The China tech rally that started after the country re-opened its border ended this month. The rally started in Nov. 2022 and accelerated when the Chinese Communist Party eased regulator rules against tech companies.
In Feb. 2023, China approved 87 new video games. This lifted Tencent Holdings (TCEHY) stock. The rebound proved short-lived. TCEHY stock could not break out above $50. E-commerce firm Alibaba (BABA) attracted buyers when the company said it would split into six units. Bullish investors thought that Alibaba had more value in the sum of the parts measure. They failed to realize that a split-up firm is smaller and therefore weaker.
Alibaba stock peaked at $120 when the rally stalled in January. It tried to re-take the $100 level, only to close last week at $89. JD.com (JD), which has good value and growth, is in a firm downtrend. The company committed to a yearly dividend schedule. However, the dividend of $0.62 a share does not offset the over $5 drop since the dividend declaration.
Baidu (BIDU), a search engine giant, continued to progress in self-driving software and artificial intelligence. Unfortunately, the CCP’s censorship rules prevent Baidu from growing its AI. Markets are discounting BIDU for the limited AI growth ahead.
