The mainland STAR50 index, which tracks leaders in artificial intelligence and semiconductors, plummeted by 40% in less than four months. This decline wiped out $480 billion in market value from the index.
China's broad blue-chip index fell approximately 20% from its peak in June. Goldman Sachs reported that AI stocks represent 42% of China's market capitalisation and 57% of turnover across mainland-listed A-shares and Hong Kong's H-shares.
The Nasdaq dropped 6% from a record high established three weeks before 26 October. Shares in robot-maker Unitree halved since they began trading in August.
Chipmaker CXMT lost more than a quarter of its value over the past month. Moore Threads Technology and MetaX Integrated Circuits, both chipmakers, saw their values cut in half since July.
Zhongji Innolight and Eoptolink Technology, which manufacture optical parts, are down roughly 60% from highs recorded in June and July. The STAR50 index currently sits at around 100 times trailing earnings, down from a high of nearly 250 times trailing earnings.
By comparison, the Nasdaq 100's multiple is 30. Hong Hao stated, "What's happening is now going to put a stop for many of the companies trying to get themselves listed."
Wu Qing, Chairman of the China Securities Regulatory Commission, met with market participants earlier this month to gather suggestions on improving capital markets. HSBC research indicates that Asia funds remain overweight on China.
Goldman Sachs included CXMT and Innolight among dozens of Chinese AI stocks on a revamped recommendation list earlier this month.
