China’s Surging Tech Stock Index Faces Rising Concentration Risk

China’s tech-heavy ChiNext Index is becoming increasingly concentrated as it powers to an 11-year high, buoyed by earnings beats from a small group of heavyweight stocks.

Contemporary Amperex Technology Co., Zhongji Innolight Co. and five others make up nearly half of the ChiNext’s weighting, according to data compiled by Bloomberg. CATL, which accounts for roughly a fifth of the gauge, reported stronger-than-expected results this month, while Zhongji Innolight announced a 262% earnings jump. By comparison, the weighting of the top seven stocks in the benchmark CSI 300 Index is just 20%.