2014.07.03 CoStone Capital Views:
The third CoStone Master Forum was co-hosted by CoStone Capital and Sunriver, a famous tourist destination builder, in Hefei, Anhui. Professor Shi Wei, a marketing expert, was invited to lecture on Marketing in A New Era.
July 02, 2014
The third CoStone Master Forum was co-hosted by CoStone Capital and Sunriver, a famous tourist destination builder, in Hefei, Anhui. Professor Shi Wei, a marketing expert, was invited to lecture on Marketing in A New Era.
Against the New Era, the lectures analysed the changes in the market environment and the market characteristics in the New Era, including the impact of the Internet, the changes in the social structure, and the emerging group of consumers. To cope with these new changes, forward-looking marketing ideas, strategies and methods were also put forward in the Forum.
Marketing in A New Era
Prof. Shi is a columnist at the China Marketing and he shared his insights into the sector of consumer products. Taking ZARA as an example, he explained how its marketing strategy of "replicating" Armani and other world-famous brands, combined with fast design updating and logistics, made it a rapid success.
He also made a comparison between Apple and Sumsung. Apple spent a long period in developing and launching a new product and while Sumsung adopted the opposite strategy. Both of them did the trick in the end, which is quite amazing.
In Prof. Shi's opinion, a great marketing strategy must come from insights into human nature, which is the source of all sorts of unusual but interesting ideas, such as designing smartphones based on gender and developing computers only for children.
Speaker
Prof. Shi Wei
Prof. Shi Wei is a PhD in Management, Partner of China Stone Management Consulting Group, Chairman of Beijing Kesi Enterprise Management Consulting Corporation, and a researcher at the Finance and Securities Institute of RUC. He has been engaged in the consulting of business strategies and marketing and related training since 1995. Being a famous management consulting expert, he has mastery of management theories and is rich in practice. He has provided comprehensive marketing solutions for enterprises including New Hope Liuhe, Midea Group, TCL, Telling Telecom, Aisidi, GoerTek, SLCC Flooring, Jason Furniture and Robust.
Rewritten by Jiang Xiaomei, Edited by Li Yunzhen, Du Zhixin, Wei Yiyi
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