Connect with us

Hi, what are you looking for?

Tech

China’s Next-Generation Tech Firms Hit Hard by Market’s Pullback


A chill has fallen over China’s new generation of tech giants, with stock in former market darlings such as Meituan, Pinduoduo Inc. and Kuaishou Technology dropping by more than one-third from highs reached earlier this year.

The up-and-comers have proved especially vulnerable to a series of shifts in market sentiment, leading their shares to suffer more than more established rivals such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd.

Like technology stocks everywhere, those of newer Chinese companies have suffered as investors have regained their appetite for more modestly valued old-economy businesses. Those stocks are likely to do well as the U.S. and other countries rebound from the pandemic. The Chinese companies are also caught up in an official clampdown on China’s tech sector alongside Alibaba and other big players.

But these are younger businesses that haven’t become solidly profitable. Analysts polled by FactSet expect Meituan, Pinduoduo and Kuaishou to record net losses this year. That means their valuations are disproportionately sensitive to rising interest rates, which reduce the value of faraway profits more than those that will be earned in the near term.

Although everyone is suffering, there is a distinction between China’s profitable and pre-profit tech companies, said Hyde Chen, an equity analyst with the chief investment office of UBS Group AG’s global wealth-management unit.



Source link

Leave your vote

Comments

0 comments

You May Also Like

Politics

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae.

Finance

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

Politics

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Finance

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.