Summary of Key Points
On its first day of trading, Yushu Technology's market value soared to 400 billion yuan, causing a collective decline in other embodied intelligence (robotics) companies listed on the A-share market. Some complained that "when one giant rises, everything else falls." However, the author believes this is a good thing. The fatal problem with the A-share technology sector in the past was the inability to acquire true leaders, which forced investors to focus on third-rate or even worthless companies. Now that the leaders have emerged, the true nature of these poor-performing stocks has been revealed, leading to a return to rationality in the market—a sign of a healthy capital market.
I. The "Strange Illness" of the A-share Technology Sector in the Past: Inability to Identify Leaders and the Need to Overhype Substitutes
For many years, the best companies in the A-share technology sector (such as NVIDIA, Apple, ByteDance) were either listed overseas or not at all. Investors, starved for quality options, resorted to "similar companies," "companies with related industries," or even worthless stocks, assigning them the same valuation as top-tier firms. For example, during the boom in online gaming over a decade ago, Tencent and NetEase were listed abroad, while in China, there was only companies like Zhongqingbao. Despite Zhongqingbao's weak R&D capabilities, fund managers would claim the company's chairman had innovative ideas, and some even spread rumors that it couldn't obtain game licenses to boost its stock price. Essentially, there was no real choice, so investors had to overhype whatever was available.
II. The "Catfish Effect" of Yushu's Listing: The Emergence of Leaders and the Exposure of Falsities
Yushu Technology is a leader in the embodied intelligence industry (at least one of them). With its listing, the previously overhyped related companies quickly returned to their true values—because investors could now buy the real leaders. Who would still invest in inferior alternatives?
The author uses an analogy: If NVIDIA or OpenAI were listed in China, the companies that constantly claimed to challenge them would see their valuations plummet. Yushu serves as a reminder that when the real leaders arrive, the fake ones are exposed.
III. Historical Lessons: The Same Old Tricks of Hype from Storm Technology to the ByteDance Phenomenon
- The Humiliation of Storm Technology: During the 2015 privatization wave of Chinese companies, Feng Xin, the chairman of Storm Technology, predicted that overseas top-tier companies would not return to China and would be acquired by domestic lower-ranked firms. His prediction came true when he went to jail and the company was delisted—his goal was merely to boost his own stock price.
- The Absurdity of the ByteDance Phenomenon: Before ByteDance went public, any company associated with it (through cooperation, contracts, or rumored investments) would be wildly hyped in the A-share market. Even if the claims were false, ByteDance never denied them, giving hypesters more room to act. The essence was the same: when the real leader was unavailable, investors turned to substitutes.
IV. Why the Listing of Leaders is a Good Thing: It Forces the Market to Focus on Real Performance
The rule in high-tech sectors is that the value of a leader far exceeds the sum of all the smaller companies. For instance, Google's value as a search engine leader outpaces that of all other search engines combined; NVIDIA's value as a GPU leader surpasses all its competitors. When investors can buy the real leaders, they stop focusing on inferior options. After all, with the "real treasure" within reach, why bother with fake substitutes?
V. The Future Hope: More Leaders on the A-share Market, Ending the Era of Investing in Worthless Stocks
The author hopes that more industry leaders will list on the A-share market in the future. This would lead to:
- Entrepreneurs no longer relying on hype to raise funds.
- smoother exits for venture capital investors in the primary market.
- Investors in the secondary market being able to buy truly valuable companies.
The past practice of investing in worthless stocks when leaders were unavailable was abnormal. Yushu's listing is just the beginning of a change, bringing the market back to a focus on company strength—this is what a healthy capital market should look like.
Final Note: The author has not received any money from Yushu Technology and does not hold any shares (although it’s possible through funds). Their views are based on years of industry observation, not an endorsement of Yushu, but rather an encouragement for a more rational market.