DeepSeek's fire ignites global capital buying into undervalued Chinese tech stocks.

This week, a DeepSeek frenzy has ignited the capital market. Technology stocks represented by Lenovo (00992) and Alibaba (09988) have seen their stock prices rise, fueling market optimism. Domestic and foreign brokerages have issued positive bullish signals. Data shows that the Hang Seng Tech Index rose by 1.8% on Friday, with an accumulated increase of over 20% from its low point in January. Component stocks such as LENOVO GROUP have seen a rise of over 30% during this period, while Alibaba Group's rise is nearly 14%. Both companies are considered true beneficiaries of the development of artificial intelligence. Bloomberg's latest article praises Chinese startup DeepSeek's artificial intelligence model as a disruptor in the tech industry, highlighting China's innovative capabilities and positioning it as a strong challenger in the global AI leadership field. Wall Street analysts are upbeat, believing that with the index breaking through previous highs due to manufacturing strength and technological capabilities, China's "discount" phenomenon will disappear. Bloomberg strategist Marvin Chen wrote in a report that with mainland investors buying into Hong Kong-listed tech stocks and the trend likely to continue due to the tailwind from AI, favorable valuations are helping reinforce this optimistic sentiment. According to Bloomberg data, the Hang Seng Tech Index's expected P/E ratio is 17 times, while the Nasdaq 100 Index is at 27 times. This has also prompted a reassessment of undervalued Chinese stocks such as LENOVO GROUP and Alibaba Group. "This is an overlooked area, but like other purely domestic areas, there are also some bright spots," said Sat Duhra, portfolio manager at Singapore's Janus Henderson Investors. "Recent announcements from DeepSeek timely remind us that 'China has propelled many areas to world-class levels.'" Deutsche Bank analyst Peter Milliken wrote in a report titled "China Eats the World," released on February 5, that "2025 will be the year when the investment community realizes that China is surpassing other countries around the world." This report quickly went viral on Chinese internet search engines, with the local investment community appreciating the positive comments. "We believe that investors will have to significantly shift toward China in the medium term, and it will be difficult to acquire Chinese stocks without paying a premium. Investors will soon flock to the Chinese market," Milliken wrote. HSBC also stated that as foreign funds flow in due to increasing recognition of China's technological capabilities, the valuation gap between China and emerging markets may narrow.