Chinese tech companies, which have rapidly grown based on a massive domestic market and advanced technological capabilities, are emerging as a new center in the global market. With large-scale policy support from the Chinese government, analysts believe these companies have significant potential for continued innovation and future growth.
On June 17, Samsung Asset Management announced the listing of the 'KODEX China Tech TOP10' ETF, which encapsulates the core driving forces of China's technological innovation.
The KODEX China Tech TOP10 ETF invests more than 70% of its total portfolio in the BIG5 core stocks leading China's AI ambitions: Tencent, Xiaomi, Alibaba, Meituan, and BYD. The ETF is designed to allow investment in China's top companies, which, like major US tech firms, are dominating the market and maximizing winner-take-all benefits through enormous capital strength and unrivaled technological prowess.
Chinese big tech companies are solidifying their competitive edge by continuously investing in new business sectors that receive full government support. It is expected that this will provide the foundation for these companies to grow even faster and dominate the market. Companies selected as core tech firms receiving strategic government support are likely to directly benefit from China's AI growth.
The Chinese government is actively encouraging consumption and investment through policies such as the 'Yigu Huaxin' initiative (supporting the replacement of old products with new ones). These policies are leading to improved sales growth rates in major consumer sectors such as telecommunications devices, home appliances, electric vehicles, and e-commerce. Leading companies in these industries are accelerating their growth as the biggest beneficiaries of government policies. Companies included in the 'KODEX China Tech TOP10' ETF are expected to directly benefit from these domestic demand-boosting policies and the recovery in consumption. Backed by China's vast consumer market, these companies have the potential to continue their growth trajectory by providing innovative technologies and services.
Lee Junjae, a manager at Samsung Asset Management, said, "With the emergence of DeepSeek, China's tech industry is being reevaluated and, backed by government policy support, is expected to achieve high growth rates going forward." He added, "The KODEX China Tech TOP10 is a product that focuses investment on leading tech conglomerates that will drive the entire industry by investing in and developing new technologies based on their strong capital power."
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