The blockchain market in China is growing at a rapid pace, and it’s worth becoming familiar with the top 10 blockchain stocks in China.
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.
What’s more, The South China Morning Post reported in July 2018 that over 3,000 Chinese companies had added “blockchain” to their titles since the start of that year, up from 555 total in 2017.
More recently, according to Forbes, 197 blockchain companies were approved by the Cyberspace Administration of China in April 2019. Hangzhou is one of China’s primary blockchain hubs.
Investor interest in the Chinese market has also increased — stretching even to North America — thanks to the launch of Blockforce Capital’s NASDAQ NexGen Economy China ETF (NASDAQ:BCNA) in June 2018.
The exchange-traded fund (ETF) offers US investors exposure and access that otherwise might not exist to China-based blockchain companies. It provides opportunities to enter a market that Blockforce Capital CEO Eric Ervin has described as “undervalued.”
Below is an overview of the 10 top Chinese blockchain stock holdings of the BCNA ETF. They are listed from largest to smallest as of March 2, 2020.
As China is poised for long-term growth in the blockchain industry and is positioned to be a global leader, investors in the space should be familiar with the Chinese blockchain stocks that are driving the market.
1. ZhongAn Online P & C Insurance (HKEX:6060)
ZhongAn Online P & C Insurance is the top company in the BCNA ETF with a 3.49 percent weighting.
The company trades on the Stock Exchange of Hong Kong and was established in 2013. ZhongAn’s primary focus is on developing and selling health, airline and automotive insurance.
2. GRG Banking Equipment (SZSE:002152)
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.
The company’s 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.
3. YGSOFT (SZSE:002063)
YGSOFT was founded in 1999 and has a weighting of 3.06 percent in the BCNA ETF.
The company is known for developing financial and management software products for the electricity industry. Additionally, YGSOFT provides computer software and hardware system integration and technology consulting services.
The company has been recognized as key software enterprise within China’s national planning system.
4. Baidu (NASDAQ:BIDU)
Headquartered in Beijing, Baidu holds a weight of 3.02 percent in the BCNA ETF and was set up 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.
5. JD.com (NASDAQ:JD)
In April 2019, ecommerce company JD.com released a whitepaper on how it is exploring blockchain technology. 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.
The company has already launched blockchain solutions for the pharmaceutical and consumer goods industries, with applications for over 700 brands.
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.
6. Ping An Insurance Company of China (SHA:601318)
Ping An Insurance Company of China has a 2.84 percent weight on the BCNA ETF. It 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.
7. Hundsun Technologies (SHA:600570)
Hundsun Technologies has a 2.83 percent weighting on the BCNA ETF.
The company trades on the Shanghai Stock Exchange and has a primary focus 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.
8. DHC Software (SZSE:002065)
Listed on the Shenzhen Stock Exchange and offering a plethora of technology services, DHC Software serves a wide variety of industries, including healthcare, government, finance, telecommunications and electricity, to name a few.
Founded in 2001 by billionaire Xue Xiangdong, who is co-founder and chairman of the company, DHC holds a weight of 2.82 percent in the BCNA ETF.
9. Aisino (SHA:600271)
Founded in 1994, Aisino is a software technology company that employs almost 18,000 individuals. Its principal operations are centered around value-added tax and integrated circuit services.
Tech giant Alibaba plans to work with Aisino on blockchain solutions to promote growth within the blockchain sector. This project is in tandem with further development of its cloud-computing services.
Aisino operates in over 50 countries worldwide.
10. Alibaba Group Holdings
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.
The company filed a blockchain patent application in January 2018 called “A System and Method That Adjusts Account Balance on a Blockchain” with the China State Intellectual Property Office. Through the patent, the company hopes to improve international transactions through a third party payment vendor.
Alibaba Group Holdings has a 2.72 percent weighting in the BCNA ETF.
This is an updated version of an article originally published by the Investing News Network in 2018.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.