Chinese Internet technology companies Alibaba, Tencent and Baidu reported good quarterly earnings last week, but the performance of the stock market did not reflect this, according to CNBC.
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The value of Tencent’s shares has fallen for four consecutive weeks, and the trend is likely to continue this week. In six months, the value of the company’s shares on the Hong Kong stock exchange has fallen by more than 11%.
Alibaba and Baidu ended the week on a positive note in US trading on Friday, but that was after three straight weeks of declines. “Baidu” has lost almost 6% of its value in six months, while “Alibaba” has lost almost 2%.
However, FactSet analysts expect positive growth and potential double-digit stock appreciation for these companies.
However, this is only a forecast for the future, as the Chinese economy is currently experiencing skidding and instability. Its real estate sector is again suffering financial problems. UBS Bank, which had previously forecast China’s GDP to grow by 5% this year, recently cut it to 4.8%, according to CNBC.
However, Luiss-Vincent Gaivs, the head and founder of the analytics firm “Gavekal”, states that one should not be surprised by concerns about a general crisis in China, as bank shares show stable results. “When we see bank stocks breaking new lows, that’s usually a signal for investors to get out as soon as possible,” he said, noting that was the case in 2007-2008. in the USA and in 2010-2011 in Europe. However, Chinese banking stocks have not broken last October’s lows.
Analysts of the Chinese technology sector at Barclays say that the potential of Tencent, for example, is underestimated. “We believe Tencent is firing on ‘all cylinders’ and its recent strong growth momentum will continue even if the overall economy is slightly weaker than expected,” the report said.
Analysts are also positive about “Baidu” and “Alibaba” and explain the fall in the value of the shares with a common sentiment about the Chinese economy.
Other Chinese technology companies such as “ByteDance”, “Kuaishou” and “NetEase” have also shown good results.
2023-08-30 09:03:41
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