China stocks in US slide as Alibaba adds to earnings woes

[NEW YORK] US-listed Chinese stocks slumped for a second straight day on Thursday (Nov 18) as lacklustre guidance from one of China's largest companies furthered soured investor sentiment.

The Nasdaq Golden Dragon China Index fell 3.2 per cent, adding to Wednesday's (Nov 17) drop, as Alibaba Group Holding plunged 11 per cent after its revenue outlook for the 2022 fiscal year came up short of analyst estimates.

Other companies that reported results this week like video-streaming platform operator Bilibili and online discount-retailer Vipshop Holdings fell by more than 17 per cent each, dragging the gauge lower.

The e-commerce behemoth's worse-than-expected outlook adds to what has been an extraordinarily trying year for Chinese stocks. A sweeping regulatory crackdown in Beijing and a resurgence in Covid-19 cases across the country has created a difficult operating environment for many of the nation's firms.

"There has been the growing concern that the domestic consumption transition for China is not as strong as they would like it to be," said Ed Moya, senior market analyst at Oanda Corp.

Other Chinese stocks listed in the US are reporting similarly troubling results this quarter.

Last week, Tencent Holdings reported its slowest revenue growth since 2004. Forty companies tracked by Bloomberg on the Golden Dragon index have missed analysts' earnings forecasts by an average of nearly 4 per cent.

Meanwhile, JD.com stands as one of the few US-listed Chinese stocks to deliver numbers above expectations.

The e-commerce firm jumped 6 per cent on Thursday (Nov 18) after announcing its revenue had increased nearly 26 per cent versus last year as investments into newer business areas helped offset the impact from slowing consumer spending.

Some companies that have reported strong results are still getting punished this quarter. American depositary receipts for Baidu have shed about 4.6 per cent even as the search engine giant announced a 13 per cent jump in sales Wednesday (Nov 17) morning.

The selling pressure has also been felt in Hong Kong, with the Hang Seng Tech Index, which tracks China's biggest technology companies, falling 3 per cent on Thursday.

BLOOMBERG