JPMorgan bullish on Chinese stocks: DeepSeek will bring value revaluation. These industries in particular will benefit.

After the emergence of DeepSeek, foreign enthusiasm for Chinese stocks has continued to rise in recent days. On Thursday this week, after several consecutive days of increase, the Hong Kong Hang Seng Tech Index rose more than 4% during trading hours, showing market confidence. Although the index fell towards the end of the day, in the eyes of the American asset management giant Schroders, the uptrend in Chinese stocks may not be over yet. All sectors in China will benefit Recently, Raymond Ma, Chief Investment Officer for Mainland China and Hong Kong at Schroders, stated in an article: "We believe that the benefits brought by DeepSeek, including higher efficiency, cost savings, powerful computing power, and a significant reduction in the threshold for various industries to use artificial intelligence, may benefit many listed companies in China, ultimately leading to a revaluation of Chinese stocks." He pointed out that the breakthrough of DeepSeek may benefit various sectors in the Chinese stock market, improving the productivity and income of many potential beneficiaries of artificial intelligence technology. He believes that the application of DeepSeek will further drive the development of businesses in sectors such as e-commerce, cloud services, AI smartphones, AI laptops, consumer electronics, semiconductors, and the automotive industry. In addition, China's strong autonomous driving technology and humanoid Siasun Robot & Automation technology will particularly benefit from the computing power improvement brought by AI technology progress. Current valuation will be an attractive entry point Raymond Ma believes that from a valuation perspective, Chinese stocks currently have a valuation of only 10 times PE, with a discount of 55% compared to the US stock market; Chinese technology stocks are discounted by 40% compared to US stocks. This indicates a significant room for growth. Compared to US stocks (light blue), Chinese stocks (dark blue) and Chinese technology stocks (deep purple) are significantly discounted in valuation When comparing Hong Kong stocks and A shares, he believes that from a valuation perspective, Hong Kong stocks are more attractive than A shares. Raymond Ma also mentioned that after the rise of DeepSeek, confidence in China's innovation capability has significantly increased in the market. He believes that considering the industries that can improve production efficiency and bring profit growth by using AI, there are reasons to reevaluate the valuation of Chinese stocks, especially for Chinese stocks listed in Hong Kong that are more attractive in valuation. As artificial intelligence continues to develop and be applied, their profit prospects may improve. In the conclusion of the article, Raymond Ma believes that with the improvement of China's economic prospects and the enterprise profit driven by the development of Chinese artificial intelligence, the current valuation level may become an attractive entry point for the Chinese stock market. Recently, several investment banks, including Morgan Stanley, J.P. Morgan, and UBS, expect Chinese stocks to continue to rise under the promotion of DeepSeek. UBS strategist even stated in a report on Wednesday (February 12) that: Based on the experience of the 4G, 5G, and cloud computing era, the road of Chinese stock increase driven by DeepSeek may not even be halfway done yet. This article is reprinted from "CaiLian News", translated by GMTEight editor: Li Fo.