Chinese tech stocks extend losses on Alibaba price downgrades while Xiaomi sinks on earnings concerns

Name: Tencent narrows kids’ playing time on video games labelled ‘spiritual opium’ by Chinese state media
Uploaded: 2021-11-24T03:00:54.000Z
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Description: Tencent narrows kids’ playing time on video games labelled ‘spiritual opium’ by Chinese state media

Analysts from Deutsche Bank, Nomura and UOB have slashed Alibaba’s price targets following earnings disappointment while Xiaomi crashes on sales miss

Hang Seng Index has lost about 4 per cent over the past week on renewed selling while mainland Chinese traders fled from Hong Kong market sell-off

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A woman walks past a bank’s electronic board showing the Hang Seng Index on Novenber 8. Photo: AP

Zhang Shidong

Published: 11:00am, 24 Nov 2021Updated: 4:30pm, 24 Nov 2021

Chinese technology stocks in Hong Kong fell for a sixth day as more analysts dialled back their optimism on the sector bellwethers amid rising competition and regulatory concerns.

The Hang Seng Tech Index retreated for a sixth day, losing 0.5 per cent at the close of trading on Wednesday. The six-day losing streak is the longest run in about five months. The benchmark Hang Seng Index erased losses, climbing 0.1 per cent from a six-week low. The Shanghai Composite Index added 0.1 per cent.

Smartphone maker Xiaomi sank after third-quarter sales missed consensus forecasts and earnings slumped amid a chip shortage. Alibaba Health Information Technology fell to a two-year low before its earnings report late Wednesday.

Mainland traders have turned net sellers this month as weak earnings from the likes of Alibaba, Tencent Holdings and peers stoked a new wave of selling. Investors worried about earnings setbacks and risk premiums amid regulatory crackdown and pressure to carve out profits to pay for China’s “common prosperity” agenda.

“China equities will remain a challenging market going into 2022, thanks to the ‘shared prosperity’ policy of Beijing,” said Jeffrey Halley, an analyst at Oanda. “I do not believe the process of repricing China equities to reflect that policy is complete.”

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Tencent narrows kids’ playing time on video games labelled ‘spiritual opium’ by Chinese state media

Alibaba, the e-commerce group that owns this newspaper, retreated 0.9 per cent to another record-low close of HK$131.80 as brokers including Deutsche Bank, Nomura and UOB trimmed their price targets for its US-listed securities.