Market Performance - The Sci-Tech 50 Index decreased by 1.47% over the last five trading days, while the ChiNext Index fell by 0.88%. In contrast, the large-cap value stocks rose by 0.48%, and the large-cap growth stocks declined by 0.40% [1] - The medical and biological sectors performed well, while the computer and machinery equipment sectors lagged behind [1] Risk Premium Analysis - The static PE of the CSI All Share Index minus the yield of 10-year government bonds indicates a risk premium. Historical extreme bottoms have shown this data to be at two standard deviations above the mean, with recent peaks at 4.17% on April 26, 2022, and 4.11% on January 19, 2024. As of May 23, 2025, the indicator stands at 3.84%, with the two standard deviation boundary at 4.76% [1] Valuation Levels - As of May 23, 2025, the CSI All Share Index's TTM PE is at the 51st percentile, with the SSE 50 and CSI 300 at 62% and 49%, respectively. The ChiNext Index is close to 11%, indicating a relatively low valuation level compared to historical averages [2] Long-term Market Trends - The Shenzhen 100 Index has experienced bear markets approximately every three years, followed by bull markets. The current adjustment, which began in Q1 2021, has shown sufficient time and space for a potential upward cycle [2] Fund Flow and Trading Activity - In the last five trading days, ETF funds saw an outflow of 24 billion yuan, while margin financing decreased by approximately 20 million yuan. The average daily trading volume across both markets was 1.1376 trillion yuan [3] AI and Machine Learning Applications - A convolutional neural network (CNN) has been utilized to model price and volume data, mapping learned features to industry themes. The latest focus is on sectors such as banking and dividends [2][10]

Core Viewpoint - The departure of Zhang Hongtao, known as the "ETF King" of Huaxia Fund, marks a significant shift for the company, which has lost its leadership in managing public funds and faces challenges in both passive and active investment sectors [3][7][14]. Group 1: Departure of Key Personnel - Zhang Hongtao resigned as the manager of Huaxia CSI Dividend Quality ETF and its linked fund, leaving the company without any managed public products [3][5]. - His career at Huaxia Fund spanned over 15 years, during which he managed multiple public products, including large ETFs, and achieved a peak asset management scale of 456.14 billion [8][9]. - The exit of Zhang highlights a talent shortage at Huaxia Fund, raising concerns about the stability of its investment research team [11][12]. Group 2: Business Challenges - Huaxia Fund's revenue for the year reached 8.03 billion, a year-on-year increase of 9.61%, but this growth is primarily driven by passive investment expansion [14]. - The ETF market has become highly competitive, with Huaxia Fund facing challenges from other leading firms like E Fund and Huatai-PB, which are rapidly increasing their ETF asset scales [15][16]. - In 2024, Huaxia Fund's ETF asset scale was approximately 6587.82 billion, while E Fund's was over 6025.55 billion, indicating a narrowing gap in market leadership [16]. Group 3: Performance Issues - Huaxia Fund's active equity products have underperformed, with an average return of -18.72% in 2024, significantly lower than the average of -8.56% for similar funds [18]. - The management scale of Huaxia Fund's active equity products has shrunk by over 130 billion from its peak, indicating a loss of investor confidence [18][20]. - The company has faced scrutiny over compliance issues, including misleading marketing claims, which have further impacted its reputation and operational stability [22]. Group 4: Internal Management Concerns - Recent scandals, including the "mouse warehouse" incident, have raised questions about Huaxia Fund's internal controls and monitoring of trading behaviors [20][22]. - The company has been penalized for compliance failures, leading to a suspension of specific asset management services, which has adversely affected its active equity product scale [20][22]. - Huaxia Fund's ability to handle investor complaints and compensation mechanisms remains untested, particularly in light of significant fund losses [22].