Alibaba stock slides towards record low while investors bet on JD.com

[HONG KONG] Alibaba Group Holding's October rally has given way to a renewed slump that has the stock heading for a record low while technology rival JD.com is extending its recovery and winning favour with analysts.

Deutsche Bank's Leo Chiang cut his target price for Alibaba's Hong Kong stock by almost 4 per cent on Monday (Nov 22), citing "near-term challenges", while raising his target for JD.com by 16 per cent, noting "resilient growth amid macro uncertainties".

Morningstar's Chelsey Tam echoed similar views in a Nov 19 note, arguing that "Alibaba's challenges go beyond the economic cycle" and that JD.com offers "more clarity on the long-term margin improvement".

Alibaba shares were down 3 per cent at HK$132.90 as at 11.06 am in Hong Kong on Tuesday (Nov 23), taking their decline to 18 per cent this month and more than wiping out all of October's gains. While JD.com was also down on the day, in line with the wider market, it is up about 46 per cent from its August low.

Beijing's tech crackdown means Alibaba will have to shift about 5 per cent of its e-commerce revenue to its competitors, including JD.com and Pinduoduo, said Ramiz Chelat, a senior portfolio manager at Vontobel Asset Management.

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