date: July 17, 2023). The Huabao Hong Kong Stock Connect Healthcare ETF passively tracks the CSI Hong Kong Stock Connect Healthcare Theme Index (Base Date: Dec 31, 2018; Release Date: July 21, 2022). The Huabao STAR Market Artificial Intelligence ETF passively tracks the SSE STAR Market Artificial Intelligence Index (Base Date: Dec 30, 2022; Release Date: July 25, 2024). The Huabao STAR Market Chip ETF passively tracks the SSE STAR Market Chip Index (Base Date: Dec 31, 2019; Release Date: June 13, 2022). Index constituent composition is adjusted according to rules; past performance does not indicate future results. Stocks mentioned are for illustrative purposes only as index constituents and do not constitute recommendations or represent fund management direction. All information herein is for reference only; investors are responsible for their investment decisions. Views, analysis, and forecasts do not constitute investment advice, and no liability is accepted for losses arising from the use of this content. Investors should read the Fund Contract, Prospectus, and Key Fund Information Document to understand the fund's risk-return profile and choose products matching their risk tolerance. Past performance does not guarantee future results. Other funds' performance does not guarantee this fund's performance. Based on the manager's assessment, the Huabao STAR Market AI ETF, Huabao STAR Market Chip ETF, Hong Kong Stock Connect Innovative Drug ETF, and Huabao Hong Kong Stock Connect Healthcare ETF carry an R4 risk rating, suitable for Aggressive (C4) and above investors. Suitability matching opinions are subject to sales institutions. Sales institutions assess fund risk per regulations; investors should note the manager's suitability opinion, which may differ among institutions, but sales institutions' risk ratings cannot be lower than the manager's. Risk characteristics in the fund contract may differ from the risk rating due to different factors. Investors should understand the fund's risk-return profile and make prudent choices based on their investment objectives, horizon, experience, and risk tolerance. CSRC registration does not guarantee fund value, prospects, or returns. Invest cautiously.
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