2020.12.12 CoStone Capital Views:
CoStone Chairman Zhang Wei was honored 2020 China’s Influential VC Investor Top10, and he was also invited to give a speech titled “Embracing Institutional Reform, Investing in China’s Hard & Core Technology”.
On December 11th ,the 2020 China Venture Capital Annul List·Golden Investment Prize List was announced. Through data analysis, performance assessment and industry influence review, the list was established by CVCRI based on its decades of expertise in the field and immense market research data. It is designed to commend institutions and individuals who have made positive contribution to China’s VC industry to the society as a whole, and was jointly announced by world leading investment platform--Annual Investment Meeting in Dubai. CoStone was awarded 2020 China’s Influential VC institution Top 20, 2020 China's Best Medical and Health Investment Institutions Top 20 and Special Contribution to Shenzhen’s 40th anniversary of Venture Capital Top5.
CoStone Chairman Zhang Wei was honored 2020 China’s Influential VC Investor Top10, and he was also invited to give a speech titled “Embracing Institutional Reform, Investing in China’s Hard & Core Technology”. Zhang Wei said that under the backdrop of confrontation between China and the U.S, technology blockade and the Whole Nation System, the largest technology bubble in China’s history is about to come, but it is exactly such bubble that moves us forward. The STAR market is a vital approach for China to make technological breakthroughs under the Whole Nation System, it is also an important practice of the asymmetrical competition, and is playing an indispensable role in the development of China’s hard & core technology. CoStone has been heavily investing in SenseTime tech, MGI tech, Royole tech and other domestic world-class technology platforms to support the new economy growth of China.
The awarded institutions and individuals will be announced to over 160 countries around the globe through the AIM.
Rewritten by: Xue Guanda, Edited by: Du Zhixin, Li Yunzhen
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026