We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Recent developments highlight how Chinese companies, including DeepSeek and ByteDance, are advancing rapidly in artificial intelligence (AI), building competitive alternatives to OpenAI’s ChatGPT. These efforts are moving beyond chatbots to make innovative applications for businesses and consumers.
The adoption of generative AI among Chinese businesses is growing, with over 10% now using the technology, up from 8% six months ago, according to Ben Yan, a director analyst at Gartner, as quoted on CNBC.
Baidu’s AI-Integrated Tools See Growth
Baidu (BIDU - Free Report) , known for its search engine and Ernie chatbot, reported notable traction with its AI-integrated Wenku platform, which enables users to generate PowerPoint presentations and other documents quickly. As of 2023, the platform had 40 million paying users, contributing to a 60% year-over-year revenue increase.
Tencent's AI Agent Plans for WeChat
TencentTCEHY is preparing to integrate AI agents into WeChat, its popular messaging and social media app. CEO Pony Ma revealed the plans during a Jan. 13 address, indicating a push into AI-driven automation and user interaction.
AI Applications for Global Markets
Chinese AI applications are also making global entries. For example, Alibaba's Accio, an AI-powered search engine for product sourcing, has attracted 500,000 small business users globally.
Some Chinese Tech Stocks Offer Value
Chinese technology stocks are now value stocks: They are favoring dividends and buybacks lately.
Alibaba’s (BABA) P/B (Most Recent Quarter or MRQ) is 1.45X versus the underlying Internet - Commerce industry’s P/B of 1.81X. Price/Cash Flow (Most Recent Fiscal Year or MRFY) is 8.51X versus the industry measure of 16.69X.
Baidu’s P/B is 0.81X versus the underlying Internet – Services industry’s P/B of 2.01X. Price/Cash Flow (Most Recent Fiscal Year or MRFY) is 4.96X versus the industry measure of 12.35X. This year, both Alibaba and Baidu are experiencing a slower growth rate compared to the industries they operate in.
Meanwhile, Tencent is different as it has a higher growth rate than the underlying Internet – Services industry as well as the S&P 500. Investors are also rewarding the stock with higher price premiums as the stock has higher P/E, P/B and P/CF than the industries.
Any Weaknesses?
Despite the potential for growth, there are inherent weaknesses in the space. The tech sector's reliance on government policies and the ongoing geopolitical landscape pose risks to the stability of investments. Plus, most Chinese tech companies’ growth rates are below their underlying operating industries.
China Tech ETFs in Focus
China tech-based exchange-traded funds (ETFs) like KraneShares Hang Seng TECH Index ETF (KTEC - Free Report) , Invesco China Technology ETF (CQQQ - Free Report) , KraneShares CSI China Internet ETF (KWEB - Free Report) and iShares MSCI China Multisector Tech ETF (TCHI - Free Report) have added 7.4%, 5.6%, 7.3% and 6%, so far this year, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time for China Tech ETFs?
Recent developments highlight how Chinese companies, including DeepSeek and ByteDance, are advancing rapidly in artificial intelligence (AI), building competitive alternatives to OpenAI’s ChatGPT. These efforts are moving beyond chatbots to make innovative applications for businesses and consumers.
The adoption of generative AI among Chinese businesses is growing, with over 10% now using the technology, up from 8% six months ago, according to Ben Yan, a director analyst at Gartner, as quoted on CNBC.
Baidu’s AI-Integrated Tools See Growth
Baidu (BIDU - Free Report) , known for its search engine and Ernie chatbot, reported notable traction with its AI-integrated Wenku platform, which enables users to generate PowerPoint presentations and other documents quickly. As of 2023, the platform had 40 million paying users, contributing to a 60% year-over-year revenue increase.
Tencent's AI Agent Plans for WeChat
Tencent TCEHY is preparing to integrate AI agents into WeChat, its popular messaging and social media app. CEO Pony Ma revealed the plans during a Jan. 13 address, indicating a push into AI-driven automation and user interaction.
AI Applications for Global Markets
Chinese AI applications are also making global entries. For example, Alibaba's Accio, an AI-powered search engine for product sourcing, has attracted 500,000 small business users globally.
Some Chinese Tech Stocks Offer Value
Chinese technology stocks are now value stocks: They are favoring dividends and buybacks lately.
Alibaba’s (BABA) P/B (Most Recent Quarter or MRQ) is 1.45X versus the underlying Internet - Commerce industry’s P/B of 1.81X. Price/Cash Flow (Most Recent Fiscal Year or MRFY) is 8.51X versus the industry measure of 16.69X.
Baidu’s P/B is 0.81X versus the underlying Internet – Services industry’s P/B of 2.01X. Price/Cash Flow (Most Recent Fiscal Year or MRFY) is 4.96X versus the industry measure of 12.35X. This year, both Alibaba and Baidu are experiencing a slower growth rate compared to the industries they operate in.
Meanwhile, Tencent is different as it has a higher growth rate than the underlying Internet – Services industry as well as the S&P 500. Investors are also rewarding the stock with higher price premiums as the stock has higher P/E, P/B and P/CF than the industries.
Any Weaknesses?
Despite the potential for growth, there are inherent weaknesses in the space. The tech sector's reliance on government policies and the ongoing geopolitical landscape pose risks to the stability of investments. Plus, most Chinese tech companies’ growth rates are below their underlying operating industries.
China Tech ETFs in Focus
China tech-based exchange-traded funds (ETFs) like KraneShares Hang Seng TECH Index ETF (KTEC - Free Report) , Invesco China Technology ETF (CQQQ - Free Report) , KraneShares CSI China Internet ETF (KWEB - Free Report) and iShares MSCI China Multisector Tech ETF (TCHI - Free Report) have added 7.4%, 5.6%, 7.3% and 6%, so far this year, respectively.