The Sci-Tech Innovation 50 index surged 4%, with nearly 2.5 billion yuan in funds accumulated for bottom-fishing over the past 20 trading days!

In response to the “two-week ceasefire” development, the A-share market opened higher and then trended higher through early trading. The STAR Market 50 Index surged by 4%. All 50 held stocks were up, including Goertek Precision Electronics, Tech Drive, Shengke Communications, and Shengyi Electronics, each rising more than 6%.

From the perspective of recent capital flows, over the past 20 trading days, capital inflows into the Huaxia STAR Market 50 ETF (588000) totaled RMB 2.45 billion.

After nearly two months of deep pullbacks, this index, which aggregates the top 50 companies on the STAR Market, is now showing relatively high value-for-money in terms of allocation.

1. Thorough adjustment and relatively complete risk release

Since the end of January, the STAR Market 50 Index has been in a downward channel for seven consecutive weeks. It has fallen from the high of 1,575.45 points to around 1,249.01 points, with the maximum drawdown reaching 20.72%. The magnitude of the adjustment ranks among the top in major A-share indices. At the same time, based on the moving average position, the index’s lowest pullback has reached the 45-week moving average that supports the uptrend since the “924” level. Such a deep correction provides an even better entry opportunity for off-market funds.

2. Valuation reset and a gradually improving margin of safety

Following this round of adjustment, the valuation level of the STAR Market 50 Index has gradually retreated from historical highs. According to data on earnings forecasts from iFinD Tonghuashun, the STAR Market 50 Index’s 2026 operating revenue is expected to grow 21.68% year over year. Compared with -1.28% in 2025, it turns from negative to positive. For net profit attributable to shareholders, growth is expected to rise from 28.16% in 2025 to 98.27%. On the profit side, there has been a significant improvement. Given the high growth profile of its constituent stocks, the match between valuation and growth is improving.

3. Clear technology main theme, with industry trends providing support

Among the constituent stocks of the STAR Market 50 Index, semiconductor companies account for nearly 70%, clearly reflecting the technology characteristics concentrated in A shares. Recently, domestic AI chip performance has leaped forward, major domestic technology companies have begun bulk procurement, and combined with the rapid growth in AI inference demand, domestic AI chips and semiconductor equipment materials segments are expected to maintain high levels of business momentum. The continued expansion of chip demand is expected to help lift analysts’ earnings expectations for the semiconductor sector, providing fundamental support for the semiconductor segment within the STAR Market 50 Index. As the disclosure window for Q1 reports approaches, the market’s verification of technology stocks’ performance will determine the subsequent trend, and the current pullback is an important window for positioning high-quality technology leaders.

Related ETFs:

Huaxia STAR Market 50 ETF 588000

The Daily Economic News

(Editor in charge: Zhang Xiaobo)

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