Investment Strategy Insights for A-Shares Hardtech Sector from 'Marginalization' to 'New King Ascendancy' in 2025

On August 27, 2025, the A-share market witnessed a symbolic moment: Cambricon (688256.SS) hit an intraday price of 1464.98 yuan, briefly surpassing Kweichow Moutai (600519.SS) to become the new A-share “stock king”[1][2]. This event marks a

—a power transition from traditional consumer leaders to hardtech upstarts.

According to brokerage data, Cambricon’s stock price rose

in 2025, with a market cap exceeding 600 billion yuan at one point[0]. Meanwhile, Kweichow Moutai’s stock price fell [0]. This stark contrast highlights a complete shift in market capital flow:

Stock Code	Company Name	2025 YTD Change	Current Market Cap	Industry
688256.SS	Cambricon	+111.92%	~580 billion yuan	AI Chip
600519.SS	Kweichow Moutai	-7.80%	~1.75 trillion yuan	Traditional Consumption
000063.SZ	ZTE Corporation	-6.26%	~160 billion yuan	Communication Equipment

On January 27, 2025, DeepSeek released the R-1 large model, claiming successful training on low-end processors, triggering a剧烈震荡 in the global AI market—NVIDIA’s market cap evaporated nearly 600 billion USD in a single day[3]. This event is regarded as

, proving that China’s AI innovation capability is changing the outdated narrative of “China only imitates”[2].

DeepSeek’s success has had a chain reaction:

• Domestic chip demand explosion
  : Internet giants like Tencent, Alibaba, and ByteDance have become major clients of domestic AI chips[2]
• Continuous policy dividend release
  : The State Council issued the “Opinions on Further Implementing the ‘AI+’ Initiative”, proposing deep integration of AI with key sectors by 2027[2]
• Capital market boom
  : The STAR 50 Index soared a record 28% last month, with a forward P/E ratio of 57x—higher than the 5-year average of 41x[7]

: Cambricon’s latest SiYuan 590 chip uses 7nm advanced process, with inference energy efficiency comparable to international giants, and has completed adaptation verification for mainstream large models[2]. More importantly, when releasing the V3.1 large model, DeepSeek rarely mentioned that “UE8M0 FP8” was designed for next-gen domestic chips—seen as [2].

: In the 2025 Fortune China Tech 50 list, Yushu Technology (ranked 9) entered the top 10, focusing on humanoid and quadruped robot R&D with globally leading product performance[5]. This indicates China’s rapidly rising competitiveness in next-gen intelligent manufacturing.

• “AI+ Initiative”
  : Clearly proposes deep integration of AI with key sectors by 2027[2]
• Accelerated Domestic Substitution
  : China faces severe shortages of advanced semiconductors; the government has begun intervening in SMIC’s output allocation to prioritize leading enterprises like Huawei[7]
• New Delisting Rules
  : Although details are not disclosed in this report, the overall policy direction is
  to accelerate the clearance of low-quality listed companies and free up market space for hardtech enterprises

As of August 2025, the total margin balance of A-shares reached

, returning to above 2.2 trillion yuan after a decade and hitting a record high[6]. Among them:

• Chip stocks like Cambricon and SMIC ranked among the top 10 net margin buyers[6]
• Ping An ranked first with 23 billion yuan in net margin purchases[6]
• Shenzhen Stock Exchange’s margin balance hit a new high[6]

: The hardtech sector has become the “new core assets” of A-shares, but it is necessary to .

Cambricon’s 2025 P/E ratio reached

[0], and its dynamic P/E ratio even soared to 500x—far exceeding the industry median of 73.92x[2]. This valuation level clearly carries bubble risks.

:

• Focus on
  enterprises with real technical barriers
  : e.g., Cambricon’s SiYuan 590 chip has completed adaptation verification for mainstream large models[2]
• Beware of
  pure concept speculation
  : There are many companies in the STAR Market that蹭热点 (ride the wave) without core technologies
• Use
  dollar-cost averaging (DCA)
  to participate in high-volatility sectors and avoid chasing highs[7]

: Amid Sino-US tech decoupling, domestic substitution is an —not a short-term theme.

Data shows:

• Alibaba has developed chips capable of running AI services[7]
• SMIC has received policy preference, with production capacity prioritized for Huawei[7]
• Stock prices of semiconductor equipment manufacturers like North Huachuang have surged[7]

:

1. Chip Design
   : Cambricon, HiSilicon (unlisted)
2. Chip Manufacturing
   : SMIC, Hua Hong Semiconductor
3. Semiconductor Equipment
   : North Huachuang, AMEC
4. EDA Software
   : Huada Design, GILON Electronics

Historical experience shows that any company challenging Kweichow Moutai’s “stock king” status has ultimately failed to sustain it[2]. This is known as the “Moutai Curse”:

• China Shipbuilding, QuanTong Education, Changchun High-tech have all challenged Moutai
• China Mobile once briefly surpassed Moutai’s stock price
• But none have ultimately撼动 (shaken) Moutai’s long-term status

:

• Although Cambricon’s first-half revenue reached 2.881 billion yuan (up 4348%) and net profit was 1.038 billion yuan,
  its customer concentration is too high
  (top client accounts for nearly 80% of total revenue)[2]
• R&D expenditure ratio has long exceeded 150%, with 2023 R&D investment reaching 1.118 billion yuan—this “burn money for technology” model carries uncertainty[2]
• With accelerated IPOs, Cambricon’s scarcity dividend is facing dilution[2]

:

• Compute Chips: Cambricon, Huawei Ascend
• Compute Infrastructure: Inspur, Sugon, Unisplendour
• AI Applications: iFlytek, SenseTime, CloudWalk

:

• Core Components: Lede Harmonic, Hechuan Tech
• Whole Machine Manufacturing: Estun, Inovance
• Machine Vision: Opto-electronics, Tianzhun Tech

:

• Equipment Manufacturers: North Huachuang, AMEC, ACM Research Shanghai
• Material Suppliers: Shanghai Silicon Industry, Anji Technology
• Packaging & Testing: JCET, Tongfu Microelectronics

In 2025, A-share margin balance hit a record high, and daily turnover also reached a new high[6]. This indicates that market sentiment is

—need to be alert to the following risks:

1. Liquidity Risk
   : If market sentiment reverses, leveraged funds may exit rapidly
2. Valuation Risk
   : The STAR 50 Index’s forward P/E ratio is 57x, higher than the historical average[7]
3. Regulatory Risk
   : Regulators may intervene in excessive speculation[7]

:

• Control single-stock positions to avoid over-concentration
• Set stop-loss/take-profit rules and strictly implement them
• Keep some cash to seize callback opportunities

Although the traditional consumption sector was generally cold in 2025, it may also breed

:

• Kweichow Moutai fell 7.80% in 2025[0], with valuation at a historical low
• With economic recovery, the consumption sector is expected to see valuation repair
• Focus on high-quality consumer stocks with brand moats and cash flow

: Adopt —hold hardtech growth stocks on one end and undervalued high-quality consumer stocks on the other. This allows you to enjoy tech innovation dividends while防范 (preventing) market volatility risks.

The Hong Kong Exchanges and Clearing (HKEX) launched the “HKEX Tech 100 Index”, and the proportion of tech stocks in the total market cap of “Stock Connect” has risen from about 10% in 2014 to about 40%[4].

:

• Tencent Holdings (0700.HK): AI large model + cloud computing ecosystem
• Alibaba Group (09988.HK): AI chip + cloud computing
• SMIC (0981.HK): Domestic chip manufacturing leader
• Lenovo Group (0992.HK): AI server + PC

:

• AI Chips: Cambricon (beware of valuation risk), Hygon Information
• Semiconductor Equipment: North Huachuang, AMEC
• Communication Equipment: ZTE Corporation (note: weak performance in 2025; need to distinguish between individual stocks and sector differentiation)
• Robots: Lede Harmonic, Estun

:

• Liquor: Kweichow Moutai (valuation repair opportunity)
• Pharma: Hengrui Medicine, Mindray Medical
• Consumer Goods: Midea Group, Haier Smart Home

:

• Low-Altitude Economy: Wanfeng Aowei, Sunward Intelligent
• Quantum Technology: Quantum Shield, Accelink Tech
• Brain-Computer Interface: Chengyitong, Sanbo Brain Hospital

• Cash:应对 (deal with) market volatility and seize bottom-fishing opportunities
• High-Dividend Stocks: Yangtze Power, China Shenhua
• Gold ETFs: Hedge against geopolitical risks

1. Over-Valuation Risk
   : The hardtech sector’s overall valuation is at a historical high, with correction risks
2. Tech Route Risk
   : AI technology iterates rapidly; leaders may be quickly overtaken
3. Geopolitical Risk
   : Intensified Sino-US tech competition may affect supply chain stability
4. Regulatory Risk
   : Regulators may intervene in excessive speculation
5. Underperformance Risk
   : Some hardtech enterprises have unproven profit models

The shift of the A-share hardtech sector from “marginalization” to “new king ascendancy” in 2025

. This shift is not only a change in investment style but also a reflection of the rise of China’s tech innovation capability in the capital market.

For investors, the key lies in:

1. Recognize the Trend
   : Hardtech rise is an irreversible general trend
2. Manage Timing
   : Avoid chasing highs; use strategies like DCA to分散 (diversify) timing risks
3. Select Quality Stocks
   : Only enterprises with real technical barriers can穿越周期 (cross cycles)
4. Control Risk
   : Beware of valuation bubbles and do good asset allocation

---

[0] Jinling API Data - Brokerage Data (Cambricon Company Profile, Kweichow Moutai Price, ZTE Price)

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