In the ever-evolving world of technology, every breakthrough application that garners attention and every enhancement in product functionality acts as a catalyst, pushing the sector upwardThese shifts are not just markers of innovation, but they also signal potential profit and investment opportunities for forward-thinking investorsWith the recent surge of the DeepSeek concept and the rise of humanoid robots in the market, there’s much curiosity about what this means for the next wave of tech investmentsInsights from industry experts, including fund manager Zhang Jingsong, suggest that this might be just the beginning.

Zhang Jingsong, who brings a dual perspective from both buy and sell sides, has been deeply engaged in the digital economy space, covering a wide array of industries with a focus on thorough research

Advertisements

His expertise spans software, the 5G industry, semiconductors, smart cars, intelligent manufacturing, and new materialsWith over nine years of experience in securities, including three years managing public funds, his insights carry weight in the investment community.

As we look forward, it’s essential to review the market dynamics and understand the broader implications of recent stock performancesIn February 2025, as reported by iFinD, the top three rising sectors were non-ferrous metals, machinery, and automotive industries, with gains of +4.5%, +1.0%, and +0.8%, respectivelySpecific segments within robotics and printed circuit boards (PCBs) have also made impressive strides, showcasing the technology sector's vibrancyOn a contrasting note, the retail, defense, and food and beverage sectors faced declines, reflecting market volatility.

01

Market Review

Core indices in the A-share market have also shown varied performance, with the Science and Technology Innovation Board 200 and the Northern Stock Exchange 50 leading the way with respective gains of +2.0% and +1.9%. Meanwhile, the FTSE China A50 and the Dividend Index saw significant losses of -4.2% and -3.5%. Northbound capital saw transaction volumes in January hit 30 trillion yuan, indicating a robust market activity despite the approaching Chinese New Year.

The Hang Seng Index and the Hang Seng Technology Index also recorded positive performances in January, rising by +0.8% and +5.7%, respectively

Advertisements

Notably, capital inflows from southbound investments reached a record high of 125.6 billion Hong Kong dollars for the month, maintaining a trend of strong interest from investors in Hong Kong.

Looking globally, important indexes like Japan's Nikkei 225, the Nasdaq, and the Dow Jones Industrial Average exhibited notable shifts, with fluctuations of -0.8%, +2.1%, and +1.6% respectivelyThe conversation around increasing systemic allocations in Chinese stocks has gained traction overseas, reflecting a growing global interest in market dynamics.

02

Domestic and International Macro Indicators

On a more macroeconomic scale, the U.S

Advertisements

continues to navigate tariff negotiations with multiple countries, including ChinaKey policy areas to watch include potential tax reductions, government spending cuts, technology sanctions against China, and geopolitical matters concerning energy and territoryThe resilience of the U.Slabor market will also be central to economic discussions, as inflationary pressures persist albeit there are signs of a stable performance.

Domestically, expectations for China’s macroeconomic policy in the first half of this year remain aligned with the spirit of the central economic work conference from late last yearThis outlook anticipates the implementation of more proactive fiscal policies and moderate monetary easing, with analysts observing the housing price trends, interest rates, and the dynamic between currency exchange rates closelyA cautious approach towards geopolitical risks, especially those that may arise unexpectedly, is advised.

03

Investment Strategies in A-shares

As for investment strategies within the A-share market, experts maintain their recommendation of a “barbell” approach during this ongoing phase

• Robust Drive of the American Economy
• UK to See Two More Rate Cuts
• Global Market Volatility
• Emerging Technologies and Cash Flow in Sectors
• 2025: A Year of Opportunity in AI Endpoints & Apps

This involves focusing on both technology themes like AI applications and the dividends from structural adjustments. In particular, the innovations surrounding technology and product development are expected to draw significant interestMarket valuations could surge for companies showing potential for radical advancements, even if substantial realization of these gains may take time.

During the recent Chinese New Year celebrations, DeepSeek and Yuzhu Technology garnered substantial attention, echoing the investment directions suggested earlierThere is a proactive recommendation to pay closer attention to investment opportunities in AI applications and terminals in 2025, with a systematic breakdown of the investment logic provided below:

Firstly, looking at semiconductor advancements:

As the speed of technological progress within dense models slows down, innovations in structure such as MOE, MLA, reinforcement learning, and distillation are accelerating advancements in inference sides

High-performance algorithms are speeding up application penetration, enabling local AI experiences with lower computational powerAlongside systems on chips (SoCs), related sectors including analog, control, connection, power management, and storage are likely to benefit significantly.

From a semiconductor design perspective, if the economic cycle normalizes, the semiconductor design sector could witness an upward trajectory by the first half of 2026. Companies with strong product development capabilities and robust investment prospects will increasingly be crucialGiven the sustained U.Ssanctions against China in this sector, the significance of China's advanced manufacturing and packaging processes within the semiconductor supply chain continues to rise.

Next, attention should be turned to innovation in terminals like robotics and AI glasses:

Tesla has emerged as a leader in the application of humanoid robots, and domestically, strong hardware supply chain capabilities can facilitate investment opportunities perceived through three dimensions:

1. Recognition of key components like motors, reducers, and screws is becoming more defined, suggesting investment in leading companies with outstanding product capabilities.

2. Certain sensors and materials are still being iterated, revealing a blooming landscape of solutions.

3. It will also be critical to anticipate volumes and developments in assembly enterprises.

Looking ahead, monitoring advancements in the research and development efforts of domestic companies in fields like neural networks will be essential

Beyond robotics, innovations in AI glasses and AI-driven toys possess the potential to become bestselling productsRelated sectors, including chips, optics, and assembly, are expected to profit from these movementsThe emerging opportunities in the new consumer landscape around the Lunar New Year are further validating this potential; in addition, the downward pricing trends tied to smart driving technologies will stimulate the growth of domestic autonomous driving chips and modules.

Lastly, it’s vital to focus on the reassessment of software value driven by the AI ecosystem:

Companies like ByteDance are spearheading the construction of a closed-loop AI ecosystem from a consumer perspective, while the integration of AI in various business-level software sectors is likely to generate incremental commercial value, leading to an increase in adoption across fields such as marketing, office productivity, finance, e-commerce, education, healthcare, security, and data management