Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
The robust reports on Chinese tech stocks came in the midst of the strict Covid policy in China that has been choking the nation’s economy.
Remarkable reports from Chinese tech giants have influenced an increase in China tech stocks on Friday. Shares of Alibaba (HK: 9988) in Hong Kong climbed 12.45%, Tencent (HK:700) gained 2.33%, and Netease (HK: 9999) surged 3.53%. In addition, JD.com increased 5% to HK$207.20, and WuXi Biologics added 7.6% to HK$54.50. After the over 12% profit, Alibaba traded at its highest since April 29th at HK$93.10.
Chinese Tech Stocks Record Gains
Impressive report cards from tech companies in China are calming investors as Chinese tech stocks record substantial gains. Alibaba announced its Q4 earnings results, revealing that the company performed better than analysts expected. The company stated that its earnings per share for the fourth quarter was 7.95 yuan, equaling $1.18. The earnings were a 204.05 yuan ($30.28) revenue. Meanwhile, earlier predictions were that Alibaba would see 7.31 yuan earnings per share on 199.25 yuan.
With Tencent and Netease also amassing profits, the border Hang Seng index in Hong Kong grew 2.77%, and Hang Seng Tech next added 3.7%. Similarly, mainland Chinese stocks jumped as Shanghai Composite added 0.52% and Shenzhen Component upped 0.449%.
It is safe to say that the Chinese tech stock began to amass profit after Alibaba saw its biggest jump in about a month. In the last quarter ended March 31st, Chinese multinational technology company Baidu (HK: 9888) recorded a 1% increase in revenue to 28.4 billion yuan. The report bounced the market prediction of an addition of 0.8%. Following the announcement, Baidu added 15.1% to $HK133.20.
A China equity strategist at Mizuho Securities, Wang Shenshen, said:
“Chinese tech stocks are exploring the ground floor until the growth story gets clearer. Measures to help the Chinese economy are likely to provide some support for the tech stocks as well.”
The robust reports on Chinese tech stocks came in the midst of the strict Covid policy in China that has been choking the nation’s economy. Bloomberg data states that Hang Seng Tech Index members have lost over US$400 billion in their market valuations in 2022.
China Holds Unprecedented Video Conference on Economy
In order to address the economic situation affected by the pandemic, China held an unprecedented massive video conference on May 25th. Premier of the People’s Republic of China, Li Keqiang, noted that employment, industrial production, electricity consumption, and freight have significantly reduced. He added that the difficulties are more severe in some areas than when the pandemic was at its peak in 2020.
Vishnu Varathan of Mizuho Bank noted:
“Premier Li’s directive for local [officials] to better balance COVID controls against economic growth, which has been cited as key to solving all problems, (from employment to livelihood and COVID containment), paves a path to a promising turnaround.”
For more market news, follow the link.