A Chinese AI stock with a killer app is gaining support from investors

issued Friday, January 23, 2026 · 10:18 a.m.

[HONG KONG] As China’s homegrown artificial intelligence (AI) boom enters its second year, investors are rushing into stocks of companies with killer apps, looking for returns to match skyrocketing valuations.

Kuaishou Technology has seen its stock rise 24% so far this year as its AI video generation tool Kling has gained support from users around the world. Alibaba Health Information Technology shares rose 33%, driven by enthusiasm for the company’s AI products, including a new chatbot aimed at helping doctors diagnose patients.

The pair is at the top of an index of Hong Kong-listed tech stocks as investors look for new winners in the deep-seeking-induced AI rally.

The industry’s early leaders included back-end technology companies such as Semiconductor Manufacturing International Corporation, but efforts have now expanded into more specialized areas with a focus on user experience. Investors are also looking for profitable companies.

“I think we’ll see a DeepSeek moment in real applications in 2026,” said Gary Tan, portfolio manager at Allspring Global Investments. He expects AI-driven productivity in areas such as the internet, healthcare and software to boost profits for Chinese companies this year.

Alibaba Health’s consensus earnings estimate has increased 24% over the past six months, while Kuaishou has increased 7%. By comparison, the Hang Seng Tech Index fell 16% as price wars and AI spending weighed on the outlook for big internet companies.

Both are still in growth mode, with AI creating new opportunities. Citigroup analyst John Yun sees Alibaba Health benefiting from increased online pharmaceutical sales as AI drives traffic from across Alibaba’s ecosystem.

Jefferies Financial Group analyst Thomas Chong wrote in a note Tuesday that Kuaishou’s Cling is “well-received” and user growth is boosting sales guidance. “Continued technological advancements and innovations have a positive impact on revenue,” he added.

China’s technology sector has received strong support from the Chinese government following the release of DeepSeek’s R1 model exactly one year ago. A series of new listings is also adding to the excitement in the stock market.

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This month, two more OpenAI challengers made headlines with their successful debuts in Hong Kong. Minimax Group’s stock price rose 139%, while Knowledge Atlas Technology JSC’s stock price, known as Zhipu, rose 74%.

DWS Chief Investment Officer Ivy Ng said DeepSeek’s open source model, produced at low cost, has “significantly lowered the barrier to building advanced AI applications and accelerated the development of China’s extensive AI ecosystem.”

She notes that while the stock market was booming last year, the early stages of AI investment held back corporate profits. However, Chinese companies are expected to see a much-needed boost in profitability this year, thanks to AI-enabled efficiency gains.

“We continue to see attractive bottom-up opportunities, particularly in China’s consumer technology sector, where fundamentals are improving and the prospects for monetizing AI-enabled services are becoming clearer,” Ng said. “Some areas of the market still offer reasonable valuations, allowing for disciplined stock selection.”

Profitable app makers are trading cheaper than some hot tech sectors. Alibaba Health’s Hong Kong-listed stock has a forward P/E ratio of 34 times over the next 12 months, while Kuaishou’s is only 13 times. This is comparable to semiconductor manufacturers Huahong Semiconductor and Cambricon Technologies, which are more than 100 times more expensive. bloomberg