ChiNext Index: Weighting, Structure and Volatility

A Market-Capitalisation-Weighted Measure of Shenzhen’s Growth Board

The ChiNext Index was launched by the Shenzhen Stock Exchange on 1 June 2010 under the code 399006, with a base value of 1,000 points. Its constituents comprise the 100 largest companies by market capitalisation listed on the ChiNext Market, and the index is calculated using free-float market-capitalisation weighting. It is designed to reflect the overall price performance of the ChiNext Market, with constituents concentrated in industries characterised by high research and development expenditure and strong growth expectations.

How It Differs from Other Broad-Based Indices

Several broad-based indices operate in parallel in the market, but they differ significantly in constituent sources, sector composition and volatility characteristics. Using them interchangeably may lead to a misreading of market structure.

Sixteen Years of Change in the Constituent Structure

Changes in the List of Largest Constituents

Index constituents are not fixed, and the sector composition changes continuously with industrial cycles. According to Wind data, on 5 June 2015, the ten largest constituents of the ChiNext Index were East Money Information, LeTV, Siasun Robot & Automation, Wonders Information, Huayi Brothers, OriginWater, Wangsu Science & Technology, Winning Health Technology, Inovance Technology and BlueFocus Intelligent Communications, with a combined weighting of 29.69%. Eleven years later, the ten largest constituents were Contemporary Amperex Technology, Zhongji Innolight, Eoptolink Technology, East Money Information, Sungrow Power Supply, Victory Giant Technology, TFC Optical Communication, Inovance Technology, Chaozhou Three-Circle and Mindray Bio-Medical Electronics, with a combined weighting of 57.44%.

More than a decade of change in the ChiNext Index’s constituents reflects a reshaping of the economic structure and the forces driving growth.

Chuancai Securities noted that ChiNext market leaders in 2015 were primarily asset-light companies in sectors such as internet services, media and entertainment, and software services. The ten largest constituents have since shifted towards new energy, AI computing-power communications, advanced equipment manufacturing and biomedicine. The weighting of leading companies has risen markedly, while sector clustering has strengthened substantially.

(Source: Economic Information Daily, ChiNext Index Reaches a Record High, published: 2026-05-14)

Three Stages in the Evolution of Leading Sectors

1. From 2018 to 2021, the new-energy sector rose to prominence. Companies such as Contemporary Amperex Technology and Sungrow Power Supply benefited from the expansion of electric vehicles and photovoltaic energy, becoming core index constituents during this period.

2. From 2022 to 2024, industrial automation and advanced manufacturing were upgraded. Companies including Inovance Technology and Lens Technology achieved market-capitalisation growth by benefiting from domestic substitution opportunities.

3. From 2024 to the present, the AI computing-power supply chain has expanded rapidly. Optical module and optical component companies such as Zhongji Innolight, Eoptolink Technology and TFC Optical Communication have become major sources of market-capitalisation growth.

By 2026, among the sectors represented by the ten largest constituents of the ChiNext Index, the AI computing-power supply chain, including optical modules and printed circuit boards, accounted for four companies, the new-energy sector accounted for two, and only one internet finance company remained.

Current Weighting and Sector Distribution

In terms of weighting, the ten largest constituents account for 57.17% of the index and represent seven industries. The three largest constituents are Contemporary Amperex Technology at 19.72%, Zhongji Innolight at 9.32% and Eoptolink Technology at 7.54%. Compared with five years earlier, Contemporary Amperex Technology remains the largest constituent, with its weighting increasing from 15.75% to 19.72%.

Across all 100 constituents, the five largest sectors by weighting are electrical equipment, communications, electronics, pharmaceuticals and biotechnology, and computers, accounting for 32.05%, 22.33%, 15.58%, 7.15% and 5.01% respectively, or a combined 82.12%. Five years earlier, the five largest sectors were pharmaceuticals and biotechnology at 30.50%, electrical equipment at 28.3%, electronics at 10.06%, non-bank financial services at 7.19% and computers at 5.90%.

(Source: Eastmoney, ChiNext Index Reaches a Nearly Five-Year Intraday High: Overview of Its Largest Constituents, published: 2026-04-10)

Index-Level Movements in the First Half of 2026

The index recently broke through a previous record high before experiencing a significant correction. The full sequence was as follows:

1. Preparation for the breakout: On 13 May 2026, the index closed at 4,038.33 points, exceeding the previous record closing high of 4,037.96 points set on 5 June 2015.

2. New record: On 25 June 2026, the ChiNext Index closed at 4,380.41 points, rising by 2.84% and formally surpassing a record that had stood for nearly eleven years. By the end of June, the index had gained more than 100% over the preceding year.

3. Half-year performance: The ChiNext Index gained more than 35% during the first half of 2026, while the STAR 50 Index rose by more than 64%. In June alone, the ChiNext Index gained 7.55%, the STAR 50 Index rose by 26.07%, the Shanghai Composite Index increased by 0.63% and the CSI 300 advanced by 1.78%.

4. Sharp correction: On 2 July, China’s three major A-share indices opened substantially lower and weakened throughout the session. The ChiNext Index closed down 5.71% at 4,017.27 points, its largest one-day decline since 7 April 2025. On the same day, the Shanghai Composite Index fell by 2.03% to 4,028.90 points and the STAR 50 Index declined by 7.7%.

5. Continued adjustment: From the beginning of July to 7 July, the ChiNext Index declined by a cumulative 9.92%. It fell by a further 0.94% on 7 July.

(Source: Sina Finance, ChiNext Index Plunges 5.71% in Its Largest Decline for More Than a Year: What Happened?, published: 2026-07-02)

External Triggers Behind the July Correction

The decline was linked to a simultaneous correction in overseas technology sectors. During overnight US trading ahead of 2 July, technology shares diverged sharply, with the Philadelphia Semiconductor Index falling by more than 6% in a single session. Japanese and South Korean markets also declined substantially on the same day. South Korea’s KOSPI closed down by more than 7%, while SK Hynix fell by 14.57%, its largest one-day decline since 20 November 2008. In China, most of the 31 first-tier Shenwan industry sectors declined. Communications, electronics and building materials recorded the largest falls, declining by 7.36%, 7.15% and 3.30% respectively. Total A-share turnover was approximately RMB3.47 trillion, more than RMB208 billion lower than on the previous trading day.

Structural Causes Behind the Index’s Volatility

Amplified Exposure Caused by Weight Concentration

• Influence of a single market leader: The largest constituent accounts for nearly 20% of the index, giving its share-price movements a much greater transmission effect than in a more diversified index.

• Sector concentration: Electrical equipment and communications together account for more than 54% of the index, closely linking its performance to conditions in these two industrial supply chains.

• Higher correlations: The AI computing-power supply chain accounts for four of the ten largest constituents. Their share-price movements are correlated, meaning the diversification effect is weaker than the nominal number of holdings might suggest.

• Cross-market linkages: The sectors represented by index constituents are influenced by the pricing of comparable overseas assets. Corrections in foreign technology markets can therefore be transmitted through both investor sentiment and capital flows.

How to Interpret Valuation Percentiles

The historical valuation percentile of an index can be expressed as follows:

Historical valuation percentile = Number of trading days when the historical valuation was below the current valuation ÷ Total number of trading days in the observation period × 100%

At the current level, some fund managers have noted that the ChiNext Index’s five-year percentiles are below 80% for both the price-to-earnings ratio and the price-to-book ratio, while its ten-year percentiles are below 69%. Using the forward price-to-earnings ratio, the five-year percentile is approximately 61.18%. Under this methodology, the valuation is below one standard deviation above its historical midpoint, while its historical percentile is also lower than those of broad-based indices such as the CSI 300, CSI 500 and CSI 1000.

It should be noted that a valuation percentile indicates the current level’s relative position within a historical range and does not predict future market direction. A lower percentile means that valuations were higher during most of the historical period, but the historical range may not be fully comparable because the sector composition of the constituents has changed.

Risk Areas Identified by Institutions

• The extent to which interim financial results differ from earlier expectations, with July and August forming the main reporting window.

• Changes in expectations for overseas technology-sector capacity, which directly affect order visibility across related domestic supply chains.

• Short-term trading congestion in specific sectors, which may amplify corrections when market sentiment reverses.

• The diversion of existing market liquidity caused by the pace of new share issuance.

(Source: Sina Finance, ChiNext Index Fluctuates at High Levels: How Much Further Can the Growth-Sector Rally Run?, published: 2026-07-07)

Questions About the ChiNext Index