It's the right time for Chinese concept stocks to rebound! Global funds are pouring in. Has the era of Chinese concept stocks arrived?

Recently, a lot of capital in the market has started to speculate on Chinese-concept stocks.

 

With the sudden emergence of DeepSeek, market observers believe that overseas investors are re-examining Chinese Internet companies, re-envisioning their potential to leverage artificial intelligence, and may be re-thinking their valuations.

 

Goldman Sachs stated in its latest research report that global hedge funds have been significantly buying Chinese stocks for most of this year.

 

With the formation of the "DeepSeek consensus" in the global capital market, the capital inflow last week even showed a blowout.

 

Goldman Sachs pointed out that data as of last Friday (February 7) showed that in Goldman Sachs' global prime brokerage (PB) business, on-shore and off-shore Chinese stocks combined have become the market with the largest "nominal net buying volume" this year.

 

Why the sharp rise? What are the remaining investment opportunities and what is the future of Chinese-concept stocks? We will analyze them one by one.

 

We still have to get back to talking about DeepSeek.

 

Earlier, Deutsche Bank issued a report saying that the "valuation discount" of Chinese stocks this year will disappear, and it is believed that the performance of Chinese assets this year will outperform other regions.

 

The reason is the advantage of China's manufacturing industry, and the launch of Deepseek is regarded as a "Sputnik moment".

 

Sputnik was the first artificial earth satellite developed and launched by the Soviet Union.

 

I'm not sure if this can be regarded as an inflection point. However, with the influx of global capital, the MSCI China Index has risen for 4 consecutive weeks since mid-January, and the increase since February has reached 6%.

 

From a fundamental perspective, DeepSeek's breakthrough low-cost AI model is the catalyst for this round of "re-evaluation of Chinese assets" by global investors. This time coincides with investors' growing anxiety about the high valuations and declining growth rates of US technology giants.

 

 

Moreover, due to the efficiency and open-source nature of DeepSeek's large AI model, a large number of Chinese companies have been able to "quickly access DeepSeek", which has also made the hype spread rapidly.

 

Take two latest examples. Zhihu, which is listed in both Hong Kong and the US, saw its US-listed stock rise by more than 15% on Monday because its AI search product Zhihu Direct Answer accessed the R1 model.

At first, people thought that its close relationship with Xiaomi would greatly benefit it in Deepseek, and they began to lay in wait. We also made relevant reports.

 

On February 8, Kingsoft Cloud announced full support for DeepSeek-R1/V3 in public cloud and state-owned cloud/government cloud scenarios, further expanding its service capabilities in high-performance large-language model inference and fine-tuning tasks.

 

 

After Deepseek became popular, an important view in the current market is that it may be the entire Chinese assets that need to be re-evaluated.

 

A few days after the release of DeepSeek, Alibaba announced its latest version of the artificial intelligence model, which pushed the company's Hong Kong-listed stock to rise by 13% last week.

 

In addition, overseas investors are more concerned that the AI wave set off by DeepSeek may accelerate the adoption of artificial intelligence by enterprises and consumers, and also reduce the costs of hyperscale enterprises.

 

 

Alex Au of Cliff Investment said: "The cheaper and more powerful models launched by DeepSeek should help the popularization of artificial intelligence in China and encourage usage and spending... We believe that cloud operators like Alibaba will be the main beneficiaries."

 

 

If you are still hesitating about which Chinese-concept stocks to buy, it is advisable to lean towards cloud service providers as much as possible.

 

 

 

Leaving aside whether the domestic fundamentals in China have improved, just from the perspective of the capital side, it is an established fact that the world is vying to invest in Chinese assets.

 

Although the US "Decoupling Act" threatens Sino-US technology investment (such as restricting US capital investment in the AI field of Chinese enterprises).

 

However, it also forces China to accelerate the R & D of core technologies.

 

In fact, Trump's tariff policies, global inflation, and changes in the interest-rate cut rhythm of the Federal Reserve may all impact the Chinese-concept stocks.

 

 

One more thing, according to the data I have obtained, many investment banks predict that the IPO scale of Chinese-concept stocks is expected to exceed the $5 billion mark in 2025, and more technology-based enterprises with global influence may be born.