In-depth Reshaping of Portfolio Allocation by the Substitution Effect of Internet and AI+ Industries

Based on the investment summary you mentioned with a 22% return in 2025, combined with current market data, I will systematically analyze the substitution effect of the Internet and AI+ industries on traditional consumption and supply chains, and how this trend reshapes portfolio allocation strategies.

According to the latest market research data, AI is profoundly transforming the traditional supply chain system:

• Revolutionary efficiency improvement
  : JD.com, Pinduoduo, and 1688 have increased intelligent product selection efficiency by 30%, intelligent customer service coverage reaches 80%, factory prediction models have raised inventory accuracy to 90%, smart warehousing efficiency has improved by 20-35%, and the cycle of personalized production (C2M) has been shortened by 40% [1]
• Full-link penetration
  : In 2025, AI has deeply transformed industries including the $3 trillion automotive industry, the $2 trillion pharmaceutical industry, and the $30 trillion foreign trade industry [1]
• Practical application implementation
  : According to data from Alibaba International Station, 180,000 small and medium-sized merchants use AI business assistants, accounting for 90%; the level of AI business assistants has reached that of the top 25% foreign trade salespeople [2]

• Capital efficiency dominance
  : The capital productivity of the online retail industry is 5-10 times higher than that of traditional retail [3]
• Continuous penetration rate increase
  : In the first three quarters of 2024, online physical retail sales reached 9.1 trillion yuan, with a year-on-year growth rate of 7.9%, and the online penetration rate of physical goods reached 25.7%, an increase of 1.1 percentage points year-on-year [4]
• Light asset advantage
  : The capital occupied by physical stores is usually 1.2-2.5 times the annual revenue of offline retailers, while online merchants do not need to invest in building physical stores [3]

• Market Cap: HK$5.44 trillion
• 2025 YTD Growth: +43.87%
• P/E:21.87x | ROE:20.29%
• Analyst Consensus:50% Buy Rating

• Market Cap: $344.3 billion
• 2025 YTD Growth: +74.79%
• P/E:19.52x | ROE:12.16%
• Analyst Target Price: $190 (+28% from current)
• 89.5% of analysts give Buy Rating

:

1. AI Scenario-based Monetization
   : 34% of orders on Tmall Supermarket come from AI recommendation channels [1], and AI is reshaping the shopping experience
2. Ecosystem Moat
   : Tencent and Alibaba have established a complete ecological closed loop from search and recommendation to payment
3. High ROE + Reasonable Valuation
   : The ROE of leading Internet companies generally ranges from 15-30%, and the P/E ratio remains around 20x

• Market Cap: HK$776.9 billion
• 2025 YTD Growth: +20.12%
• P/E:13.95x | ROE:13.60%
• 3-Year Growth: +73.78% |5-Year Growth: +164.91%

:

1. Energy Security Bottom Line
   : Thermal coal prices have entered the “coal-power profit sharing” position (around 750 yuan) [5]
2. High Dividend Attribute
   : Leaders like Shenhua continue to provide stable cash flow, becoming a ballast allocation in the AI era
3. Beneficiary of New Energy Transition Period
   : Intermittent energy sources such as photovoltaic and wind power need coal power as peak-shaving support

• Market Cap: RMB 1.74 trillion
• 2025 YTD Growth: -6.49%
• 3-Year Decline: -19.06% |5-Year Decline: -25.47%
• P/E:19.36x | ROE:36.48%

:

1. Experience-based Consumption Resilience
   : Categories that provide emotional value such as high-end liquor and luxury goods are difficult to be replaced by AI
2. Impact on Standardized Consumption
   : Categories that are highly online such as daily consumer goods and 3C products face pressure from e-commerce channels
3. Rise of New Consumer Brands
   : The C2M model shortens the production cycle by 40% [1], accelerating the elimination of traditional brands

Based on current market trends and substitution effect analysis, it is recommended to adopt the

:

• Tencent (0700.HK):15% - Most complete AI ecosystem layout, game + social + payment closed loop
• Alibaba (BABA):15% - Core platform for AI transformation of supply chains, cloud computing + AIGC applications

• China Shenhua (1088.HK):20% - High dividend + energy security bottom line
• Kweichow Moutai (600519.SS):20% - Representative of experience-based consumption, stable high-end pricing power

• Smart supply chain-related targets: JD.com (9618.HK), Meituan (3690.HK)
• AI application layer: Baidu (9888.HK), Kuaishou (1024.HK)
• Traditional energy transition: China Shenhua, China Coal Energy (1898.HK)

• Increase holdings in Internet: Accelerated AI monetization, large valuation repair space
• Reduce allocation to traditional energy: Take profits after coal prices reach the target range of 800-860 yuan [5]

• Focus on AI hardware implementation: Intelligent driving penetration rate breaks through the 20% inflection point [1]
• Layout embodied intelligence: Dawn of humanoid robot commercialization, starting from automobile and logistics factories [1]

• Supply chain reconstruction: China’s supply chain becomes the “implementation engine” of global micro-innovation [2]
• AI-native enterprises: It is expected that more than 200,000 AI-native foreign trade enterprises will be born in the next 3 years [2]

1. Regulatory Risk
   : Policy risks such as platform anti-monopoly and data security
2. Technology Iteration Risk
   : Rapid iteration of AI models may lead to valuation bubbles
3. Economic Cycle Risk
   : Unexpected intensity of consumption downgrade affects Internet monetization

1. Cross-market Hedging
   : Diversified allocation across A-shares, Hong Kong stocks, and US stocks
2. Industry Hedging
   : Balanced allocation across Internet, traditional energy, and consumption
3. Time Hedging
   : Combination of short-term (AI theme) and long-term (energy security)

##5. Summary of Investment Philosophy

The substitution of traditional consumption and supply chains by the Internet and AI+ is not a simple “elimination”, but an

:

1. Efficiency Improvement
   : AI increases supply chain efficiency by 30-40% [1], which is an irreversible trend
2. Experience Upgrade
   : From “more, faster, better, cheaper” to “understanding your needs”, AI redefines the consumption experience [1]
3. Value Reconstruction
   : Traditional industries either embrace AI transformation or become infrastructure for the AI ecosystem

Your 22% return has proven accurate grasp of trends. In 2026, it is recommended to continue

, finding a balance between technological revolution and cyclical laws.

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[0] Jinling API Data (Company overview and financial indicators of Tencent 0700.HK, Alibaba BABA, China Shenhua 1088.HK, Kweichow Moutai 600519.SS)

[1] The Paper - “2026 AI Chat: Will Artificial Intelligence Bring the Next Great Consumption Era?” (https://m.thepaper.cn/newsDetail_forward_32172904)

[2] Eastmoney.com - “2025 Annual Moment of Cross-border E-commerce: China’s Supply Chain Upgrade, AI Transforms Global Trade” (https://biz.eastmoney.com/a/202512263603002180.html)

[3] McKinsey Global Institute - “China’s Online Retail Revolution: Online Shopping Boosts Economic Growth” (https://www.cisco.com/web/CN/partners/industry/pdf/retail_industry_03.pdf)

[4] Eastmoney Securities - “2025 Investment Strategy for Internet Industry” (https://pdf.dfcfw.com/pdf/H3_AP202412311641493712_1.pdf)

[5] Kaiyuan Securities - “New Long-term Thermal Coal Contract Remains Unchanged, Price Stabilization Logic Still Valid” (https://pdf.dfcfw.com/pdf/H3_AP202511241787238614_1.pdf)

[6] Zeping Macro Team - “China Artificial Intelligence Report 2025: New Trends” (https://cj.sina.cn/articles/view/1010395044/3c3967a401901muzu)