Alibaba Scores 24% Winning Streak as Low Valuation Lures Buyers


(Bloomberg) — Alibaba Group Holding Ltd.’s strong share price recovery hit a pause on Tuesday on concerns of rising bond yields, reversing some of the 24% gain in the last four sessions.

Most Read from Bloomberg

The stock slumped 3.9% in Hong Kong, contributing the most to the losses in the Hang Seng Index, which slid 1.4%. There may be a potential tailwind for bond yields to increase further on expectations of more persistent inflationary pressures, which may weigh on tech, according to IG Asia.

The stock had surged since hitting a record low in Hong Kong on Oct. 5 through Monday, after having “gotten very cheap,” according to James Cordwell, an analyst at Atlantic Equities LLP. Alibaba trades at 17 times forward earnings estimates, compared with a multiple of 24 for Tencent Holdings Ltd. and 38 for JD.com Inc. Tencent shares have gained 7% since a week ago.

A regulatory fine on Chinese food delivery giant Meituan “led to some speculation that we are getting toward the end of some of the regulatory scrutiny the sector has been facing,” Cordwell said. Easing U.S.-China tension and signs of improvement in consumer spending over the Golden Week holiday are also positive developments, he added.

The e-commerce giant has no sell ratings, with 36 out of 38 analysts giving it a buy, according to Bloomberg-compiled data. They forecast shares to rise 51% over the next 12 months versus a 32% and 20% gain for Tencent and Meituan, respectively.

The short-selling volume on its Hong Kong-listed shares hit the highest since January on Monday before retreating on Tuesday.

(Updates prices)

Most Read from Bloomberg Businessweek

©2021 Bloomberg L.P.



Read More:Alibaba Scores 24% Winning Streak as Low Valuation Lures Buyers

2021-10-12 05:52:39

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.