As Beijing controls the power of large technology companies, the wealth of e-commerce giants continues to decline.
Alibaba Group Holdings Ltd.’s October rally has given way to another downturn in its share price, while technology rival JD.com is expanding its recovery and winning the favor of analysts.
Deutsche Bank’s Leo Chiang lowered the target price of Alibaba’s Hong Kong stock by nearly 4% on Monday, citing “immediate challenges”, and raised JD’s target price by 16%, noting that “amidst macro uncertainty Elastic growth”.
Morningstar’s Chelsey Tam responded to a similar view in a report on November 19, stating that “Alibaba’s challenge goes beyond the economic cycle” and JD.com provided “clearer information on long-term profit margin improvement”.
At 11:06 on Tuesday morning, Alibaba’s share price in Hong Kong fell 3% to 132.90 Hong Kong dollars, this month’s decline reached 18%, and offset all the increase in October. Although JD.com also fell on the same day, it was in line with the broader market, rising about 46% from the August low.
Ramiz Chelat, senior portfolio manager at Vontobel Asset Management, said that Beijing’s technological crackdown means that Alibaba will have to transfer about 5% of its e-commerce revenue to its competitors, including JD.com and JD.com. Pinduoduo.