(Bloomberg) — Chinese technology stocks rose as robust earnings from major e-commerce companies helped ease concerns about weak consumption.
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The Hang Seng Tech Index (HSTECH.HK) rose as much as 2.2 percent, poised for its best day of August. JD.com Inc. (JD) contributed about a third of the index’s gains after shares rose more than 9 percent following a sharp earnings beat. Alibaba Group Holding Ltd. rose over 4 percent as traders focused on the positive elements of mixed results.
The current earnings season is seen as crucial to reviving China’s stock market after key indicators crashed from a May high due to an economic malaise and lack of policy support. While China’s tech giants are crumbling under the weight of fragile consumer sentiment, the results were solid enough to lure buyers back after the Hang Seng Tech indicator fell close to a bear market.
“Macroeconomic conditions are clearly weak, but a general observation is that margins are holding up and companies are controlling costs well and beating earnings across the board, especially JD,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “For Chinese equities, expectations are very low and valuations are low.”
Tencent Holdings Ltd. (NNND.VI, NNN1.BE, NNND.HA, NNND.MU, NNND.SG), which reported its results on Wednesday, managed to beat expectations by a wide margin, although revenue fell slightly short. JD.com reported revenue and adjusted profit that beat expectations, while Alibaba presented a mixed picture: net profit fell 27% and revenue growth varied across segments.
Baidu Inc. and Meituan will announce their results later this month.
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