PIAIF - 10 Blockchain Stocks in China

While the Chinese government has no qualms about banning cryptocurrencies , the country’s stance on blockchain technology is different, allowing blockchain stocks in China to flourish.

It is China’s goal to become a global leader in the industry, and President Xi Jinping praised the technology at a conference in May 2018.

“The new generation of information technology represented by artificial intelligence (AI), quantum information, mobile communication, internet of things, and blockchain is accelerating breakthroughs in its range of applications,” he said .

The Chinese government is also embracing blockchain as a way to strengthen its cybersecurity infrastructure. Analyst Kai von Carnap of the Mercator Institute for China Studies recently commented that “as of 2020, blockchain applications for government services represented more than one fourth of all blockchain applications developed in China, and many of the 400 or more policies published by national ministries as well as provincial and city governments support this development.”

What’s more, nearly 27,500 new Chinese companies used blockchain in 2020, up 52 percent from 2018. The publication attributes this dramatic increase in part to Xi’s endorsement of the technology.

Of course, the ban on cryptocurrency trading in China means that the many of the nation’s blockchain firms have lost out on the big gains the emerging sector has made in the past few years. However, as Bloomberg highlighted in mid-2021, that’s allowed China’s blockchain companies to predominantly remain “relatively unscathed” by market fallout associated with trading in digital tokens.

And interestingly, China hasn’t fully turned away from digital currency — the People’s Bank of China is developing its own digital version of the yuan, which it will control.

With China poised for long-term growth in the blockchain industry and positioned to be a global leader, investors in the space should be familiar with the Chinese blockchain stocks that are driving the market.

Below is an overview of 10 blockchain stocks in China. The companies are listed from largest to smallest in terms of market cap, and all data was accurate as of June 2, 2021.

1. Alibaba Group Holdings (HKEX: 9988 ,NYSE:BABA)

Market cap: CNY 4.6 trillion

Alibaba Group Holdings is an ecommerce, retail, internet, AI and tech company with a focus on providing consumer, business and sales services through the internet, as well as electronic payment services.

Alibaba tops this list of blockchain stocks in China, and with its affiliate Ant Group holds the largest amount of blockchain patents in the world — a total of 2,298 as of 2020.

2. Ping An Insurance Company of China (HKEX: 2318 ,OTC Pink:PIAIF)

Market cap: CNY 1.55 trillion

Ping An Insurance Company of China became the first Chinese company to join the R3 blockchain consortium back in 2016 . R3 is a firm working on how blockchain can be applied in the financial markets.

In 2018, the company revealed the Ping An Smart City White Paper, which promotes technologies like AI, big data, cloud computing and, of course, blockchain. In 2020, Ping An filed the largest number of blockchain-related patents for the year at 1,215 blockchain patent families.

3. JD.com (HKEX: 9618 ,NASDAQ:JD)

Market cap: CNY 938.31 billion

Ecommerce company JD.com launched a blockchain platform in 2018. Through its fintech arm, JD Finance, the company is focusing on five areas in blockchain: value innovation, supply chain, trusted networks, digital evidence storage and financial technology.

JD.com has already launched blockchain solutions for the pharmaceutical and consumer goods industries, and is working with China’s central bank on cryptocurrency advancements.

Additionally, the company has issued asset-backed securities on the blockchain. The underlying assets are based off of the accounts receivable of Baitiao, JD.com’s consumer loan service company.

4. Baidu (HKEX: 9888 ,NASDAQ:BIDU)

Market cap: CNY 546.28 billion

Headquartered in Beijing, Baidu was established in 2000. The company’s area of expertise is internet-related services and products and, most importantly, AI. Baidu is known for being one of the world’s largest AI and internet companies across the globe.

Additionally, Baidu’s search engine is the fifth largest website in Alexa’s internet rankings. The company offers a blockchain-as-a-service platform and is patenting a blockchain technology for payment security.

5. Hundsun Technologies (SHA: 600570 )

Market cap: CNY 93.11 billion

Hundsun Technologies is primarily focused on software products and services, in addition to data for financial entities, mostly in mainland China, Japan, the US and Hong Kong.

Hundsun Technologies invested in blockchain in 2017, when it formed a strategic partnership with startup Symbiont, a company that provides smart contracts for institutional blockchain applications.

Jack Ma, founder of Alibaba — a company whose blockchain activities are discussed above — invested US$532 million in Hundsun Technologies back in 2014 .

6. ZhongAn Online P & C Insurance (HKEX: 6060 )

Market cap: CNY 58.35 billion

ZhongAn Online P & C Insurance, China’s largest online-only insurance company, is developing its own blockchain-based insurance process. The company partners with product distribution companies to sell supplementary insurance, like shipping returns and damage cover.

ZhongAn was established in 2013 by three co-founders Jack Ma of Alibaba, Tencent’s (HKEX: 0700 ) Pony Ma and Ping An Insurance’s Mingzhe Ma.

7. GRG Banking Equipment (SZSE: 002152 )

Market cap: CNY 29.92 billion

GRG Banking Equipment is focused on researching, developing, manufacturing and distributing automatic currency processing equipment and system software. Its products include automatic teller machines (ATMs), automatic fare collection systems and money sorters. GRG Banking Equipment has dominated the ATM sector in China for more than a decade.

The company is integrating AI applications aimed at finance, transportation, security and convenience retail. Its dip into the blockchain space includes introducing ATMs that provide exchange services for cryptocurrencies backed by blockchain. It has also created a digital asset management system, a blockchain-based VIP identity authentication system and a hard wallet.

8. Aisino (SHA: 600271 )

Market cap: CNY 23.38 billion

Founded in 1994, Aisino is a software technology company that employs almost 18,000 individuals. The company operates in over 50 countries worldwide, and its principal operations are centered around value-added tax and integrated circuit services.

Tech giant Alibaba has collaborated with Aisino on blockchain solutions, including a blockchain technology lab for the development of cloud computing, electronic invoice and credit services.

9. DHC Software (SZSE: 002065 )

Market cap: CNY 23.08 billion

Founded in 2001 by billionaire Xue Xiangdong, who is co-founder and chairman of the company, DHC Software offers a plethora of technology services to a wide variety of industries, including healthcare, government, finance, telecommunications and electricity.

10. YGSOFT (SZSE: 002063 )

Market cap: CNY 9.67 billion

YGSOFT was founded in 1999 and is known for developing financial and management software products for the energy industry. It also offers a cloud platform, as well as big data and blockchain services.

YGSOFT is advancing blockchain research and development alongside the application of blockchain technology in enterprise management, smart energy and the internet of things. The company has been recognized as a key software enterprise within China’s national planning system.

This is an updated version of an article originally published by the Investing News Network in 2018.

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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.