A Hidden Opportunity in the Wake of the DeepSeek Craze

Who will benefit from the AI surge

This is something that’s increasingly been on my mind over the past few weeks, and I just wanted to bring it to your attention. It’s not a fully fleshed-out article, but it should be enough for you to do your own due diligence.

Introduction

While the West is fixated on how DeepSeek has upended Silicon Valley’s tech aristocracy, China is quietly staging its own revolution—one that involves state-owned enterprises (SOEs), provincial governments, and even oil giants suddenly acting like caffeinated startups. The twist? They’re all scrambling for talent, not just GPUs.

Provincial governments and SOEs

Now, state-owned enterprises and provincial governments aren’t exactly known for being overly progressive. Yet, every day, they’re piling into AI. Every hour brings a fresh headline: a province automating its bureaucracy with DeepSeek, an oil SOE revamping drilling operations with proprietary AI. What we’re seeing isn’t just a trend—it’s a full-on scramble. And it’s sparked a war for talent, with SOEs and companies fighting for software engineers and data scientists. So fierce is the competition that state media has even had to intervene, urging companies to “play nicely, children.”

Enter Tongdao Liepin (HK: 6100)

Here’s where things get interesting. Tongdao Liepin, a Chinese online recruitment platform focused on high-quality white-collar talent (think MBAs, engineers, and PhDs), has been struggling in recent years. Its stock price? Down 90+%. Why? Well, because during the tech crackdown, the demand for high-end talent dried up. Companies scaled back their hiring, and Tongdao Liepin’s competitors—Boss Zhipin , 51job, and even Kuaishou—thrived by focusing on blue-collar roles. The workers you’d call when your dumplings are late.

But, as the tide turns, Tongdao finds itself in a sweet spot. Suddenly, SOEs and AI-hungry firms are desperate for the kind of top-tier talent Tongdao has on its platform. And despite its struggles, Tongdao remains profitable, with a balance sheet solid enough to make a Ming vase jealous (price-to-net-current-assets: 1.45). True, their capital allocation is a nightmare; after speaking with management and investor relations several times over the years, I’m still not impressed. But at this price? We’re not buying into their vision—we’re buying a mispriced lever to China’s AI talent boom.

Tongdao Profits Twice from AI

First, Tongdao stands to benefit as demand for its highly educated talent skyrockets. Second, Tongdao is using AI itself to streamline its operations, improving efficiency and positioning itself better in this new AI-driven landscape. It’s a nice double play: the company is both providing and using AI to fuel its own recovery.

The Bottom Line

Tongdao Liepin isn’t without its flaws, but with state-owned enterprises now aggressively competing for top-tier talent, a platform that sits at the heart of China’s talent pool becomes increasingly valuable. It’s a contrarian play, but for those willing to take on some risk, it could present a solid opportunity in a market that’s shifting rapidly.

Stay sharp (and do your own diligence)