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在线翻译:
szdaily -> Markets
AI-related stocks are investors’ hot picks
    2017-December-26  08:53    Shenzhen Daily

IFLYTEK Co., a Shenzhen-listed developer of speech-recognition software, has consistently failed to meet analysts’ profit estimates.

And yet it’s one of the hottest stocks in China, gaining some 110 percent this year as of yesterday, thanks to the latest investment craze sweeping the country’s US$7.5 trillion equity market: artificial intelligence (AI).

Iflytek and other AI-related companies are dominating gains among large-cap Chinese stocks. The buying frenzy has added US$61 billion in market value to China’s five most popular AI plays, vaulting some into the ranks of the world’s most actively traded securities.

BOE Technology Group Co., a Beijing-based maker of LCD panels that is developing a system to help drivers avoid traffic accidents, had the equivalent of US$2.5 billion in shares change hands on a single day in November, outtrading Wal-Mart Stores and AT&T combined.

“Retail investors in particular are crazy about companies that have an AI story,” said Zhang Gang, a Shanghai-based strategist at Central China Securities.

A growing number of analysts and fund managers warn that the rally has gone too far, too fast. They say many AI technologies are unlikely to prove profitable, and even those that do could take years to make significant contributions to firms’ bottom lines.

“Almost every company is standing at the starting line,” said Wang Menghai, a Shanghai-based money manager at Fullgoal Fund Management Co. “The short-term increases for these stocks are a bit too much.”

Iflytek, which has trailed analysts’ net income projections every year since its stock began trading in 2008, has a market value of US$12.3 billion. It trades at 109 times projected 2018 earnings, compared with an average of 13 for China’s CSI 300 Index and 25 for the Indxx Global Robotics & Artificial Intelligence Thematic Index, which tracks companies around the world.

Retail investors pay little attention to metrics such as earnings, said Kenny Wen, a strategist at Everbright Sun Hung Kai Co. Some are using borrowed money to amplify their bets on stocks including Iflytek’s and BOE Technology’s, said Xia Yu, a Beijing-based analyst at ICBC Credit Suisse Asset Management.

Fans of AI stocks say the high price-earnings ratios are justified by the firms’ long-term potential. Because many AI-related businesses are still so new, investors should focus more on sales growth, said Sam Kuo, manager of the UPAMC Global Innovative Tech Fund. (SD-Agencies)

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