Summary of Key Points
Three A-share companies (Jiuan Medical, Kairun Co., Ltd., and Tangchen Best Health) have recently disclosed their indirect investments in the AI large-model company DeepSeek. Based on the amount of capital they invested and their shareholdings, the market has estimated DeepSeek's post-investment valuation to be around 325 billion to 350.9 billion yuan, which is consistent with previous rumors. This news has led to a short-term increase in the stock prices of these three companies (Jiuan Medical's stock price rose by nearly 50% in five days), but it also highlights the investment risks. Additionally, DeepSeek's financing lineup is impressive, with notable investors such as the company's founder, Tencent, and CATL participating. The founder, Liang Wenfeng, has seen his wealth soar to become one of the richest individuals in the global AI large-model industry. However, some investors are cautious due to lack of transparency in the information.
How was DeepSeek's valuation calculated?
Valuation is actually quite simple: **the amount you invest ÷ the percentage of shares you hold = the total value of the company*. The announcements from these three companies provided the necessary data:
- Kairun Co., Ltd.: Its subsidiary invested 2.9 billion yuan through an intermediary platform, indirectly holding 0.8265% of DeepSeek's shares. This results in a valuation of approximately 350.9 billion yuan (rounded).
- Tangchen Best Health: They directly invested 130 million yuan, indirectly holding 0.04% of the shares, which calculates to a valuation of 325 billion yuan.
The difference of 250 billion yuan between the two valuations is mainly due to rounding of the shareholding percentages or differences in fees charged by the intermediary investment platforms, making the range of 325-350 billion yuan a more accurate estimate.
Although Jiuan Medical invested 750 million yuan, the actual amount paid was not disclosed, so its valuation cannot be calculated accurately without the data from the other two companies.
The “AI investments” of these A-share companies: Profit from rising stock prices, but with significant risks
The purpose of these three companies' investments in DeepSeek is clear: to capitalize on the AI trend, although their actual impact may be limited:
- Stock price reaction: On July 20th, Jiuan Medical's stock hit the daily limit up; Kairun and Tangchen Best Health both saw gains of over 5%, but their prices fell by the end of the day. However, from July 14th to 20th, Jiuan Medical's stock price rose by nearly 50%, indicating market speculation driven by the AI theme.
- Investment details:
- Jiuan Medical: Invested 750 million yuan, holding 0.21% of DeepSeek's shares (a small percentage with no management involvement), and also invested in another AI company called “Yue Zhi Dan Mian”.
- Kairun Co., Ltd.: Invested 40 million yuan, ultimately holding only 0.0114% of the shares.
- Tangchen Best Health: Invested 130 million yuan, holding 0.04% of the shares.
- Risk warnings: All three companies emphasized that these investments have little impact on their financial performance and mentioned potential risks, such as DeepSeek being an early-stage company with uncertain technical paths or facing intense competition (e.g., competing with GPT and Wenxin Yiyan), as well as difficulties in recovering the invested capital and exiting the investment.
How impressive is DeepSeek's financing lineup?
DeepSeek’s financing team is truly star-studded:
- timelines: Financing was rumored in April; in June, Tianyancha reported a Series A round of financing for 51 billion yuan with a valuation of around 330 billion yuan. In July, the company’s registered capital increased, and new shareholders including a national AI fund were added.
- Investors:
- Founder Liang Wenfeng invested 20 billion yuan (the largest single investor).
- Tencent invested 10 billion yuan, and the CATL group invested 50 billion yuan.
- NetEase, JD.com, and IDG Capital each invested 30 billion yuan.
- The National Artificial Intelligence Industry Investment Fund also invested 980 million yuan (indicating government support).
- Next steps: There are rumors of discussions for a Series B round of financing, but no official confirmation yet.
Founder Liang Wenfeng: From AI entrepreneur to the world's richest person in the AI field
DeepSeek’s soaring valuation has significantly increased Liang Wenfeng’s wealth:
- According to the Bloomberg Billionaires Index, his net assets now amount to 36 billion US dollars (about 244 billion yuan), ranking him 63rd on the list globally.
- His wealth has increased by 19.9 billion US dollars since the beginning of this year, equivalent to an increase of over 100 million yuan per day, making him the wealthiest entrepreneur in the global AI large-model industry.
- The reason for his high wealth is his significant stake in DeepSeek; as the company’s valuation rises, so does the value of his shares.
Concerns about investing in DeepSeek: Some recognize its potential but are hesitant
Despite DeepSeek’s high valuation and strong lineup, not all investors are willing to invest:
- An investor who participated in the negotiations stated that DeepSeek uses an “invitation-only” financing model, with many restrictive terms. For example, very little information is disclosed about how the company plans to generate revenue or when it may exit (such as through a public offering or acquisition).
- This investor acknowledged that DeepSeek’s technical capabilities are among the best in the world, but the lack of transparency prevented them from making an investment.
- This highlights the fact that while AI companies can have high valuations, they also carry significant risks, especially for early-stage firms that may spend years without generating profits.
Conclusion
DeepSeek’s valuation has shocked the market and boosted the stock prices of the related A-share companies. However, the underlying risks cannot be ignored. Although the AI sector is booming, investments should be made rationally, as not all high-valued companies will succeed in the long run. For ordinary investors, it’s important to understand the actual amount invested, the percentage of shares held, and the associated risks before following the trend based on stock price movements.
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