On September 11, the A-share market saw broad declines on heavier volume, with over 4,800 stocks closing in the red and turnover reaching 1.99 trillion yuan, a surge of nearly 20% from the previous trading day. The Shanghai Composite Index remained below the waterline throughout the session, closing 1.18% lower and slipping below the 3,900-point mark. The Shenzhen Component Index fell 1.08% for a fourth consecutive day of losses, while the ChiNext Index declined 0.49%. On the news front, multiple negative factors resonated from overseas markets overnight: commodity prices fell collectively, a major overseas memory chip leader tumbled, the US August PPI exceeded expectations and fueled rate hike speculation, and the European Central Bank delivered a rate hike.
The nonferrous metals sector led the market's decline, with the underlying index of the Nonferrous Metals ETF Huabao (159876), which encompasses the sector's leading companies, closing 4.04% lower and giving up all key moving averages. Huabao Fund believes the current market volatility is primarily driven by capital caution and sentiment positioning ahead of a critical window, rather than any breakdown in industry fundamentals. The banking sector's attempt to support the market ultimately failed, with the sector retreating in the afternoon and snapping its winning streak. The Bank ETF Huabao (512800) pulled back after hitting a new yearly high intraday, with its underlying index ultimately closing 0.46% lower. Although it failed to extend gains, it still significantly outperformed the broader market, highlighting its defensive qualities in a volatile tape.
With the FCC policy finalized, concerns over optical communications have clearly eased. Optical module leaders rallied against the market trend, with Zhongji Innolight (300308) closing up 4% and Eoptolink Technology (300502) gaining nearly 3%. The target index of the high-optical-exposure ChiNext AI ETF Huabao (159363) staged a sharp "V-shaped" recovery during the session. Elsewhere, repeated shifts in overseas rate expectations continued to weigh on valuations, and A+H innovative drug stocks broadly underperformed. Both the Hong Kong Stock Connect Innovative Drug ETF Huabao (520880), which focuses 100% on innovative drug R&D names, and the Pharma ETF Huabao (562050), heavily weighted toward A-share innovative drug companies, extended their losing streak to five consecutive sessions.
For the week, A-share major indices faced broad pressure with most closing lower, though the ChiNext Index bucked the trend with a 1.08% gain. Trading volume contracted significantly, with weekly turnover of 9.46 trillion yuan marking the lowest weekly figure of the year, suggesting sentiment may have touched a freezing point. Tonight's US CPI reading could be the most critical variable at this stage: if it comes in below expectations, easing rate pressures could trigger a rebound, with AI-related names potentially leading the charge; if it overshoots, markets could face further downside pressure.
Here's a closer look at the trading and fundamental picture for a few key thematic sectors: ChiNext AI innovation, nonferrous metals, and innovative drugs.
Positive Signal Arrives, Optical Module Expectations Corrected! Zhongji Innolight and Eoptolink Rise Against the Trend, High-Exposure Index Stages V-Shaped Rebound - Is the Sword of Damocles No Longer Hanging?
Optical module leaders mounted a strong defense in the afternoon, helping the ChiNext Index pare its losses. Capital showed keen interest in positioning within the high-optical-exposure index, with the ChiNext AI ETF Huabao (159363) seeing elevated on-screen activity and its underlying index staging a "V-shaped" intraday reversal. Across the optical module supply chain, Zhongji Innolight closed up 4%, Eoptolink Technology gained nearly 3%, Zhaolong Interconnect (300913) led with an 8.63% surge, and Kingsignal Technology (300252) rose over 7%. AI applications turned active in the afternoon, with the logic of cost reduction in AI-driven film and television production gaining traction and Mango Excellent Media (300413) showing notable intraday strength.
Reports indicated that on September 10, the US Federal Communications Commission (FCC) published in the Federal Register a final rule titled "Securing the Information and Communications Technology and Services Supply Chain from National Security Threats through Equipment Authorization." The rule was approved on July 22 and formally published on September 11, taking effect 30 days thereafter. Notably, across the 13-page document, optical module companies such as Eoptolink, Zhongji Innolight, and T&S Communications (300394) were not specifically named. Market interpretation suggests that with the FCC policy now finalized, concerns over optical communications have notably eased. The restrictions primarily target Covered List-related logic devices and do not extend to the entire optical communication category. Since none of these companies appeared on any list, the most extreme bearish assumptions from before have essentially failed to materialize. Among these, the policy certainty for passive components is even higher, overall aiding in improving risk appetite for the optical communication sector.
According to Zhongtai Securities, optical modules remain the segment with the strongest earnings delivery. The industry is expected to continue benefiting from the triple drivers of AI compute expansion, speed upgrades, and network architecture evolution. In the optical module segment, 800G products remain in high demand, 1.6T products are entering a phase of significant volume ramp-up, and the industry is evolving toward 3.2T and CPO/NPO architectures. Overall, the industry's prosperity cycle remains on an upward trajectory. Key factors to monitor going forward include the sustainability of AI capital expenditures, the pace of high-speed product ramp-ups, and the earnings delivery capability across various sub-segments.
*For investors looking to capture the high-optical-exposure theme and AI applications, the ChiNext AI ETF Huabao (159363) and its off-exchange feeder funds (Class A: 023407, Class C: 023408) are worth attention. The ETF focuses on optical module CPO leaders while also covering AI applications. The underlying index has a combined weight of over 35% in Zhongji Innolight, Eoptolink, and T&S Communications, positioning it as a core proxy for AI compute strength. Data sources: Shanghai and Shenzhen Stock Exchanges, Wind. Note: As of August 31, 2026, according to Guozheng Index, the top three constituent stocks of the ChiNext AI Index are Eoptolink (12.61%), Zhongji Innolight (11.99%), and T&S Communications (10.25%).
Tonight! US CPI Takes Center Stage! Triple Factors Weigh, Nonferrous Metals ETF Gaps Down - Huabao Fund's Rapid Analysis: A New Phase May Emerge After Macro Disruptions Settle
As the market consolidated, all major A-share indices corrected, with the nonferrous metals sector leading the overall decline. The underlying index of the Nonferrous Metals ETF Huabao (159876), covering the sector's leading companies, gapped lower at the open, at one point sliding over 6.4% before closing down 4.04%. Among constituents, Western Superconducting Technologies (688122) bucked the trend with a gain of over 3%, Chujiang New Materials (002171) rose more than 2%, and Chifeng Jilong Gold (600988) finished in positive territory. On the other hand, copper leaders underperformed significantly, with North Copper (000737) hitting the daily limit down and Yunnan Copper (000878) dropping over 8%. Heavyweights such as Zijin Mining (601899) and CMOC Group (603993) also pulled back with the broader market.
Why the sharp pullback in nonferrous metals? Several factors appear to be at play: ① The US PPI data exceeded expectations, with energy prices pushing up overall inflation and causing a spike in Fed rate hike expectations; ② The ECB's 25bp rate hike, combined with growing expectations of a BOJ rate hike, intensified expectations of tightening global liquidity, pointing to a stronger US dollar and raising the holding cost of dollar-denominated metals; ③ The US White House has yet to finalize its refined copper tariff policy. Recent sharp copper price gains were partly driven by tariff expectations; with policy momentum now slowing, the support for copper price sentiment has weakened.
According to Huabao Fund's analysis, today's decline reflects an obvious element of oversold sentiment. The delay of copper tariffs is merely a phased trade-off by the Trump administration ahead of the midterm elections and does not imply the matter is permanently shelved. While the US is seeing phased inventory builds, global total inventories are slowly declining. The tight supply-demand balance has not reversed, suggesting copper prices still have underlying support. The broad market decline is mainly due to the resonance of above-consensus US PPI data and overseas rate hike expectations. However, the PPI overshoot was primarily driven by crude oil prices, and it is difficult to directly extrapolate tonight's US CPI direction from PPI alone. There may be room for short-term panic sentiment to repair.
Looking ahead, the US CPI inflation data is scheduled for release at 8:30 PM Beijing time tonight (September 11). This reading could directly influence the Fed's September FOMC meeting decision (September 15-16) and consequently determine whether the financial attribute pressure on nonferrous metals eases. Huabao Fund believes the current market volatility stems mainly from pre-window capital caution and sentiment positioning rather than a collapse in industrial logic. Investors are advised to stay rational, avoid emotionally driven trading, and patiently await the full digestion of macro disruptions. In the new phase after the Fed's September meeting and before the US November midterm elections, the valuation recovery and fundamental growth logic of the nonferrous sector may gradually return. Overall, the short-term pullback is solidifying the sector's bottom, and the medium-to-long-term allocation value of nonferrous metals remains attractive.
The Foundation Stone of the Computing Era: Nonferrous Metals
The Nonferrous Metals ETF Huabao (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an underlying index that comprehensively covers industry leaders across copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin, with key weights including Zijin Mining, CMOC Group, Northern Rare Earth (600111), and Chalco (601600). According to 2026 interim results, all 60 constituent stocks were profitable, with nearly half of the constituents seeing net profit attributable to parent grow by more than 100% year-over-year, providing solid fundamental support. Additionally, the constituent count is significantly higher than similar nonferrous indices (typically 30-50 stocks), allowing for better coverage of semiconductor and new materials directions. This makes it a suitable tool for investors who are bullish on both technology and nonferrous metals, enabling one-click positioning in the sector and capturing the broad beta of the entire segment.
Note: The individual stocks mentioned above are constituents of the underlying index of the Nonferrous Metals ETF Huabao (159876). As of the end of August, their respective weights are: Western Superconducting Technologies, 0.97%; Chujiang New Materials, 0.57%; Chifeng Jilong Gold, 3.33%; North Copper, 0.62%; Yunnan Copper, 1.08%; Zijin Mining, 11.14%; CMOC Group, 7.12%; Northern Rare Earth, 4.40%; Chalco, 3.31%. The constituent stocks mentioned in this article are for illustrative purposes only. Any individual stock description does not constitute investment advice in any form, nor does it represent the holdings or trading activity of any fund managed by the fund manager.
Major Conference Looms Yet Innovative Drugs Show No Improvement - What's Going On? Huabao Fund's HK Connect Innovative Drug ETF (520880) Breaks Below All Key Moving Averages
On the eve of the 2026 WCLC (World Conference on Lung Cancer), A+H innovative drug stocks have failed to stabilize, extending their losing streak to five consecutive sessions this week. The Hong Kong Stock Connect Innovative Drug ETF Huabao (520880), which focuses 100% on innovative drug R&D companies, has broken below all key moving averages. Meanwhile, the underlying index of the Pharma ETF Huabao (562050), heavily weighted toward A-share innovative drug names, has seen both its daily and weekly candlestick charts record five consecutive bearish closes.
What is driving the current pullback in innovative drugs? A review of market analyses points to three converging pressures. On the fundamentals front, the national medical insurance negotiations have concluded, prompting early investors to lock in gains. From September 5 to September 8, the 2026 National Basic Medical Insurance Drug Catalogue on-site negotiation and bidding concluded, alongside the completion of price consultations for commercial health insurance innovative drug catalogue. With the negotiation period over and results awaited, there is a lack of near-term catalysts. Early investors have chosen to take profits, resulting in a classic "sell the news" correction.
On the sentiment front, repeated fluctuations in overseas rate expectations are suppressing valuations. The 10-year US Treasury yield has climbed to near three-year highs, with markets pricing in approximately a 70% probability of a 25bp Fed rate hike in September. This directly pressures innovative drug valuations, which rely heavily on discounted future cash flows. Additionally, rising energy supply risks and oil prices have heightened inflation concerns, further dampening appetite for high-risk growth stocks.
On the capital flows front, rotation is driving outflows. In recent weeks, A-share and HK markets have been trading in a contracted, consolidative range with accelerated sector rotation. Capital is swiftly shifting between sectors, with some funds exiting innovative drugs in favor of defensive plays like high-dividend names due to risk aversion.
What is the outlook? In the near term, the sector may continue to consolidate due to market sentiment. However, over the medium term, a dense calendar of industry catalysts could revive momentum: the WCLC meeting on September 12 and the ESMO (European Society for Medical Oncology) conference starting October 23 will see key clinical data disclosures from companies such as Kelun-Biotech (06990), RemeGen (09995), and Sino Biopharmaceutical (01177). Furthermore, the new version of the medical insurance/commercial insurance catalogue is set to take effect on January 1, 2027.
For investors looking to position in innovative drugs at lower levels, two tools are worth considering: The Hong Kong Stock Connect Innovative Drug ETF Huabao (520880) closely tracks the Hang Seng HK Stock Connect Innovative Drug Select Index, with 100% allocation to innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, giving it prominent large-cap characteristics. The underlying assets are HK-listed stocks, offering high beta and T+0 trading. The Pharma ETF Huabao (562050) is the only ETF in the market tracking a pharmaceutical index, featuring an exclusive allocation of "72% innovative drugs + 22% traditional Chinese medicine," combining the high growth of innovative drugs with the high dividends of TCM.
Data sources: CSI Index, Shanghai-Hong Kong-Shenzhen Stock Exchanges, iFind. Institutional view: Zhongtai Securities, "Optical Communications Boom Continues, Awaiting Valuation Repair - 2026 Mid-Year Review of the Optical Communications Industry." Fund fee note: ETF funds do not charge sales service fees. When subscribing or redeeming fund shares, the subscription/redemption agent broker may charge a commission of up to 0.5%, which includes fees charged by stock exchanges and registration institutions. For detailed fee schedules, please refer to the respective fund legal documents.
Special reminder: According to the fund manager's assessment, the ChiNext AI ETF Huabao, the Hong Kong Stock Connect Innovative Drug ETF Huabao, and their feeder funds carry a risk rating of R4 (medium-high risk), suitable for aggressive (C4) and above investors. The other funds mentioned in this article carry a risk rating of R3 (medium risk), suitable for balanced (C3) and above investors. Suitability matching opinions should be based on the sales institution's assessment.
Risk disclosure: The Bank ETF Huabao passively tracks the CSI Bank Index, which has a base date of December 31, 2004, and was published on July 15, 2013. The CSI Bank Index's returns over the past five complete years are: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%. The volatility over the past five complete years: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. The constituent stocks of the index are adjusted in accordance with the index compilation rules from time to time. Past performance does not indicate future results. The individual stocks mentioned in this article are solely an objective display of index constituents and do not constitute recommendations for any stock, nor do they represent the fund manager's or the fund's investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must be solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any form. The company shall not be liable for any direct or indirect losses arising from the use of the content of this article. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary to understand the risk-return characteristics of the fund and choose products that match their own risk tolerance. Past performance of a fund does not predict its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Sales institutions (including the fund manager's direct sales institutions and other sales institutions) conduct risk assessments on the above funds in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions are not necessarily consistent, and the risk rating results issued by fund sales institutions must not be lower than the risk rating results issued by the fund manager. The risk-return characteristics described in the fund contract and the fund risk rating may differ due to different factors considered. Investors should understand the risk-return profile of the fund, carefully choose fund products based on their own investment objectives, horizon, experience, and risk tolerance, and bear the risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that they have made any substantive judgment or guarantee on the investment value, market prospects, or returns of these funds. Fund investment requires caution.