Optical communication breaks through against the trend! Guangku Technology soars to a new high, "Yi Zhongtian" collectively surges! Huabao Fund's ChiNext Artificial Intelligence ETF (159363) increases by 1% on high volume.

Friday (April 3), China’s ChiNext AI sector rose against the trend. Light module and optical fiber concepts, among others, showed active performance. Guangku Technology surged by more than 11% to a new high again. “Yi Zhongtian” was collectively pulled up; JiZhong Chuang and ZH-JI Zhong Ke rose more than 4%; Tianfu Communications rose more than 3%; Xin Yisheng rose more than 1%.

As for popular ETFs, the China’s ChiNext AI ETF Huabao (159363), with the same category’s scale and top liquidity, broke through against the trend and closed up 1.06%. Trading volume exceeded 700 million yuan, with capital adding more than 100 million yuan over the past five days. With market volatility, next week’s weekly line is set to notch a four-day consecutive gain!

On the news front, the prices of optical fiber and optical cable products have repeatedly hit new highs. The spot price of mainstream G.652D standard single-mode optical fiber has already broken through 105 yuan per core-kilometer, with a cumulative rise of over 425%. Premiums for high-end products have become evident. The price of G.654.E special optical fiber adapted for AI computing infrastructure has even risen to 240—260 yuan per core-kilometer, while advanced hollow-core optical fiber has risen to 25k—50k yuan per core-kilometer. Overall, the optical fiber and optical cable market is showing a trend of “rising both volume and prices.”

The increase in optical fiber and optical cable prices is directly related to the surge in demand for optical modules. Large-scale deployment of 800G/1.6T high-speed optical modules in AI data centers requires optical fiber with lower loss and higher bandwidth to ensure link budgets and signal quality, forcing optical fiber to upgrade from G.652D to G.654E. Optical modules and optical fiber have a tightly coupled relationship across the transmitter/receiver end and the transmission medium— the higher the optical module rate, the more stringent the requirements for optical fiber performance, and the larger the premium space for high-end optical fiber.

Looking ahead, Minsheng Securities stated that AI-driven optical module demand is quickly expanding. With the rapid development of AI, demand for compute power is increasing sharply across industries. As a smart computing center that serves as dedicated high-power and high-bandwidth GPU cluster infrastructure, demand for high-rate optical modules continues to rise. In the future, domestic optical module equipment companies are expected to benefit from both industry growth and share gains, in a double boost.

To seize AI computing power opportunities, it is recommended to focus on the China’s ChiNext AI ETF (159363) that primarily invests in optical module leaders, as well as the over-the-counter linked fund (Class A 023407, Class C 023408). They directly benefit from the growth dividends of the commercialization explosion of AI technology. From the track perspective, China’s ChiNext AI has roughly 70% of its portfolio allocated to compute power (optical module/CPO leading companies) and about 30% allocated to AI applications. This is not only the core of “compute power,” but also a true representation of “AI applications.”

Data source: Shanghai and Shenzhen stock exchanges, etc.

*Institutional viewpoint reference: Source: Minsheng Securities “AI compute-power-driven optical module demand surge; domestic equipment faces major opportunities”

Expense details for ETF fund-related items: When investors subscribe to or redeem fund shares, the subscription and redemption agent may charge a commission of up to 0.5% in accordance with the standard. In-market transaction fees are based on what the securities firm actually charges, and no sales service fee is charged.

Expense details for linked fund-related items: China’s ChiNext AI ETF initiating-linked C does not charge a subscription fee for subscriptions; redemption fee is 1.5% within 7 days, and 0% for 7 days (inclusive) or more. Sales service fee is 0.3%. China’s ChiNext AI ETF initiating-linked A subscription fee is 1% for amounts below 1 million yuan; 0.6% for 1 million yuan (inclusive) to 2 million yuan; 1,000 yuan per order for amounts of 2 million yuan (inclusive) or more; redemption fee is 1.5% within 7 days, and 0% for 7 days (inclusive) or more; no sales service fee is charged.

Risk warning: China’s ChiNext AI ETF Huabao passively tracks the China’s ChiNext AI Index. The index base date is 2018.12.28, and the publication date is 2024.7.11. The annual total return/decline of the China’s ChiNext AI Index for 2021-2025 is: 17.57%, -34.52%, 47.83%, 38.44%, and 106.35%, respectively. The composition of index constituent stocks is adjusted from time to time according to the index compilation rules; its backtested historical performance does not predict future performance of the index. The index constituent stocks mentioned in the article are for display purposes only. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings information and trading directions of any fund under the management of the manager. The risk level of this fund assessed by the fund manager is R4—medium to high risk. It is suitable for investors with an active risk profile (C4) and above. For suitability matching opinions, please refer to the sales institution. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any forms of statements, etc.) is for reference only. Investors are responsible for any investment actions they make independently. Also, any viewpoints, analyses, and forecasts in this article do not constitute any form of investment advice to readers, nor do they bear any responsibility for any direct or indirect losses arising from the use of this article’s content. Investing in funds involves risk. Past performance of the fund does not indicate future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund’s performance. Investors should invest cautiously.

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Responsible editor: Yang Hongbo