On September 4, the A-share market opened higher but retreated in the afternoon, with a sudden selloff dragging the ChiNext Index down 0.78% after earlier climbing nearly 2% in morning trade. The STAR 50 Index fell over 2%, while total market turnover expanded back above the 2 trillion yuan threshold on a daily basis, with more than 2,900 stocks closing lower across the board.
Market action showed a clear divergence, with gains concentrated along two key tracks: value plays in traditional sectors and AI application scenarios. The agriculture, fishery, and animal husbandry segment mounted a fresh offensive, with grain and pork-related stocks triggering a wave of limit-up moves. The benchmark index tracked by the Huabao Agriculture, Fishery and Animal Husbandry ETF (159275) surged 4.24%, while the index underlying the Huabao Food and Beverage ETF (515710) gained nearly 2%. The Huabao Banking ETF (512800) benchmark edged up close to 1%.
Meanwhile, AI momentum shifted toward application and software layers. The benchmark index tracked by the Huabao Hong Kong Internet ETF (513770) climbed over 4% intraday before closing 3.64% higher. The Huabao Fintech ETF (159851) benchmark rose as much as 5% during the session, settling 2.4% higher, while the Huabao Software Development ETF (159036) benchmark advanced more than 1%. In contrast, hard-tech names in the chip and optical communications space continued their pullback.
With risk aversion building ahead of the US non-farm payroll report due tonight, the August jobs data serves as the most critical macroeconomic release before the Federal Reserve's rate decision and will directly shape the subsequent policy path. The market has entered a key observation window ahead of the September FOMC meeting, and near-term liquidity expectations could pressure valuations, prompting institutions to recommend focusing on sectors with higher earnings visibility.
Where the market stands now
China Merchants Securities believes the market can sustain its rebound trajectory into September. From a broader cyclical perspective, the A-share market remains in the third phase of an earnings-driven uptrend, a view validated by second-quarter reports showing continued profit improvement. Sectors delivering strong earnings growth are transitioning from narrative to actual financials, and from valuation expansion to profit confirmation, keeping the market on an upward path powered by earnings momentum.
The following sections take a closer look at the trading activity and fundamentals behind the agriculture, Hong Kong internet, and fintech sectors.
Agriculture sector storms higher as pig prices rebound
The agriculture, fishery, and animal husbandry segment pressed its offensive today, with planting-chain and livestock-farming stocks leading the way. By the close, Yashang Group, Dunhuang Seed, New Wulong, Bangji Technology, Tech-bank Food, New Hope, and Zhongshui Fishery all hit limit-up, while Jinxin Nongmu, Tangrenshen, and Jumu Agriculture also posted strong gains. The CSI All-Select Agriculture, Fishery and Animal Husbandry Index, the benchmark for the Huabao Agriculture ETF (159275), closed 4.24% higher.
On the news front, hog prices continue to firm. Data through September 4 shows the national average live hog price at 11.06 yuan per kilogram, rebounding nearly 17% from the June low of 9.47 yuan. On September 4, quotes in northern China and parts of East China moved higher, helping stabilize the broader market. Early-month output increases from large-scale farms remain limited, and with prices falling for a stretch, farmers have grown more reluctant to sell, adding to the supportive tone.
Analysts note that while hog prices bounced off lows in August, the industry as a whole remains in a loss-making position, with the cyclical inflection point still taking shape. Although views differ on the exact timing of the turning point, there is broad consensus that capacity reduction is ongoing. As losses accumulate, smaller and scattered producers are exiting faster, which should set up stronger upside elasticity for the next upcycle in 2027.
From a valuation standpoint, the sector remains at relatively depressed levels, which some see as a favorable entry window. According to Wind data, as of the September 3 close, the benchmark CSI Agriculture, Fishery and Animal Husbandry Index traded at a price-to-book ratio of 2.37 times, sitting at just the 15.75th percentile of its five-year range, underscoring its mid-to-long-term value proposition.
Looking ahead, Sinolink Securities points out that policy support for industry capacity controls has intensified since the second half of 2025, and recent moves from regulators suggest further tightening is likely. In the near term, subdued hog prices combined with policy-driven measures should accelerate capacity contraction, paving the way for a new cyclical upturn. Over the medium and long term, the hog farming industry still offers solid mid-cycle profit potential. Since the African swine fever outbreak, many players expanded capacity hastily with poor quality, leaving wide cost dispersion across the industry. Leading producers with superior cost structures have ample excess profit to unlock, making them the preferred picks.
The Huabao Agriculture ETF (159275) passively tracks the CSI All-Select Agriculture, Fishery and Animal Husbandry Index, which includes leading hog producers as well as feed, grain planting, and animal health companies across the full value chain. Off-exchange investors can also access the sector through the linked feeder fund (A-share class 013471, C-share class 013472).
Soft tech takes off as Alibaba, Tencent, Meituan rally together
Hong Kong stocks opened stronger and kept climbing, with internet leaders broadly higher. Meituan-W gained over 5%, Xiaomi Corp-W rose more than 3%, and Alibaba-W and Tencent Holdings each advanced over 2%. The benchmark tracking the Huabao Hong Kong Internet ETF (513770) briefly rose more than 4% before closing 3.64% higher.
Three factors appear to be driving the renewed strength in Hong Kong internet stocks. First, Federal Reserve Governor Christopher Waller's dovish remarks have significantly cooled expectations for a September rate hike. Second, overnight gains across the three major US indices provided a positive spillover to Hong Kong. Third, US cloud data platform Snowflake surged 55%, touching an all-time high intraday on impressive revenue growth, validating the commercial promise of AI applications and providing a strong read-through to the Hong Kong internet sector.
With earnings fully reported for Alibaba, Tencent, and Meituan, core businesses have demonstrated resilience, AI strategies are advancing across the board, and large-model iterations alongside agent commercialization are accelerating, leaving room for both earnings growth and valuation recovery. Kaiyuan Securities says the commercialization runway for AI applications is opening up, with Tencent and other major players continuing to validate business models for AI office products. Consumer-facing agents could be the next breakthrough, potentially driving sustained growth in domestic model token volumes and annual recurring revenue, while accelerating agent adoption in digital entertainment content production, enterprise office workflows, and physical AI applications. AI application monetization is expected to speed up, which in turn will lift demand for inference-side computing power.
Galaxy Securities believes the global AI pricing logic is shifting from hardware infrastructure toward application monetization. With expectations for domestic large-model commercialization heating up, investors can look at AI application leaders, internet platforms with traffic moats, and technology companies making sustained AI investments that could convert into earnings.
In the AI value chain, there is a clear sequence of value realization. In the early phase, infrastructure segments such as optical modules, co-packaged optics, memory, and AI chips, the so-called pick-and-shovel players, command premium valuations and strong gains due to scarce supply and certain demand. Once technology matures and computing capacity is broadly deployed, the companies that matter most over the medium and long term are those that achieve consumer-facing deployment, generate steady cash flows, and accumulate genuine traffic. With AI evolving and commercialization accelerating, the Hong Kong internet sector could see a strategic investment window open as earnings recover and valuations repair in tandem.
The Huabao Hong Kong Internet ETF (513770) passively tracks the CSI Hong Kong Stock Connect Internet Index, with top holdings including major cloud providers like Alibaba-W and Tencent Holdings alongside AI application companies in various verticals. The top ten constituents account for over 80% of the index weight, highlighting the dominance of leading players. The fund supports same-day T+0 trading with strong liquidity, and off-exchange investors can access it via the linked feeder fund (A-share class 017125, C-share class 017126).
Fintech breaks higher with 7 limit-ups in 11 days for leading stock
The fintech sector defied the broader market weakness, with gains spread widely across the board. The Huabao Fintech ETF (159851) saw noticeably higher on-exchange activity, with its benchmark index closing 2.4% higher. Chutian Dragon recorded its seventh limit-up in eleven trading days, Cuiwei shares hit the daily ceiling, and SFIT, Yingfang Software each jumped over 12%, while Hengbao, Lakala, Colay, Liangzhi Software, and Yuxin Software all advanced more than 5%.
Looking at recent market dynamics and capital flows, the fintech sector is attracting multiple positive catalysts simultaneously, and a reassessment of its allocation value from a structural perspective appears warranted at this stage. Specifically, the sector is forming a three-dimensional convergence pattern of theme continuation, AI empowerment, and oversold recovery. First, the digital economy theme continues to develop smoothly with orderly internal rotation. Among the market's high-profile leaders, Chutian Dragon has delivered an impressive 11-day, 7-limit-up run, with Hengbao and Cuiwei following closely behind in an orderly relay. The sector has not shown notable divergence, with funds rotating constructively across sub-segments and profit effects spreading to second-tier names, reflecting solid theme durability and deep capital participation. Near-term momentum has a foundation for further expansion.
Second, expectations for AI-plus-finance commercialization are building and could serve as the next catalyst. The recent successful launch of China's first full-length AI drama marks a shift for AI applications from technical validation to scaled commercial deployment. Fintech, one of the most direct beneficiaries of AI enablement with the richest data foundation, has broad headroom for penetration gains in intelligent investment research, risk modeling, and automated operations, positioning it to capture outsized gains in the AI application diffusion wave.
Third, valuation repair momentum after sharp declines is accumulating. As of September 3, 2026, the fintech index had fallen nearly 24% year-to-date, with both the duration and magnitude of the correction appearing sufficient and valuations having retreated significantly. With broader market rotations underway, attention to low-valuation, high-beta sectors is picking up, and the energy for an oversold bounce may be building. Should sentiment turn, the upside elasticity deserves close attention.
Chen Jianhua, fund manager of the Huabao Fintech ETF (159851), recently noted that the fintech index has reclaimed its 60-day moving average for the first time in 2026, with stronger intra-sector linkages and orderly relay among high-profile names in the digital economy space. Capital movements may signal potential catalysts ahead. Given the sector's sharp drawdown this year versus other tech indices, there is strong catch-up demand. The combination of technical breakout and valuation trough gives fintech both downside protection and offensive potential, suggesting opportunities for bargain-hunting on pullbacks with a swing-trading approach.
For positioning, the Huabao Fintech ETF (159851) and its feeder fund (A-share class 013477, C-share class 013478) track an index heavily weighted toward computer and non-bank financial stocks, covering internet brokerages, fintech IT, cross-border payments, and AI applications, blending financial cycle sensitivity with tech growth characteristics.
Data sources: Shanghai and Shenzhen stock exchanges, as of September 4, 2026. Fund fee details are available in each fund's legal documents. Institutional views referenced from China Merchants Securities (August 30), Sinolink Securities (September 2), Kaiyuan Securities (September 1), and Galaxy Securities (August 28).
Risk disclosure: The Huabao Agriculture ETF (159275) passively tracks the CSI All-Select Agriculture, Fishery and Animal Husbandry Index, with a base date of December 31, 2004, and a release date of December 12, 2016. The Huabao Hong Kong Internet ETF (513770) tracks the CSI Hong Kong Stock Connect Internet Index, with a base date of December 30, 2016, and a release date of January 11, 2021. The Huabao Fintech ETF (159851) tracks the CSI Fintech Theme Index, with a base date of June 30, 2014, and a release date of June 22, 2017. Index constituent compositions adjust over time according to index methodology, and backtested historical performance does not predict future results. Stocks mentioned in this article are objective demonstrations of index constituents and do not constitute stock recommendations or represent the fund manager's or fund's investment direction. Any information appearing in this article, including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, or any other form of expression, is for reference only. Investors must bear responsibility for their own investment decisions. Any views, analysis, or forecasts in this article do not constitute investment advice to readers, and the company assumes no liability for direct or indirect losses arising from use of this content. Investors should carefully read the fund contract, prospectus, and fund product summary to understand the risk-return profile and select products aligned with their own risk tolerance. Past fund performance does not predict future results, and performance of other funds managed by the same manager does not guarantee the performance of this fund. Based on the fund manager's assessment, the Huabao Agriculture ETF (159275) and Huabao Fintech ETF (159851) carry a risk rating of R3-medium risk, suitable for balanced (C3) and above investors. The Huabao Hong Kong Internet ETF (513770) carries a risk rating of R4-medium-high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions are subject to sales institution determinations. Sales institutions, including the fund manager's direct sales channels and other distributors, conduct risk evaluations on the above funds according to applicable regulations. Investors should promptly review suitability opinions issued by the fund manager, as opinions among sales institutions may differ, and risk ratings provided by sales institutions must not be lower than those issued by the fund manager. Differences exist between the risk-return characteristics described in fund contracts and fund risk ratings due to different factors considered. Investors should understand the risk-return profile, carefully consider their investment objectives, time horizon, experience, and risk tolerance, and choose fund products prudently while bearing their own risks. Registration of these funds with the China Securities Regulatory Commission does not imply any substantive judgment or guarantee regarding their investment value, market prospects, or returns. Fund investment requires caution.