Chinese technology shares jump as Alibaba sales exceed forecasts
Chinese technology shares jumped after strong results from internet companies, including better-than-expected sales at the e-commerce firm Alibaba despite an economic slowdown driven by Beijing’s Covid-19 lockdowns.
The Hangzhou-based company beat analysts’ forecasts with its sales and profit figures for the first quarter despite a weakening economy, and it did better than local rivals such as Tencent. Revenues rose 9% to 204bn yuan (£24bn) in the first three months of the year.
Hong Kong-listed shares of Alibaba leapt almost 12%, a day after its New York-listed shares soared more than 14% to close at $92.48.
Its resilient performance boosted confidence in the sector, which has been battered by a regulatory crackdown over the past year. Hong Kong’s Hang Seng Tech index of the 30 largest technology firms rose 3.6%, while the wider Hang Seng index climbed 2.8%.
Shares in the Chinese search engine group Baidu jumped almost 15% in Hong Kong after it reported a 1% rise in sales, led by its cloud and artificial intelligence business. Shares in JD.com, China’s biggest online retailer, rose more than 5% after it posted an 18% increase in quarterly revenues.
However, Alibaba also warned of the impact of restrictions on its business under Beijing’s zero-Covid policy, and declined to give a forecast for the current year because coronavirus risks clouded the outlook. It said the restrictions affected merchants’ ability to ship goods, and prompted consumers to focus on buying necessities.
Analysts at Daiwa Capital said: “As Alibaba’s large scale reflects the overall macro economy, we believe it is the key beneficiary of a potential favourable policy rollout in terms of lockdown measures and consumption stimulus.”
After two months of Covid
Read more on theguardian.com
