Original Title: AI Investment Mirror: Institutions Race to Investigate and Debate, Bubble Fluctuates
Reporter Jiang Shiyi reports from Beijing
"We are actively seeking investment opportunities in 'AI + Finance' projects. The financial industry has complete data, quick feedback on results, a strong willingness to pay, and low psychological barriers for adoption, which makes AI applications develop faster here," said a partner at a private equity firm in Shanghai during an interview with 21st Century Business Herald on September 25.
Since artificial intelligence was mentioned in the government work report in March this year, the concept has taken off rapidly. The capital market has been even more excited by this emerging technology. Whether in the equity or securities markets, AI has captured the attention of investors across the board.
Institutional Research Intensifies
"From a sectoral perspective, AI is currently advancing in areas like visual recognition, which have broad applications. For example, it's widely used in security systems," Xiangyang, an AI analyst at the CCID Research Institute under the Ministry of Industry and Information Technology, told reporters from 21st Century Business Herald.
Looking at 34 AI-related companies listed on the A-share market, Hikvision (002415.SZ), which focuses on visual identity, leads in this year’s interim performance, reporting a net profit of 3.276 billion yuan, ranking second. Donghua Software (002065.SZ) saw its profits surge more than fivefold. This performance boom has made many AI-related stocks popular among institutional investors.
Taking Hikvision, a leading AI stock, as an example, interim data show that 431 funds hold the company. Among them, the East Hong Ruihua Shanghai Hong Kong Deep Mixed Fund holds the largest stake, with 18.7959 million shares, accounting for 0.2%. Compared to 122 funds in the first quarter, the number of open-end funds increased by 253%. Recent institutional investor survey data also reveal that 85 institutions conducted research on Hikvision between July 25 and September 8. Their focus includes AI product applications, growth sustainability, and other key issues.
According to incomplete statistics from 21st Century Business Herald reporters, since September alone, brokers such as Huarong, Huatai, and Changjiang have issued a total of 57 AI-related research reports, with keywords like “AI chips†and “autonomous driving†frequently appearing. "Besides AI chips, there are few companies involved in this field in China, so there is still room for development," said Xiangyang. In early September, Huawei announced the Kirin 970 chip at the IFA Berlin 2017, featuring the world's first mobile AI processor with a dedicated NPU. It was later launched on the Mate10 and significantly boosted market interest.
Bubble Debate
Although AI has become a hot topic in the investment world, there are differences in investment logic across institutions. "Currently, the difference in investment logic between the primary and secondary markets mainly lies in the evaluation stage of projects. In the secondary market, alternative targets are more certain, and industry judgment can be diluted. The focus is on the company itself, so the secondary market is more concerned about whether the company can create a higher market share in a highly deterministic environment and build a competitive moat," said a source from a Beijing-based private equity firm.
For the primary market, the same source added, capital tends to focus more on the company's future potential—whether it can create a new market.
"However, the driving factors behind this round of AI hype are still algorithm, computing power, and data. Investors screen projects based on these three criteria, so both top-tier and second-tier investors follow similar investment directions," the source added.
Reporters found that current preferences among equity investment institutions lean toward sectors like finance, healthcare, and transportation.
However, given that many AI companies are still in the early stages of development, there remains some uncertainty regarding their performance. As a result, many market voices openly point out that current AI investments may be showing a "bubble" trend.
"A bubble must exist, especially in the primary market. From an investment perspective, we can only say that the AI bubble isn't more obvious than in other industries because the current primary market environment is different from previous ones," said the Beijing official. "When we invest, we assess whether the bubble has reached an unacceptable level, but I don’t think it has yet."
Xiangyang also spoke frankly: "Relatively speaking, people may feel that the expected value exceeds actual output, but bubbles can actually help drive industrial development." (Editor: Ronald)
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