Home / Business / The value of 10 Chinese tech majors has dropped by more than $800 billion since February.

The value of 10 Chinese tech majors has dropped by more than $800 billion since February.

SHANGHAI — China’s once-famous tech company is losing its glory. Their share price has dropped in the past few months. As investors began to worry about the government’s crackdown on this sector.

The total market capitalization of 10 leading IT and high-tech companies, including Alibaba Group Holding and Tencent Holdings, dropped more than $800 billion, or nearly 30 percent from its February peak.

Science and Technology Innovation Committee It is known as the STAR Board and is home to some of the most prominent technology companies in China. is in the low range

Tencent, which operates the messaging app WeChat, is one of those companies experiencing this issue. On Tuesday, Tencent shares closed at HK$585.5, down more than 20 percent from a record high in February.

Tencent announced on Thursday that The company posted a net profit of 47.7 billion yuan ($7.44 billion) in the January-March period, an increase of 65% from the previous year. In contrast to Alibaba, which posted a net loss during the same period. As major antitrust fines were imposed, Tencent̵

7;s shares remained weak as the government firmly held the company.

In early May, Tencent was ordered to stop illegally collecting app users’ personal data. Alibaba and Ant Group’s finances are under intense government scrutiny. This resulted in the suspension of the company’s registration plan in November.

In addition, Tencent, e-commerce firm JD.com, food delivery platform Meituan and 10 other online platform companies were summoned by the central bank in late April. and was ordered to fully accept the supervision of the Financial Conduct Authority.

Shares in JD, e-retailer Pinduoduo and Meituan, which count Tencent as a major shareholder. It fell sharply along with other tech companies, Alibaba and Tencent investing repeatedly in promising startups. And their growth has increased the market value of the two giants.

The investment bank said Tencent and other stocks were undervalued. But regulatory risks are increasing, GuoDu Securities said, reflecting the prevailing view.

The market share of Alibaba, Tencent, Meituan, JD and Hong Kong-listed short video app operator Kuaishou dropped 20% to 40 percent from Feb. 17 for a total of around HK$13.5 trillion. ($17.4 billion) ), a slight decrease of more than HK$5.1 trillion.

As the combined market capitalization of Pinduoduo, search giant Baidu, financial services platform Lufax, video-streaming site Bilibili and U.S.-listed gaming platform NetEase dropped by about $150 billion over the same period, the 10 companies saw a decline of about $150 billion. that their market capitalization has shrunk to a total value of $801 billion.

In contrast, shares in Apple and the American IT giant are trading solid.

But China’s reach is still felt in US mutual aid provider Waterdrop. Listed on the New York Stock Exchange on May 7, it currently trades at $7 per share. Compared to its IPO price of $12, Tencent holds a 20% stake in Waterdrop.

Lufax also offers below IPO prices as a core business. Lufax, like Ant Group, refers to applying for loans with banks and earning a commission from them. But financial regulators are urging Lufax to reduce its service, citing increased financial risks. The company is planning to increase its lending. This has aroused investor concerns about loan defaults and interest rate risk.

Against the backdrop, ByteDance, owner of short video TikTok, said in April it planned to list some businesses. Several analysts said the company made the decision after taking into account the regulatory risks and falling into the valuation of its stock.

Foreign investors are turning to RMB bonds that offer higher yields than developed countries. More than 3.6 trillion yuan was pumped into those assets by the end of April. An increase of almost 60% from the previous year. Most of these bonds are government bonds and bonds issued by state banks.

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