Wall Street bullish on recovery of China’s tech Alibaba, Tencent, Baidu
China’s big tech firms are reporting mixed financial results, but analysts remain bullish on their prospects despite potential geopolitical risks. Baidu beat earnings estimates for Q1 2023, while Tencent bounced back after consecutive negative and flat quarters. However, Alibaba missed revenue expectations, with its domestic commerce unit down 3% and its cloud business down 2%, causing its Hong Kong-listed shares to fall almost 5%. Analysts expressed optimism over Alibaba’s plans to spinoff its cloud business as a separate, public traded company, as well as list its logistics and grocery divisions. E-commerce is recovering, although not as fast as hoped, with the travel industry strong and goods starting to pick up.
FAQs
What are China’s big tech firms reporting for their latest earnings?
Baidu beat earnings estimates for Q1 2023, while Tencent bounced back after consecutive negative and flat quarters. However, Alibaba missed revenue expectations, with its domestic commerce unit down 3% and its cloud business down 2%.
Are analysts optimistic about these tech firms’ prospects?
Yes, analysts remain bullish on Chinese big tech firms despite potential geopolitical risks.
What is Alibaba’s plan for its cloud business?
Alibaba plans to spinoff its cloud business as a separate, public traded company, as well as list its logistics and grocery divisions.
Is e-commerce recovering in China?
Yes, although not as fast as hoped. The travel industry is strong and goods are starting to pick up, with attractive pricing expected to drive demand during the upcoming 618 shopping festival.
Alibaba, Tencent, and Baidu’s Tech Recovery Receive Bullish Support from Wall Street
China’s big tech firms, including Baidu, Tencent, and Alibaba, have seen uneven recoveries in their latest earnings results, but analysts remain bullish on their futures. Baidu reported better-than-expected revenue and profits for Q1 2023, while Tencent bounced back to growth after consecutive negative and flat quarters. Alibaba, however, missed revenue expectations, with concerns raised about a potential lack of a strong consumer spending rebound. The company’s shares dropped by almost 5%, with analysts attributing this to investors’ geopolitical concerns, including possible sanctions against China. Despite this, analysts expressed optimism about Alibaba spinning off its cloud business and listing its logistics and grocery units separately. They feel this strategic move will have a positive effect on the value of the firm. There are also indications that China’s economy is recovering, but e-commerce is only picking up slowly. Analysts predict demand will be driven by attractive pricing during the 618 shopping festival, which takes place on June 18, one of China’s most important shopping festivals.