Alibaba, Meituan drag Hong Kong stocks to a two-week low while JD.com, NetEase gain on index inclusion

Meituan slumped 2.4 per cent before its earnings report on Friday as traders grew wary of poor reports from Chinese tech bellwethers
JD.com, NetEase, China Resources Beer and ENN Energy posted strong gains before their entry into the Hang Seng Index family next month

Hong Kong stock market

Cheryl Heng

Published: 10:20am, 22 Nov 2021

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Corrected [11:10am, 22 Nov, 2021]

[11:10am, 22 Nov, 2021]
Corrects the reporting dates for Meituan and Kuaishou earnings

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Hong Kong stocks fell to near a two-week low as investors absorbed a slew of poor tech earnings and more companies including Meituan and Kuaishou Technology prepare to publish their quarterly report cards.

The Hang Seng Index retreated 0.4 per cent to 24,951.34 at the close of Monday trading. The benchmark lost 1.1 per cent last week, following a series of underwhelming earnings from the tech bellwethers. The Hang Seng Tech Index declined 0.7 per cent while the Shanghai Composite advanced 0.6 per cent.

Alibaba dropped 1.6 per cent to HK$137.10, adding to its worst week on record in Hong Kong trading when the stock crashed 16 per cent after a major earnings miss. Its American depositary shares slumped 12 per cent last week, the most in three months. The e-commerce group is the owner of this newspaper.

The earnings shock has contributed to US$163 billion of erosion in market value last week among Chinese tech stocks represented in the Hang Seng Tech Index and the Nasdaq Golden Dragon China Index, according to Bloomberg data. Investors will look forward to the report cards from Meituan and Kuaishou, later this week. Alibaba reported an 87 per cent slide in adjusted earnings.

The lone bear on Alibaba sees ‘no point catching a falling knife’ as tech investors not rewarded for embracing China risk

Food-delivery platform operator Meituan sank 2.4 per cent to HK$274 before its quarterly earnings on November 26. The firm is expected to post a widening loss of 5.25 billion yuan in the third quarter, from the preceding quarter, according to consensus of analysts tracked by Bloomberg.

Kuaishou pared gain to 2.8 per cent before the short-video sharing platform operator report on November 23. The short-video operator may have incurred a loss of 8.6 billion yuan.

Elsewhere, China’s antitrust regulator on Saturday imposed its latest fines on technology giants for violating anti-monopoly rules, including Alibaba and Baidu, involving unreported deals dating back to years. Baidu retreated 2.1 per cent.

Four stocks advanced before they join the Hang Seng Index family from December 6. JD.com added 1.9 per cent while NetEase surged 3 per cent. China Resources Beer gained 1.1 per cent while ENN Energy rallied 2.6 per cent.

Major Asia-Pacific markets were mixed in early trading. Benchmarks in Australia slipped 0.6 per cent while South Korean equities advanced 1.4 per cent. Stocks in Japan remain little changed.

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