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Deutsche Bank (DE:DBKGn) AG’s Leo Chiang cut his target price for Alibaba’s Hong Kong stock by almost 4% on Monday, citing “near-term challenges,” while raising his target for JD.com by 16%, noting “resilient growth amid macro uncertainties.”
Morningstar Inc.’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% at HK$132.90 at 11:06 a.m. in Hong Kong on Tuesday, taking their decline to 18% 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% from its August low.
Beijing’s tech crackdown means Alibaba will have to shift about 5% of its e-commerce revenue to its competitors, including JD.com and Pinduoduo (NASDAQ:PDD) Inc, said Ramiz Chelat, a senior portfolio manager at Vontobel Asset Management.
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