China AI Healthcare and Infrastructure Get Big Investment from Asia Fund

Value Partners’ Kelly Chung is rotating $490M into Chinese AI hyperscalers, betting on undervalued infrastructure and booming AI healthcare growth.

Kelly Chung, who co-manages the Value Partners Asian Income Fund and the Value Partners Asian Innovation Opportunities Fund, has begun rotating capital out of South Korean and Taiwanese equities into Chinese AI hyperscalers listed in Hong Kong.

The move, however, is not simply a momentum play. Rather, it is a deliberate, valuation-driven strategy, one built on a clear thesis: China’s AI infrastructure investment cycle is still in its early stages, and therefore the upside remains substantial.

South Korea’s tech-heavy Kospi benchmark surged approximately 21% over three months, with shares of SK Hynix a critical Nvidia supplier more than doubling in value. Taiwan’s benchmark similarly climbed 9.2% during the same period. As a result, much of the rally in those markets has been driven by valuation re-rating rather than fundamental earnings growth.

In some regions like Korea and Taiwan, we do see earnings actually upgraded, but the rally has been more driven by valuation re-rating.People may start to actually take some profit because this year has been such a bull market.
Kelly Chung, Chief Investment Officer, Value Partners

Chung’s rotation is not limited to a single sector. Instead, it follows the full AI value chain from infrastructure and computing capacity at the base, all the way up to high-growth application layers, with healthcare AI emerging as the most consequential destination.

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China’s AI healthcare market is expected to grow from approximately $1.59 billion in 2023 to $18.88 billion by 2030, representing a compound annual growth rate (CAGR) of 42.5%, according to a peer-reviewed study published in Biomedical Engineering Letters by Springer Nature in October 2025.

Moreover, growth projections from Frost & Sullivan and Lead Leo Research Institute forecast annual growth rates exceeding 60% in key diagnostic categories including cancer, pneumonia, coronary heart disease, and fracture detection by 2025.

The drivers behind this expansion are both demographic and structural. China’s aging population is placing immense pressure on an already stretched healthcare system. By 2040, those aged 60 and above are projected to number around 402 million people, representing roughly 28% of the total population. Simultaneously, China faces a severe shortage of radiologists, with only approximately one per 70,000 people compared to a ratio of 1:7,000 in the United States, as reported by CKGSB Knowledge.

Tencent’s AIMIS system, operational in over 100 major hospitals, has analysed more than 100 million medical images, achieving diagnostic accuracy of over 97% in conditions such as diabetic retinopathy and colorectal cancer. Beyond imaging, companies such as Neuro-Weave have developed AI-powered early-detection models for Alzheimer’s disease using eye-movement analysis, a technology currently undergoing clinical validation.

Additionally, national health insurance in China covers more than 95% of its 1.4 billion population, providing an extraordinary volume of healthcare data for AI model training and validation an advantage that very few countries can match.

At the national level, the Ministry of Science and Technology (MOST) channels significant annual budgets into AI healthcare through universities, hospitals, and private sector partnerships. Provincial governments mirror this support at the local level. Meanwhile, venture capital adds another layer: notably, 11% of Tencent’s 632 startup investments made over the five years to May 2024 were directed into healthcare, according to CKGSB Knowledge.

Chung’s move is, notably, part of a broader re-evaluation by sophisticated institutional investors. As Bloomberg separately reported in March 2026, Pzena Investment Management a $3.9 billion emerging markets fund has also been increasing exposure to Chinese AI platform companies including Tencent and Alibaba, viewing them as inexpensive relative to their US counterparts and well-positioned to transform daily life.

This convergence of institutional opinion reflects something important: the initial phase of the global AI rally, which heavily rewarded US and Taiwan-linked semiconductor plays, may be giving way to a second phase one defined by application-layer value and infrastructure catch-up, with China at the centre.

The core of Chung’s thesis is straightforward, even if the investment landscape is complex. Chinese AI stocks particularly hyperscalers and healthcare AI players remain undervalued relative to their global peers, their domestic policy environment is supportive to an unusual degree, and the underlying market demand is driven by structural, not cyclical, forces.

The funds she manages have beaten 98% of their peers by staying ahead of these transitions. The rotation toward China’s AI chain, therefore, is not a speculative bet. It is, by every verified measure, a well-researched, data-backed conviction call.