Goldman Sachs: Global hedge funds' net purchases of Chinese assets last week hit a four-month high.

Goldman Sachs stated in its latest research report that global hedge funds have been buying Chinese stocks in large quantities for most of this year. With the formation of a "DeepSeek consensus" in global capital markets, there has been a surge in fund inflows in the past week. Goldman Sachs pointed out that as of last Friday (February 7th), the data showed that China's onshore and offshore stocks combined have become the "largest nominal net buying market" this year in Goldman's global prime brokerage (PB) business. The prime brokerage business of investment banks provides leverage to hedge funds and observes their trading flows. It is worth mentioning that in the week from February 3rd to February 7th, there was the strongest wave of hedge funds buying Chinese assets in over four months. With the influx of global funds, the MSCI China Index has risen for four consecutive weeks since mid-January, with a gain of 6% in February, significantly outperforming markets such as the United States and Japan. The Hang Seng Tech Index, which includes Chinese tech stocks like Alibaba, has surged over 24% since its January low point, with a 9% increase just last week. Goldman Sachs introduced that last week, 95% of the buying was concentrated at the individual stock level, mainly led by the consumer goods, information technology, industrial, and communication services industries. During this period, hedge funds also sold energy, utilities, and real estate stocks. From a fundamental perspective, DeepSeek's groundbreaking low-cost AI model has been the catalyst for global investors to "reassess Chinese assets" in this round. At this time point, investors have long been anxious about the overvaluation and slowing growth of US tech giants. Moreover, due to the efficiency and open-source nature of DeepSeek's AI large model, a large number of Chinese companies have been able to "quickly access DeepSeek," leading to the rapid spread of speculation. For example, Zhihu, which is listed in both Hong Kong and the US, saw its stock price rise nearly 14% on Tuesday because its AI search product Zhihu Direct Answer has accessed the R1 model. With this recent wave of increased holdings, Chinese stocks accounted for 7.6% of the exposure of hedge funds in Goldman's prime brokerage business, reaching the 23rd percentile in the past five years, an increase from around the 10th percentile in January. Regarding this round of "reassessment of Chinese assets," Standard & Poor's Global Ratings stated that DeepSeek's introduction of large language models is disrupting market expectations for the cost of AI, shifting the "arms race" that enterprises originally needed to spend billions of dollars purchasing NVIDIA high-end chips into a more balanced competition, which will prompt Chinese internet companies to quickly integrate powerful and cost-effective AI models. Standard & Poor's also mentioned that this event reflects that China's existing AI infrastructure can develop leading large models. DeepSeek's new method of training AI could significantly reduce the computational demands for training or inference, allowing the Chinese tech industry to build competitive models with lower-tier chips and also drive Chinese chip manufacturers to produce more competitive products. This article was reprinted from "Cai Lianshe," GMTEight editor: Jiang Yuanhua.