A statement was made on May 30, 2021, stating that China tech businesses are shedding their glamor, with their company profits dropping in recent months as shareholders became concerned about state crackdowns in the industry.
From a pinnacle in February 2021, the total market valuation of ten key IT and high-tech businesses, including Alibaba Group Holding and Tencent Holdings, has dropped by over $800 billion, or about 30%.
The Science and Technology Innovation Board, often known as the STAR board, is presently resting in a short level, housing some of China's most notable IT enterprises.
Tencent, the company behind the messaging software WeChat, is one of the corporations that has seen its fortunes change. Tencent shares closed at 585.5 Hong Kong dollars on May 25, 2021, down and over 20% from their February peak.
Tencent generated a revenue of 47.7 billion yuan ($7.34 billion) in the first quarter of 2021, up 65 percent from the same time the previous year. In comparison, Alibaba, which suffered a huge reduction over the same time as a result of massive regulatory penalties, suffered a significant loss. Tencent's stock, meanwhile, has remained sluggish as the administration has tightened its hold on the corporation.
Tencent was previously warned to stop illegally collecting confidential info from its app users in May. Alibaba and its financial subsidiary, Ant Group, have also been subjected to severe regulatory investigation, with the latter's preparations for a public offering being halted in November.
In late April, the banking sector subpoenaed Tencent, e-commerce business JD.com, food-delivery service Meituan, and ten other internet site businesses, instructing them to completely embrace financial authorities' oversight.
JD, Pinduoduo, and Meituan, which have Tencent as key stakeholders, have all seen their stock prices plummet along with those of other internet companies. Alibaba and Tencent have financed outstanding startups on a regular basis, and their rise has boosted the two companies' stock prices.
Financial institutions think Tencent and other stocks are presently inexpensive, but operational risk, according to GuoDu Securities, is placing a ceiling on any gains.
Alibaba, Tencent, Meituan, JD, and short video app provider Kuaishou, all of which are listed in Hong Kong, have had their stock price decline by 20% to 40% since February 17. They now amount to roughly HK$13.5 trillion ($17.4 billion), down somewhat more than HK$5.1 trillion.
The joint market capitalization of Pinduoduo, Lufax, Bilibili, and NetEase, all of which are listed in the United States, fell by $150 billion in the corresponding period, resulting in a total loss of $801 billion. Apple and other American IT behemoths, on the other hand, are moving steadily.
