On May 15th, domestic semiconductor stocks retreated after an initial surge, with most individual stocks undergoing corrections. Hygon Information Technology Co.,Ltd. fell over 5%, BIWIN Storage Technology Co.,Ltd. declined more than 4%, and Cambricon Technologies Corporation Limited dropped over 2%. Semiconductor Manufacturing International Corporation bucked the trend and rose against the broader market decline following its earnings report. The intraday price of the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which offers a comprehensive portfolio across the chip industry, is currently down 3.47%.

The latest first-quarter earnings reports from Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor Limited provided key market updates. Semiconductor Manufacturing International Corporation reported quarterly sales revenue of $2.505 billion, representing a sequential increase of 0.7%. Its Q2 revenue guidance projects sequential growth of 14-16%, significantly surpassing market expectations of 7%, indicating robust underlying downstream demand and a strong order book. Hua Hong Semiconductor Limited reported first-quarter operating revenue of 4.625 billion yuan, a year-on-year increase of 18.22%, with net profit surging 513.10% year-on-year to 139 million yuan.

Analysis suggests the recent market pullback is related to factors such as the realization of prior expectations, persistently rising oil prices, profit-taking in the technology sector, and diminished expectations for U.S. interest rate cuts following higher-than-expected CPI data. This is viewed as a normal technical correction following a sustained rally, rather than a trend reversal signaling the end of the uptrend. The semiconductor industry's prosperity and earnings growth momentum remain fundamentally supported.

It is worth noting that during this year's market activity, the Sci-Tech Innovation Board chip sector has demonstrated strong upward momentum. The SSE Sci-Tech Innovation Board Chip Index has cumulatively gained 52.64% over the period, performing relatively well among semiconductor chip indices.

Note: The full-year performance of the SSE Sci-Tech Innovation Board Chip Index for the past five complete years is as follows: 2021: +6.87%, 2022: -33.69%, 2023: +7.26%, 2024: +34.52%, 2025: +61.33%. The index constituents are adjusted periodically according to its compilation rules. Its past performance does not guarantee future results.

For investors looking to position for the chip industry's potential "super cycle," high-beta instruments offer a strategic choice. Public information indicates that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds (Class A: 021224, Class C: 021225) passively track the SSE Sci-Tech Innovation Board Chip Index. While providing balanced exposure and full-chain coverage of the chip industry, the fund allocates over 90% of its weight to core areas such as integrated circuits and semiconductor equipment, reflecting high concentration in hard technology with strong technical barriers.

Data source: Shanghai and Shenzhen Stock Exchanges, etc.

ETF Fee-related Information: When subscribing for or redeeming fund units, the subscription/redemption agency may charge a commission of up to 0.5%, which includes relevant fees charged by the stock exchanges and registration institutions. Feeder Fund Fee-related Information: For the Huabao SSE Sci-Tech Innovation Board Chip ETF Feeder Fund Class A, the subscription fee (front-end load) is 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.2% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 0.5% for amounts below 1 million yuan. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. The Huabao SSE Sci-Tech Innovation Board Chip ETF Feeder Fund Class C does not charge a subscription fee. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. A sales service fee of 0.2% applies.

Risk Disclosure: The Huabao Sci-Tech Innovation Board Chip ETF passively tracks the SSE Sci-Tech Innovation Board Chip Index. The base date of this index is December 31, 2019, and its release date is June 13, 2022. This product is issued and managed by Huabao Fund. Distributing institutions do not bear responsibility for the product's investment, payment, or risk management. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal fund documents to understand the fund's risk-return characteristics and select a product suitable for their own risk tolerance. The fund manager assesses this fund's risk rating as R4 - Medium to High Risk, suitable for investors with a suitability rating of C4 or above. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance of the fund is not indicative of its future results. Funds carry risks, and investment requires caution. Sales agencies (including the fund manager's direct sales channels and other sales agencies) evaluate the risk of this fund according to relevant laws and regulations. Investors should pay timely attention to the suitability opinions issued by the fund manager. Suitability opinions from different sales agencies may not necessarily be consistent. The fund product risk rating results issued by fund sales agencies shall not be lower than the risk rating results determined by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different considerations. Investors should understand the fund's risk-return profile and choose fund products prudently based on their own investment objectives, time horizon, investment experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate its substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks, and investment requires caution.