Jan. 12 (NBD) -- Blockchain stocks on the A-share market surged crazily in recent days. 

Prior to this, the entry of Internet giants like Baidu, Alibaba, Tencent, Xunlei, Tianya, and Renren into the blockchain industry sent blockchain-related U.S.-listed China stocks skyrocketing. 

The growth trend subsequently expanded to the A-share market, especially after famous Chinese angel investor Xu Xiaoping delivered an internal message sharing his positive attitude towards the emerging technology.

Blockchain stocks boom 

Xu Xiaoping, founder of renowned angel investment vehicle ZhenFund, issued a post on WeChat last Tuesday encouraging people to embrace and learn blockchain technology. The message soon went viral on the Internet, sparking heated discussions. 

Xu said that the in-house suggestion is based on his long-term observation and thinking, and that he feels obliged to share the conclusion with entrepreneurs. However, he stressed that his attitude toward blockchain has nothing to do with ICO. 

His remarks immediately pushed up prices of blockchain stocks on the A-share market. 

Blockchain stocks jumped by 5.09 percent as a whole on Wednesday, with 11 individual stocks jumping to daily limit. The strong growth continued on the next day, with 16 related stocks being on fire and 8 surging by the daily limit when the market closed. 

Leading blockchain-related company Yi Jian Supply Chain Management Co., Ltd. saw its share price hit the upper daily price limit consecutively between January 8 and 11, reaching a new high since 2017. 

With regard to this, Ma Cheng, chairman of a Shenzhen-based investment management company, told NBD that the boom of blockchain stocks is a result of the peripheral market's optimistic attitude towards blockchain technology. 

Photo/VCG

Securities firms also share bullish view

As for the sought-after blockchain stocks, Chinese securities companies also show a buoyant view. 

China Merchants Securities Co. Ltd. said that the great popularity of bitcoin didn't help bring the blockchain concept into the spotlight last year. But with the arrangement of Internet giants in the blockchain industry, the general public is getting familiar with the emerging technology. 

Currently, blockchain is mainly used to issue digital currency or run points management. It, in fact, has great potentials, but it takes time to explore the possible scenarios. This means it won't be available for large-scale adoption in the short run.  

The securities company suggested that investors need pay more attention to IT firms with strong interest in blockchain technology and applications and screen investment targets based on the latter's technical development capabilities as well as related applications and scenarios. 

Guotai Junan Securities Co., Ltd. pointed out in its research report that the core of blockchain economy is not technology, but the reconstruction of business logic. 

Blockchain will be put into practical application this year, and many wonderful projects are expected to be launched, which accordingly will usher share economy into a new era. 

Wei Xinyuan, senior researcher with Shenzhen-based Windsor Capital, said to NBD that blockchain is just at the conceptual phase now. 

In Wei's opinion, the emerging technology faces two main challenges: first, technical limitations, including power consumption and hashrate consumption, and second, lack of a clear business model.  

Email: lansuying@nbd.com.cn