JPMorgan said that China tech stocks are in a 'good buying spot' instead of the regulatory crackdown

JPMorgan-said-that-China-tech-stocks-are-in-a -good-buying-spot'-instead-of-the-regulatory-crackdown

May 12, 2021: -JPMorgan Asset Management is bullish on Chinese technology stocks even though regulators crackdown on internet giants in the mainland.

The shares of major Chinese tech companies like Alibaba,, and Meituan have tumbled as Beijing moved to rein in monopolistic behavior in internet giants.

Howard Wang, head of Greater China equities at JPMorgan Asset Management, says that the regulatory clampdown poses uncertainties in the near term. Chinese tech companies have the potential tail to grow, he said.

“If we look at these fundamentals, and you stretch over a longer period, I think we’re actually in a pretty good buying spot,” Wang told CNBC on Tuesday.

Wang said prices go down in Chinese tech shares because of the regulatory risks or investors rotating out of growth stocks appear overdone. That results in “pretty decent value” in some Chinese tech stocks, he added.

Wang said he likes large tech companies without naming specific stocks given their beaten-down valuation and potential for earnings to grow.

Shares of tech giant Alibaba in Hong Kong decreased by nearly 7.48% this year as of Monday’s close.  E-commerce companies and Meituan have decreased 16% and 10.8%, respectively.

Chinese tech firms are still expected to face a bumpy road in the next few months as the regulatory clampdown keeps going, said Wang. But the crackdown has so far been “rational,” he said.

“From our standpoint as investors, it’s kinda really just hunkering down, regarding the fundamentals, make sure your companies aren’t doing anything that will be unfair market practice,” Wang said.

“I think when we take that into context, it looks like a decent environment to be investing in these stocks. Tough over the next few weeks, but overall, these are the kinds of investments that you’d want to make in China,” he added.

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