On Tuesday, August 25, the fintech sector experienced a broad rally, with digital yuan concept stocks leading the gains. Among the notable movers, Chutian Dragon Co.,Ltd. hit the daily limit-up to secure its third consecutive gain, while Xinchen Technology surged over 16%, and Airong Software climbed more than 10%. Other stocks including Gu'ao Technology, Kelan Software, Digital Certification, and Eastcompeace all advanced by over 6%. The Fintech ETF Huabao (159851) saw significant volume expansion on the exchange, reflecting heightened market interest.
The rally was driven by news of continued expansion in the digital yuan ecosystem. Last week, the People's Bank of China announced the addition of eight new banks—Ping An Bank, Hengfeng Bank, Bohai Bank, Bank of Shanghai, Bank of Hangzhou, Huishang Bank, Bank of Changsha, and Bank of Guangxi Beibu Gulf—as bank-type digital yuan business operators, integrated into the central bank's digital yuan system. This brings the total number of digital yuan business operators from 22 to 30, marking a significant milestone for the sector.
From an investment perspective, the integration of more banks into the central bank's system is expected to accelerate the large-scale deployment of digital yuan across retail payments, corporate settlements, and government service scenarios. This expansion will generate substantial demand for system upgrades, hardware enhancements, and security encryption solutions—a milestone that directly broadens the business scope for fintech enterprises and creates clear incremental market opportunities for core financial IT service providers along the supply chain.
Assessing the fintech sector as a whole, Guotai Haitong Securities notes that the trend of AI+finance adoption remains intact, with short-term pullbacks presenting buying opportunities. As AI agents penetrate various industries and gradually become the infrastructure of the real world, the fintech industry is advancing toward a new phase of intelligent development with vast growth potential, opening fresh investment prospects and highlighting core beneficiary companies across different sub-sectors.
From a valuation standpoint, as of August 25, 2026, the fintech index has retreated over 39% from its peak on August 25, 2025, suggesting that the technical correction has been relatively thorough. The index's dynamic price-to-earnings ratio stands at 43 times, positioning it at the 13th percentile over the past three years—a level that has fallen back to historical lows for the period. Against the backdrop of fundamental recovery expectations combined with high liquidity, the sector's high-beta characteristics may enhance its cost-performance attractiveness for portfolio allocation.
For investors seeking exposure, the Fintech ETF Huabao (159851) and its feeder funds (Class A: 013477, Class C: 013478) track an index heavily weighted in computer and non-bank financial stocks, covering popular themes such as internet brokerages, financial IT, cross-border payments, and AI applications, offering a blend of financial cycle and technology growth attributes.
Risk disclosure: The Fintech ETF passively tracks the CSI Fintech Theme Index, with a base date of June 30, 2014, and a publication date of June 22, 2017. The index's annual historical returns from 2021 to 2025 were 7.16%, -21.40%, 10.03%, 31.54%, and 18.04%, respectively, with corresponding annualized volatility of 24.92%, 29.41%, 27.07%, 53.47%, and 34.54%. Index constituent stocks are adjusted according to the index methodology, and historical backtest performance does not indicate future index returns. Index constituents displayed in this article are for illustrative purposes only, and descriptions of individual stocks do not constitute investment advice of any form, nor do they represent holdings or trading activities of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R3-medium risk, suitable for balanced (C3) and above investors. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are 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, and the author bears no responsibility for any direct or indirect losses arising from the use of this content. Fund investment involves risks; past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Please invest cautiously.