China’s AI listings boom leaves investors flying blind

Published Tue, Mar 3, 2026 · 01:30 PM

[HONG KONG] A flurry of stock market listings by Chinese artificial intelligence (AI) companies has opened up a gap in analyst coverage as brokerages struggle to keep up with the breakneck pace of the debuts.

Almost 80 per cent of the 27 AI-related companies that listed in Hong Kong in the past year have attracted fewer than three analysts, according to data compiled by Bloomberg. The list of the sparsely covered firms includes Shanghai Biren Technology and OneRobotics Shenzhen, whose shares have surged more than 60 per cent since listing.

The fresh crop of chip designers and large language model companies has helped China stand out among global markets shaken by concerns over AI disruption. But investors are heading into the first earnings season for the new stars with little guidance from analysts, making it difficult to assess the merits of further bets, especially as most of the companies are unprofitable.

“From an investment perspective, it does make things a lot harder,” said Winnie Wu, head of Asia-Pacific equity strategy at Bank of America. It “requires much deeper analysis and understanding – your judgment on the industry, on the company’s founder and management team, on corporate governance, on financial integrity – which again is probably hard for overseas investors sitting 3,000 miles away”.

Mainland China listings particularly fall into this category. Chip designer Moore Threads Technology, which has surged more than 400 per cent since it started trading in Shanghai in early December, still has no analyst covering it. MetaX Integrated Circuits Shanghai, which popped 693 per cent on its December debut to claim the record from Moore Threads, has two.

In contrast, analyst initiation for sizeable US companies typically starts after 25 days. York Space Systems raised US$629 million in January, about half the size of the Moore Threads offering, and is now covered by 10 analysts tracked by Bloomberg. EquipmentShare.com, whose US$859 million IPO in January was about on par with Biren’s the same month, also has 10 analysts following it.

There are signs of the coverage picking up, at least for the biggest companies. JPMorgan Chase and Goldman Sachs, have recently begun covering MiniMax Group and Knowledge Atlas Technology, which both rallied more than 60 per cent last month. Bank of America technology analysts recently initiated several new names, partly due to the growing importance of Chinese AI firms in the global supply chain. Morningstar is also planning to selectively expand coverage.

JPMorgan has a buy rating on both Minimax and Zhipu, as Knowledge Atlas is known, expecting them to be profitable by 2030, with the possibility of trading at a multiple of 30 times earnings, citing “the sector’s high growth and premium to Chinese Internet peers”. Goldman, on the other hand, gave Zhipu a neutral rating, based on an assumption of an estimated Ebit margin by 2035.

MiniMax on Tuesday reported results for the first time as a listed company. It had a better-than-expected 159 per cent surge in revenue in 2025, reflecting the torrid growth that’s drawn investors to China’s leading rivals to OpenAI. The company had a net loss of US$1.87 billion, compared with US$465.2 million a year earlier.

Part of the reason Wall Street has been so selective is the lack of resources after having retrenched during a multiyear slump in China, which is forcing firms to shuffle existing coverage. Morningstar analyst Phelix Lee is planning to shift to chipmakers from smartphone manufacturers.

To be sure, it’s not the first time the analyst community is tentative when a new industry emerges. During the wave of Chinese consumer companies listing in Hong Kong in the 2000s, it took considerable time before analysts started to provide meaningful coverage. In the case of sportswear manufacturer Li Ning, in the first nine months after a 2004 listing, the company was covered by less than two analysts while the stock soared 56 per cent.

For the AI industry, the challenges will only mount in the short term, with a healthy pipeline of listings yet to come. And with many of them still unprofitable, the lack of analyst coverage can be an under-the-radar investment risk, especially with so many companies competing in the same space.

“The attitude towards how long they are willing to stay with this sort of loss-making companies shifts with liquidity,” said Herald van der Linde, Head of Equity Strategy, Asia-Pacific at HSBC. “For Chinese technology companies, there often are three or four reasons that always change the picture in the future. It is very difficult to identify the real leading companies.” BLOOMBERG