https://www.scmp.com/business/artic...t-says-chinese-tech-stocks-rout-persist-until Business The lone bear on Alibaba and Tencent says Chinese tech stocks’ rout to persist until China can enunciate end of crackdown For the sector to hit bottom and potentially recover, the government needs to restore the trust among global investors, Muhl at DZ Bank says China remains ‘a classic stock picker’s market,’ says Capital Group, which manages about US$2.6 trillion of assets Topic | Alibaba Cheryl Heng + FOLLOW Published: 10:24am, 19 Aug, 2021 Why you can trust SCMP Advertisement The trillion-dollar rout afflicting Chinese technology stocks may not end until China’s government restores investors’ trust in the securities, as shareholders had been left defenceless by the aftermath of unexpected regulatory crackdowns. That is the view of Manuel Muhl of DZ Bank, a Frankfurt-based lender, who downgraded China’s internet platform sector last month, making him the only analyst globally with a “sell” rating on the industry torch-bearers Alibaba Group Holding and Tencent Holdings . Alibaba owns the Post. A loss of trust due to corporate governance lapses in the case of Didi Global , and tightening regulations in China’s internet economy from e-commerce to for-profit off-campus tutoring have thrown a wrench into fundamental stock valuation models. “For the sector to hit bottom, and potentially recover, the government needs to restore the trust that it has destroyed,” Muhl said in an interview. “This can only be achieved by reaching a point where they can publicly state that their crackdown has reached its goal and that they are done for now. When will that be?” Alibaba, the biggest Hang Seng Index constituent, slumped 5.5 per cent to HK$162.10 on Thursday, its lowest level since its 2019 listing. Tencent retreated by 3.4 per cent to HK$421.20 after warning shareholders against slowing growth amid increased regulatory scrutiny. The Hang Seng Tech Index lost 2.8 per cent. READ FULL ARTICL e
I made a sticky of a comment by one Wu Xuao... "China to experience months-long correction". That was June 16. Suggest keeping that in mind if one is tempted to "dive in on the cheap prices" at this time. “...For the sector [tech] to hit bottom, and potentially recover, the government needs to restore the trust that it has destroyed. This can only be achieved by reaching a point where they can publicly state that their crackdown has reached its goal and that they are done for now. When will that be?” -- Manual Muhl, DZ Bank
Chinese bear to persist till the chart says it is no longer bearish. But then, it might not be obvious from the chart.