Analysis Report

Analysis of Valuation Repair and Investment Value in Segmented Sectors of Chinese Concept Stocks (Based on Acquired Data)

I. Valuation Repair Drivers (Tools and Web Search Evidence)

• Sentiment Improvement and Capital Rotation: Web search reports show that entering 2026, U.S.-listed Chinese concept stocks heavily held by public QDII funds rebounded across the board, with the Nasdaq China Golden Dragon Index rising 4.38% on the first trading day of 2026 [1], reflecting optimistic expectations of capital for China’s consumption recovery; another report mentioned that “Chinese concept stocks surged 15%” and stated that the sentiment of the “Hulian Fund” group has warmed up significantly [2].
• Sector Capital Flow: Web searches indicate that capital is rotating to the consumer sector, and technology concept stocks adjusted significantly during the New Year holiday [1]; signs of consumption recovery drove the rise of QDII individual stocks that are heavily invested in internet and consumer leaders [1].
• Reference to Major Institution Views: Morgan Stanley believes that 2026 is a year to consolidate the “fruits of victory” of valuation repair in China’s stock market, with index gains possibly in single digits, profit improvement as the main driver, and limited room for further upward valuation [3] (Note: This view is for China’s stock market as a whole and can be used for cross-validation of sentiment and rhythm).

II. Investment Value in Segmented Sectors (All Based on Broker API Tool Data)

1. Internet Technology (Pinduoduo PDD, Baidu BIDU, Alibaba BABA)

• PDD: Market cap is approximately $168.11B, PE (TTM) is about 12.20, ROE is around 29.30%, net profit margin is about 24.43%, Q3 EPS exceeded expectations by +33.94%, with outstanding profitability [0]. Technically, it is SIDEWAYS; KDJ indicates overbought risk that needs attention [0]. The median analyst target price is about $140.50, with a potential upside of approximately 16.6% from the current level [0].
• BIDU: Market cap is approximately $50.97B, PE is about 13.49, net profit margin is around 20.97%, Q3 EPS exceeded expectations by +30.00%, with continuous investment in AI/autonomous driving technology [0]. Technically, it is SIDEWAYS; KDJ indicates overbought status that needs vigilance [0]. The median analyst target price is about $160.00, with a potential upside of approximately 6.4% [0].
• BABA: Market cap is approximately $359.85B, PE is about 21.17, with stable profitability and good liquidity (Current/Quick ratios are both 1.46) [0]. Technically, it is SIDEWAYS; KDJ is bullish but the trend has not confirmed a breakout [0]. The median analyst target price is about $190.00, with a potential upside of approximately 22.6% [0].
• Summary: Internet leaders have profit and cash flow support, with relatively reasonable valuations. PDD and BIDU have short-term technical overbought conditions requiring pullback risk control; BABA’s trend is yet to break out.

2. Fintech (Futu FUTU)

• FUTU: Stock price today +2.92%, past 1 year +130.13%, past 6 months +50.94%, market cap approx $25.96B, PE approx 20.84, net profit margin approx 47.11%, ROE approx 30.67%, with outstanding profitability and growth [0]. Technically, it is UPTREND (pending), indicating possible continuation of upward movement, and providing support/resistance levels (approx 170.11/187.00) [0]. Median analyst target price approx $236.00, potential upside approx 27.0% [0].
• Summary: Fundamentals and technicals resonate; the upward trend is clear but needs attention to fluctuations after overbought conditions.

3. Electric Vehicles (NIO, XPeng XPEV, Li Auto LI)

• 2025 Sales Volume (Industry Report Caliber): Web search reports show that XPeng’s 2025 sales volume is approximately 429,000 units (YoY +126%), NIO’s about 326,000 units (YoY +46.9%), Li Auto’s about 406,000 units (YoY -18.8%) [4][5][6].
• Profitability and Valuation (Tool Data):
  • LI: The only one profitable (EPS TTM approx $1.09, PE approx 16.09, net profit margin approx 3.63%, ROE approx 6.43%) [0]; technically SIDEWAYS [0].
  • NIO/XPEV: Still in loss phase (NIO PE is negative, net profit margin approx -31.46%; XPEV PE is negative, net profit margin approx -4.04%) [0]; both are technically SIDEWAYS [0].
• Valuation Elasticity: From technical levels, NIO’s support/resistance is approx 4.88/5.14, XPEV’s approx 19.74/21.03, LI’s approx 17.46/17.72 (ranges refer to technical support/resistance from tools) [0].
• Summary: Li Auto has the most solid fundamentals but needs to verify profit stability; NIO/XPeng should seize sales elasticity and event-driven opportunities but need to bear profit fluctuations [4][5][6].

4. Market Environment (Tool Data)

• Major U.S. Indices: From July 1, 2025 to Jan 6, 2026, S&P500 rose approx +11.64%, Nasdaq rose approx +15.41%, Dow Jones rose approx +11.26%, overall environment is favorable for the performance of Chinese concept risk assets [0].
• Sector Performance on the Day (Jan 6, 2026): Industrial, financial, consumer and other sectors led the gains; technology sector fell slightly, need to be vigilant about the impact of industry rotation on the rhythm of valuation repair [0].

III. Comprehensive Allocation Recommendations (Based on Tools and Web Searches)

• Short-term Tactics: Fintech (FUTU) has both profitability and upward trend; can focus on tracking and control overbought pullback risks [0]. Internet leaders (PDD/BIDU/BABA) have matching profitability and valuation; PDD/BIDU have short-term overbought conditions and need to wait for better entry opportunities [0].
• Mid-term Layout: The logic that consumption recovery drives valuation repair of internet/consumer leaders has been verified by web searches [1][2]; in the electric vehicle sector, Li Auto LI has more solid fundamentals, NIO/XPeng should seize sales elasticity and event-driven opportunities but need to bear profit fluctuations [4][5][6].
• Risk Points: Technically, many individual stocks are already in SIDEWAYS or UPTREND (pending); KDJ indicates some overbought conditions, need to pay attention to short-term fluctuations and pullback control [0]. The repair process of Chinese concept stocks is affected by factors such as macro data, earnings season performance realization, and external environment.

Chart Explanations

• Comparison of Performance of Leaders in Various Sectors of Chinese Concept Stocks: Covers the three EV giants, three internet giants, cumulative gains/losses since 2025, and PE comparison; visualizes relative performance and valuation differentiation in segmented sectors [0].
• Market Cap Comparison: Shows the market cap scale of major Chinese concept stocks (Alibaba, Pinduoduo, Baidu, Futu, XPeng, Li Auto, NIO); facilitates grasping weight and liquidity distribution [0].

Data and Explanations
This analysis strictly cites broker API (market quotes, financials, technical indicators, DCF) and web search results; judgments without cited sources have been deleted or revised to evidence-based statements. Broker API data covers real-time quotes, technical aspects, financial health, analyst target prices, and valuations; web searches are used for sentiment and industry fundamentals corroboration.

References
[0] Jinling API Data
[1] Eastmoney — “Full Rebound! Consumption Recovery Drives QDII Heavyweight Stocks to Strengthen; Public Funds Are Optimistic About 2026 Opportunities” (https://m.1234567.com.cn/index.html?page=zxzw&code=202601043608008042)
[2] Eastmoney Caifuhao — “Chinese Concept Stocks Surge 15%! ‘Hulian’ Finally Turns Around: 3 Main Lines to Seize Value Reassessment Opportunities in the Next 5 Years” (https://caifuhao.eastmoney.com/news/20260103185750611026990)
[3] Securities Times — “2026 Will Be a Year to Consolidate the ‘Fruits of Victory’ of China’s Stock Market! Morgan Stanley’s Wang Ying’s Latest Voice” (https://www.stcn.com/article/detail/3528400.html)
[4] Aika Hao — “Li Auto Fell Behind in 2025; NIO and XPeng Made a Comeback” (https://aikahao.xcar.com.cn/item/3728925.html)
[5] Chejia Hao — “Li Auto Fell Behind in 2025; NIO and XPeng Made a Comeback” (https://chejiahao.m.autohome.com.cn/info/24657319)
[6] Caiwen — “New Energy Vehicle Makers in 2025: Who Seized Position, Who Burst Forth After Accumulation?” (https://www.caiwennews.com/article/1411645.shtml)