Chinese tech stocks edge upward as Shanghai takes re-opening steps
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Numerous Chinese tech stocks rose Monday as reports surfaced regarding Shanghai easing Covid-19 restrictions in the city and an J.P. Morgan analyst Alex Yao raising his ratings on the shares of companies such as Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU) and JD.com (JD).
Yao raised his ratings on Alibaba (BABA), Tencent (OTCPK:TCEHY), PinDuoDuo (PDD), NetEase (NTES), iQiyi (IQ), Dada Nexus (DADA) and Dingdong (DDL) to overweight, and lifted his views on JD.com (JD), Baidu (BIDU) and BiliBili (BILI) to neutral. Yao said he made the moves because "Stage Two" of his investment model for the sector is advancing sooner than expected.
Among the factors behind Yao's upgrades were statement from Chinese government agencies about relaxing more than a year of regulatory pressure on the country's tech sector. Yao also said that the Covid situation of this year "will impact earning differently" relative to 2020, when the pandemic spread around the world.
Additionally, Reuters reported that China's biggest city, Shanghai, will start reopening many businesses that have been under lockdown, or restricted operations, due to a recent rise in Covid cases in the region in recent weeks.
Among the stocks that Yao upgraded, iQiYi (IQ) shares climbed almost 15%, PinDuoDuo (PDD) edged up by 0.3% and Baidu (BIDU) also rose 0.7%. Tencent (OTCPK:TCEHY) ended the day off by 2% and Alibaba (BABA) slipped by 1.6%.
The KraneShares CSI China Internet ETF (KWEB) edged up by 0.2%.
Chinese ride-sharing leader DiDi Global (NYSE:DIDI) broke eve, as it following reports last week that it is facing more issues related to its plans to delist its shares from New York and list on the Hong Kong Stock Exchange.