2019.01.03 CoStone Capital Views:
CoStone Capital has always been socially conscious and actively involved in the country's poverty alleviation strategy. CoStone Capital donated $0.3Mn to support the poverty alleviation project of “Photovoltaic Farm” in Fenxi, Shanxi Province in 2018, as an active response to the call of Asset Management Association of China (AMAC) . This poverty reduction project was expected to generate more than ¥2.8Mn of income each year and help about 800 households to get rid of poverty.
A Thank-you Note from AMAC to CoStone Capital
CoStone Capital has always been socially conscious and actively involved in the country's poverty alleviation strategy. CoStone Capital donated $0.3Mn to support the poverty alleviation project of “Photovoltaic Farm” in Fenxi, Shanxi Province in 2018, as an active response to the call of Asset Management Association of China (AMAC) . This poverty reduction project was expected to generate more than ¥2.8Mn of income each year and help about 800 households to get rid of poverty.
A few days ago, we received a thank-you note for the good deeds of CoStone Capital from AMAC. As a firm of social responsibility, CoStone Capital will continue to fulfill corporate social responsibility and support social welfare undertakings.
The following is the original text of the Association's thank-you letter:
CoStone Asset Management Co. Ltd:
Proposed by Asset Management Association of China (hereinafter referred to as the "Association"), and co-sponsored by 35 member companies, power station building of Fenxi PV (Photovoltaics) Farm project has been completed on June 30th, 2018 and connected to a power grid. This project started to play its role in poverty alleviation. After eight poverty-reduction projects of PV Farm at the township level are completed, it’s predicted to generate revenue exceeding ¥2.8Mn. That will help poor households in poverty alleviation and provides strong support to poverty alleviation efforts of Fenxi.
PV Farm project has received ¥23.55Mn in donations from 35 member companies of the Association. Capital that has been used and planned to be used amounts to ¥20.6Mn, among which the construction of power stations of PV farms would cost ¥16.8Mn at a rough estimate, the farm that is below PV would cost $2.9Mn (which is covered in the funding package of county government) and the cold storage that relies on the construction of Sengnian’s PV farm would cost $0.9Mn (which has been basically completed).
CoStone Capital has reacted positively to the proposal of the Association and given a generous donation of ¥0.3Mn to support “PV Farm” project. We have a profound sense of gratitude and respect for all CoStone Capital does to fulfill corporate social responsibility and engage in national poverty alleviation. We hope you will support poverty relief in Fenxi as always, and join our hands to achieve our goals of poverty elimination in 2019.
Asset Management Association of China
2019/01/03
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