Chinese Tech Stocks Down But Not Out As Sentiment Shifts (FA)
FinanceAsia has noted that Chinese tech stocks have suffered from a shift in sentiment with Cheetah Mobile Inc (NYSE: CMCM), a spin-off from popular Chinese software developer Kingsoft Corporation Limited (HKG: 3888), having to rely on support from shareholders Xiaomi and Baidu Inc (NASDAQ: BIDU) to get its initial public offering over the line earlier this month. In addition and after peaking at $58.32 a share in early March, internet company 58.com Inc (NYSE: WUBA) is down more than 30% while Autohome Inc (NYSE: ATHM) had hit a 2014 high on March 5 of $51.76 and is also down more than 30%. Joaquin Rodriguez Torres, head of technology, media and telecom investment banking for Asia at Deutsche Bank, told FinanceAsia:
“We’re seeing a fairly significant correction out of high multiple, high growth stocks into more value-driven stocks…. The sentiment was very good; high quality companies got people’s attention — people were eager to get access to the management teams and make a positive impression on them. Now the sentiment has changed and even the high quality companies have to make a bigger effort to get investors’ attention.”
However, he latter added:
“Investors are in the business of putting money to work, so now that macro volatility has fallen they need to make real investment decisions — and the reality is that there’s no better way to generate returns than to invest in high-growth companies: companies that are profitable, disruptive and can sustain growth without having to raise more capital. That means tech.”
To read the whole article, China tech down but not out, go to the website of FinanceAsia.