Analysis of Pre-Market Decline Reasons for Chinese Concept Stocks and Investment Strategy Recommendations

Based on the latest market data, I will analyze in detail the reasons for the pre-market decline of Chinese concept stocks and their impact on investment strategies for you.

• S&P 500 futures fell 0.22%, Nasdaq futures fell 0.40%, and the Dow was basically flat [2]
• Major U.S. stock indices are in historical high regions (S&P 500 and Dow hit closing records on Christmas), with technical correction pressure [1][2]

• Technology and AI-related stocks were generally under pressure pre-market: Nvidia fell 1.1%, Oracle fell 1.6%, Tesla fell 1.4% [2]
• The S&P 500 Technology Sector has fallen more than 3% since early November, with obvious signs of sector rotation [1]
• Most Chinese concept stocks are technology and consumer companies, directly affected by sector adjustments

• The Fed will release the minutes of its December meeting on Tuesday (December 30), and the market is closely watching interest rate policy signals [1][2]
• Investors adjusted positions in advance to deal with policy uncertainty
• The path and pace of interest rate cuts in 2026 are still unclear, and there are differences in market expectations

• China Securities Regulatory Commission (CSRC) plans to promote a new listed company governance plan, requiring high-quality enterprises to increase dividends and share repurchases [3]
• Shanghai and Shenzhen Stock Exchanges have strengthened regulation of algorithmic trading, and relevant rules were implemented in 2025 [4]
• The Hong Kong Stock Exchange’s new public float rules will take effect on January 1, 2026, increasing compliance requirements [4]

• Currently in a shortened trading week after Christmas and before New Year, market liquidity has decreased significantly [1][2]
• Light trading volume has amplified price fluctuations
• Year-end fund rebalancing (Window Dressing) has led to adjustments in capital flows

• Chinese concept stocks performed well overall in 2025 (data shows the Chinese concept stock index rose about 14.5% cumulatively [6]), and there is a demand for profit-taking
• Institutional investors rebalance their portfolios at the end of the year

• U.S. semiconductor tariff policy on China (delayed until June 2027 but still retains negotiation leverage) continues to affect market sentiment [3]
• AI chip export controls and the risk of Sino-US technology decoupling continue to affect the valuation of technology Chinese concept stocks

According to the latest data, although pre-market declines occurred, by the close on December 29:

• Alibaba (BABA): $152.24, +1.45% [0]
• JD.com (JD): $29.40, +0.79% [0]
• Baidu (BIDU): $124.80, +1.17% [0]
• Li Auto (LI): $17.44, +3.93% [0]
• Xpeng Motors (XPEV): $20.78, +6.18% [0]

This indicates that pre-market declines are mainly driven by short-term sentiment and liquidity factors, not fundamental deterioration.

• Pre-market volatility is amplified in a low-liquidity environment; it is recommended to avoid large transactions during pre-market hours
• Focus on price stability and trading volume during regular trading hours
• Wait until after the Fed minutes are released (December 30) before adjusting positions

• Alibaba: Cloud computing and AI businesses drive growth; P/E ratio of 20.77 is relatively reasonable [0]
• Li Auto and Xpeng: NEV penetration continues to rise, but need to pay attention to increasing competition
• JD.com: P/E ratio of only 9.70, valuation is attractive [0]

• Consider shifting part of the position to defensive stocks (such as essential consumer goods, healthcare)
• Maintain an appropriate cash ratio to deal with possible market fluctuations

• AI Theme
  : Focus on companies with substantial investment in AI such as Alibaba and Baidu
• Consumption Recovery
  : E-commerce platforms like JD.com and Pinduoduo benefit from consumption recovery trends
• New Energy Vehicles
  : Li Auto, Xpeng, NIO have differentiated advantages in product strength and market share

• Geographical Diversification
  : U.S.-listed Chinese concept stocks + Hong Kong tech stocks + High-quality A-share targets
• Industry Diversification
  : Multiple sectors such as technology, consumption, healthcare, new energy
• Market Cap Diversification
  : Large-cap blue chips + Mid-cap and small-cap growth stocks

• China’s steady growth policies continue to take effect
• Deepening of capital market reforms (incentive policies such as dividends and repurchases)
• Opportunities for phased improvement in Sino-US relations

• Overall valuation of Chinese concept stocks is still at a relatively low historical level
• Market risk premium for Chinese concept stocks is too high, with room for repair
• Long-term optimism about the resilience and growth potential of China’s economy

• Choose leading companies with moats and competitiveness in their respective industries
• Focus on enterprises with abundant cash flow, low debt ratios, and stable dividend policies
• Attach importance to the company’s governance structure and ESG performance

• Review the portfolio quarterly
• Dynamically adjust allocation ratios based on market changes and company fundamentals
• Avoid over-concentration in a single stock or industry

1. No Panic Selling
   : Pre-market volatility is normal in a low-liquidity environment; decisions should be based on fundamentals rather than short-term price fluctuations
2. Build Positions in Batches
   : Avoid one-time large investments; use fixed investment or batch buying strategies
3. Dynamic Adjustment
   : Flexibly adjust strategies based on market environment and company changes
4. Risk Control
   : Set stop-loss points, maintain appropriate diversification, avoid over-concentration

• Macro Risks
  : Global economic recession, geopolitical conflicts
• Policy Risks
  : Deterioration of Sino-US relations, tighter-than-expected regulatory policies
• Market Risks
  : Sharp adjustments in U.S. stocks, liquidity crisis
• Exchange Rate Risks
  : RMB exchange rate fluctuations affect returns

[0] 金灵API数据 - 实时报价、市场指数、历史价格数据
[1] Reuters - “US stock futures inch lower after last week’s rally in holiday-shortened week” (https://www.reuters.com/business/us-stock-futures-inch-lower-after-last-weeks-rally-holiday-shortened-week-2025-12-29/)
[2] Wall Street Journal - “Stock Market Today: S&P 500, Gold Futures Edge Lower — Live Updates” (https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-12-29-2025)
[3] ts2.tech - “Alibaba Stock (BABA) Before the Market Opens Dec. 26, 2025” (https://ts2.tech/en/alibaba-stock-baba-before-the-market-opens-dec-26-2025-latest-news-ai-chip-catalysts-key-risks-and-analyst-targets/)
[4] ts2.tech - “Hong Kong Stock Exchange (HKEX) News on Dec. 20, 2025” (https://ts2.tech/en/hong-kong-stock-exchange-hkex-news-on-dec-20-2025-board-lot-reform-public-float-rules-ipo-pipeline-and-2026-forecasts/)
[5] ts2.tech - “Technology Stocks Today (Dec. 25, 2025)” (https://ts2.tech/en/technology-stocks-today-dec-25-2025-nvidias-groq-move-apples-china-signal-and-the-2026-tech-stock-forecast-wall-street-is-debating/)
[6] MoneyDJ - 中概股市场表现数据 (https://media.zenfs.com/zh-tw/moneydj.tw/184e5df7899aa0edb51c53353aaf63b7)