China ETF and ADRs Jumped; CWEB up 7%, YINN up 5%, BIDU and BILI up 7%, BABA up 6%

The rise of Chinese AI startup DeepSeek has sparked a hunt for possible service and application beneficiaries from the country’s advancement in large language models, fueling a rally in cheaply-valued tech shares. The index currently trades at 17.4 times forward multiples, still below its five-year average of 24.5 times.

“Re-rating opportunities come when market reassess China’s innovative capabilities and corporate earnings growth following the AI breakthrough,” Raymond Ma, Invesco’s chief investment officer for mainland China and Hong Kong, wrote in a note. “There is a strong case for potential re-rating, especially for Hong Kong-listed Chinese stocks, in which the valuation is much more attractive.”