Shares of major Chinese tech giants hit 52-week lows

Shares of Chinese big tech firms, including Alibaba, Tencent, Meituan, Pinduoduo, and Bilibili, hit 52-week lows, driven by concerns over the deepening Ukraine-Russia conflict and risk of further regulatory pressure from Beijing.

E-commerce giant Alibaba closed down 5.17% at HK$99 on the Hong Kong Stock Exchange, down 68% from its peak.  Tencent, China’s largest social networking and gaming company, down 3.72% to HK$403.2, a 46% drop from its all time high, while Meituan, China’s largest food delivery platform, fell 5.4% to HK$164.8, a 65% drop from its high.

Nasdaq-listed streaming company Bilibili closed down 8.35% to $25.26, down 84% from its peak, while Pinduoduo, a Nasdaq-listed e-commerce company targeting low-income people, closed down 8.74% to $41.27, down 81% from its peak.

The Hang Seng Tech Index, which tracks China’s biggest technology companies, meanwhile, tumbled 4.4% to a record low.

In the past year, China’s tech sector has been dragged down by regulatory uncertainties, but in the relatively quiet fourth quarter, some US institutional investors, including BlackRock, Daily Journal, and Bridgewater, have raised their bets on the sector, saying that China would be a good contrarian play in 2022.

However, when markets were thinking that the worst-case scenario had gone away, a crackdown over the food delivery industry once again trigger another round of selloff in Chinese tech firms. Meituan’s stock dropped more than 14% last month after Chinese authorities ordered online food delivery platforms to reduce service fees to assist catering firms to save expenses.

Photo by Mark Basarab on Unsplash