The market consolidated today (September 28), with all major A-share indices closing in the red. The hard-tech broad-based index—the Dual-Innovation 50 ETF Huabao (588330) tracking index—which covers high-growth leaders from the ChiNext and STAR Market, pulled back 4.96% in line with the market, marking its fifth consecutive daily decline. It is currently below all moving averages and has retreated to levels seen in mid-April this year, highlighting its allocation value.

Among constituent stocks, United Imaging Healthcare led gains with a rise of over 3%, Mindray Medical climbed more than 2%, while AVIC Chengdu Aircraft, Inovance Technology, and Baili Tianheng closed higher against the trend. On the other hand, the "Yizhongtian" trio suffered heavy losses: Zhongji Innolight dropped over 9%, while T&S Communications and Eoptolink Technology fell more than 8%. PCB leader Victory Giant Technology declined over 8%, and Shengyi Electronics dropped more than 7%, ranking among the biggest decliners and dragging down the index performance.

Chart: Daily K-line trend of the Dual-Innovation 50 ETF Huabao (588330) tracking index

Why did optical modules plunge?

The sharp sell-off may stem from a confluence of three factors:

1. Overseas industrial policy expectations: Previously, the U.S. FCC was reported to be considering measures targeting Chinese optical modules, but the final rules were not aggressive. Recently, U.S. lawmakers proposed a new bill seeking to ban Chinese optical transceivers from entering U.S. national security systems, expanding restrictions from commercial data centers to critical government infrastructure. This has sparked concerns over the export outlook for optical modules.

2. Middle East geopolitical disruptions: The market had hoped for a phased de-escalation between the U.S. and Iran during the UN General Assembly high-level week (Sept. 22–28), but these expectations have now been dashed. The Strait of Hormuz blockade persists, crude oil prices are under upward pressure, and global risk appetite has contracted.

3. Liquidity pressures: U.S. Treasury yields have climbed to historically high levels, the China-U.S. interest rate differential remains inverted, the RMB exchange rate is under pressure, and concerns over foreign capital outflows are weighing on overall A-share risk appetite. Growth sectors such as optical modules and semiconductors, which are sensitive to overseas capital, are more vulnerable to shocks. Additionally, ahead of the National Day holiday, some funds chose to lock in gains, and rising risk-aversion sentiment amplified the sector's correction.

Market analysts pointed out that from a medium-term perspective, today's sharp decline is more of a concentrated release of sentiment rather than a systemic deterioration in fundamentals. Against the backdrop of strong AI computing demand and the optical communications industry's heavy reliance on a globalized ecosystem, these disruptions may prove to be "much ado about nothing." Pre-holiday risk aversion may keep the sector volatile in the near term, but as Q3 earnings materialize, 1.6T volume ramp-up progresses, and NPO customer validation advances, these could become key catalysts for a sector recovery. If no new worse-than-expected negative news emerges during the holiday, the market could see a technical rebound after the break.

Drawing on historical experience, Guosen Securities believes that the conditions for a second wave of tech sector rally may be gradually falling into place. If the oil price center continues to move lower, Fed tightening expectations ease, and overseas cloud providers' AI revenue growth continues to surge, the rebound potential could be considerable. With multiple positive factors converging, a tech sector rebound is expected to drive an overall market uptrend.

*[No fear of rotation, one-click access to China's top tech] The hard-tech broad-based Dual-Innovation 50 ETF Huabao (588330) and its off-exchange feeder funds (Class A: 013317, Class C: 013318) track an index that selects 50 strategically emerging industry listed companies with relatively large market caps from the STAR Market and ChiNext. It encompasses popular themes such as optical modules, semiconductors, and batteries, with heavyweight stocks including Eoptolink Technology, Zhongji Innolight, CATL, and Cambricon. With a 20% price limit, the ETF offers low-threshold access to capture the breakthrough potential of the dual-innovation track. It is also a margin trading and short selling plus Stock Connect eligible ETF, making it an efficient tool for one-click exposure to new quality productive forces.

Note: The Dual-Innovation 50 ETF Huabao (588330) was previously known on-exchange as the Dual-Innovation Leaders ETF. Source: Shanghai and Shenzhen Stock Exchanges, etc., as of Sept. 28, 2026.

Note: The individual stocks mentioned in this article are all constituent stocks of the Dual-Innovation 50 ETF Huabao (588330) tracking index. As of September 14, 2026, their weightings were: United Imaging Healthcare, 1.02%; Mindray Medical, 1.95%; AVIC Chengdu Aircraft, 0.36%; Inovance Technology, 2.05%; Baili Tianheng, 0.42%; Zhongji Innolight, 10.17%; T&S Communications, 3.39%; Eoptolink Technology, 10.08%; Victory Giant Technology, 2.77%; Shengyi Electronics, 0.83%. The index constituent stocks in this article are for illustrative purposes only. Individual stock descriptions do not constitute any form of investment advice and do not represent the holdings or trading activities of any fund managed by the manager.

*Institutional view reference source: Guosen Securities' September 27 report titled "Conditions for the Second Wave of Tech Sector Rally May Be Gradually Falling into Place."

ETF fee disclosure: ETFs do not charge sales service fees. Subscription and redemption agents may charge a commission of no more than 0.5%, which includes fees charged by stock exchanges and registration institutions. On-exchange trading fees are subject to actual charges by securities firms. Feeder fund fee disclosure: Huabao CSI STAR & ChiNext 50 ETF Initiating Feeder Fund (Class A) subscription fee is 1,000 yuan per transaction for subscription amounts of 2 million yuan (inclusive) or more, 0.6% for 1 million yuan (inclusive) to 2 million yuan, and 1% for amounts below 1 million yuan. Redemption fee is 1.5% for holding periods within 7 days, 0.1% for 7 days (inclusive) to 30 days, and 0% for 30 days (inclusive) or more. No sales service fee is charged. Huabao CSI STAR & ChiNext 50 ETF Initiating Feeder Fund (Class C) does not charge a subscription fee. Redemption fee is 1.5% for holding periods within 7 days and 0% for 7 days (inclusive) or more. Sales service fee is 0.3%.

Risk disclosure: The Dual-Innovation 50 ETF Huabao passively tracks the CSI STAR & ChiNext 50 Index. The index base date is Dec. 31, 2019, and it was launched on June 1, 2021. The constituent stock composition is adjusted according to the index compilation rules as appropriate. Its back-tested historical performance does not predict future index performance. The index constituent stocks mentioned in this article are for illustrative purposes only. Individual stock descriptions do not constitute any form of investment advice and do not represent the holdings or trading activities of any fund managed by the manager. The fund manager assesses the risk level of the Dual-Innovation 50 ETF Huabao as R4-Medium-High Risk, suitable for investors with an aggressive profile (C4) or above. Suitability matching opinions should be based on the sales institution's assessment. All 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 responsible for their own investment decisions. Additionally, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, nor shall they bear any responsibility for direct or indirect losses arising from the use of this content. Fund investment involves risks. Past performance of a fund does not guarantee future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest in funds with caution.

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