JPMorgan boosts China’s tech sector and says it’s time to buy this stock
JPMorgan boosts US investment analysts have upgraded the ratings of seven Chinese internet companies. Including Tencent, Alibaba, Meituan, NetEase, and Pinduoduo, to overweight from underweight. This indicates that they believe these stocks can outperform the average total stock return in the analyst range over the next six to 12 months.
In a note issued on Monday, Chinese bank internet analyst Alex Yao. And his team said “significant uncertainty should start to recede” due to the recent regulatory announcements, which came earlier than expected.
Digital entertainment, local services, and e-commerce will be the “first stack with better results,” the bank said.
“We believe the sector’s key risks have eased, particularly related to regulatory risks. ADR elimination risks, and geopolitical risks,” said analysts at JPMorgan. In March, Yao also a team said they viewed the sector as “non-investment” for the next six to 1 year. A call that Bloomberg later announced was incorrectly released. JPMorgan’s Yao did not immediately respond to news request for comment on the allegations made in the Bloomberg report.
Even before the bank’s call in March, China’s internet stocks were declining nail by months of regulatory uncertainty also concerns about supply chain disruptions due to the continent’s harsh Zevid-Covid policies.
Concerns about the environment for higher interest rates as major central banks seek to curb simmering inflation are also looming over the broader technology sector globally. Rising interest rates tend to make future profits less attractive to growing companies.
Wall Street’s tech Nasdaq Composite was down more than 25 percent on Monday.