Following Shanghai's release of a significant software industry policy, the Software Development ETF (159036) is making a strong push for its 10th gain in 13 trading sessions, with its underlying index rising 14% since its post-listing low.
On August 12, the Software Development ETF Huabao (159036), which tracks AI application frontrunners, saw its intraday price climb as high as 0.92%, currently trading up 0.51%. This marks a powerful attempt to achieve 10 positive closes in 13 days. Its benchmark index has accumulated a gain of 14.34% since its post-listing low on July 27. Among the 107 constituent stocks, 83 are trading in positive territory, with 20 stocks rising over 2%. Notable movers include Westone, which surged by the 20% daily limit, Geer Software hitting the 10% limit, Haitian Ruishang gaining over 7%, and Sa Yi Information, Panwei Network, and Dingjie Digital Intelligence all rising more than 4%. (Data period: July 27, 2026 - August 11, 2026). The CSI All Share Software Development Index base date is December 31, 2021, with a release date of March 29, 2023. Its annual returns for 2022-2025 were -23.51%, 1.73%, 3.02%, and 15.22%, respectively, with annualized volatility of 30.49%, 32.75%, 45.88%, and 33.47% during the same period. Constituent stocks are adjusted periodically according to index compilation rules, and historical back-tested performance does not indicate future index returns.
On the news front, Shanghai released its "15th Five-Year Plan for the Development of the Software and Information Services Industry." The plan aims to transform Shanghai's software and information services industry into a "power source" for economic growth, a "primary front" for AI-enabled applications, and a "bridgehead" for global competition by 2030, targeting an industry scale of 4 trillion yuan. In the digital-intelligent transformation of the software sector, Shanghai will implement an "AI + Industrial Software" initiative involving 100 enterprises and 100 projects. It will promote a pay-per-use (SaaS) model for software and build pilot verification platforms for industrial software. The plan also encourages intelligent technological upgrades for software companies, supporting the widespread use of coding platforms to build intelligent R&D production lines covering the entire process and chain. It explores including investments in tokens, data governance, large model deployment, and retraining as part of corporate technological transformation support.
Notably, the Doubao platform has introduced a 12% commission for hotel recommendations. The software service fee for Doubao channel hotel orders is 11.4%, with an additional 0.6% payment processing fee, making the total rate 12%. Subsequently, a Doubao public relations representative responded that the Doubao lifestyle services business currently has no paid promotion, nor does it charge advertising fees for hotel recommendations. Merchants cannot influence recommendations or rankings through payment, and only a channel service fee is charged upon order completion.
CITIC Securities notes that while the global technology sector experienced a broad correction in July, the AI industry's fundamentals have not fundamentally changed, with no downward earnings per share (EPS) revisions. Looking ahead to August, the firm believes the tech sector is likely entering a phase of waiting for new narratives and a rebalancing between tech hardware and software. They suggest focusing on software sectors with favorable ownership structures, low valuations, and that are potentially oversold. The software industry is generally in an upward cycle, but which specific sub-sector or stock will outperform remains uncertain. Rather than betting on a single niche, the Software Development ETF Huabao (159036) covers the entire industry through its benchmark index, including 107 constituent stocks, offering a more comprehensive and balanced approach to capture the beta returns of industry development.
Data shows that the constituent stocks of the Software Development ETF Huabao (159036) encompass companies in AI+Finance, AI+Healthcare, AI+Office, AI+Education, AI+Information Security, and AI+Government Affairs. As of July 15, shares of AI application concept stocks account for 46.56% of the total weight. In terms of valuation, as of August 11, the price-to-earnings (P/E) ratio (TTM) of the Software Development Index stood at 174.62 times, which is lower than over 75% of the time periods since its listing, indicating high valuation cost-effectiveness and a strong safety margin.
From Hardware's End to Software's Spring
Looking at historical technological revolutions, profits have consistently flowed from hardware to applications. The end of hardware may signal the spring of software. Earlier this year, the narrative that "large models are devouring software" caused a stir, leading to significant valuation discounts in AI application sectors compared to computing power and model development. The software development sector has become a relatively "low water level" niche within the AI industry chain, offering high valuation cost-effectiveness and a strong safety margin. Combined with AI empowerment and the "Xinchuang" (domestic IT infrastructure) initiative, the software development sector is poised for a strong rise. The benchmark index of the Software Development ETF Huabao (159036), the Software Development Index, includes popular concepts. As of July 15, constituent stocks for AI applications, cloud computing, Xinchuang, fintech, cybersecurity, and the HarmonyOS ecosystem accounted for 46.56%, 41.02%, 39.26%, 33.08%, 15.05%, and 14.47% of the total weight, respectively.
ETF Fee Details: The Software Development ETF Huabao does not charge a sales service fee. When investors apply for or redeem fund shares, the entrusted broker may charge a commission at a rate not exceeding 0.3%. On-exchange trading fees are subject to actual charges by the securities company.
Risk Disclaimer: The Software Development ETF Huabao passively tracks the CSI All Share Software Development Index, which has a base date of December 31, 2021, and was released on March 29, 2023. The fund is issued and managed by Huabao Fund. Distributors are not responsible for the fund's investment and repayment obligations. Investors should carefully read the fund's legal documents, including the Fund Contract, Prospectus, and Fund Product Information Summary, to understand the fund's risk-return characteristics and choose a product that matches their risk tolerance. The fund manager assesses the fund's risk level as R3-Medium Risk, suitable for balanced (C3) investors and above. Please refer to the sales agency for the final suitability assessment. Sales agencies (including the fund manager's direct sales and other sales agencies) will conduct a risk assessment of the fund based on relevant laws and regulations. Investors should promptly review the suitability opinion issued by their sales agency and rely on its matching result. The suitability opinions of different sales agencies may not be consistent, and the risk rating of the fund product issued by the sales agency shall not be lower than the risk rating assessment made by the fund manager. The risk-return profile and risk rating of the fund may differ due to different considerations. Investors should understand the fund's risk-return profile, consider their own investment objectives, time horizon, investment experience, and risk tolerance, and carefully select fund products, bearing all risks themselves. The registration of the fund by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of its investment value, market prospects, or returns. Past performance and net asset value do not indicate future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Funds involve risks. Invest with caution!