Chinese investors digest letdown from Big Tech earnings

BEIJING - From Tencent Holdings to Alibaba Group Holding, China's tech leaders have delivered underwhelming numbers for a quarter beset by economic and geopolitical uncertainty.

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Whether or not they can win back investors may increasingly hinge on the Beijing government's actions.

In call after call with investors, China's internet pioneers described how the uneven economy was undermining their business and clouding the future.

Most offered cautious optimism for how the unprecedented government stimulus unleashed late in the summer would help grease the wheels and pleaded for patience.

But the group that once defied Silicon Valley and defined China's private economy was short on new ideas and ambitious goals.

Just over the past week, the five biggest tech companies erased US$41 billion (S$55.3 billion) in market value, while a gauge of sector stocks listed in Hong Kong has fallen into bear market territory.

On Nov 22, a sell-off in Chinese stocks deepened as concerns over Donald Trump's imminent return to the White House mingled with growing frustration over the pace of Beijing's fiscal stimulus rollout. For investors that were looking to major tech earnings to revive market euphoria, this season now looks like a flop.

The business environment "is not only much worse than five years ago, it's worse than even when China started the Covid-zero policy in 2022", said Natixis chief Asia-Pacific economist Alicia Garcia Herrero. "This sector is obviously supported by China's industrial policies and intent on winning the tech race with the US, but at the same time, it's a problematic sector."

PDD Holdings executives boasted about their cheap hairy crabs instead of offering reassurance for disappointing earnings.