Recently, the share prices of Chinese e-commerce giants Jindo, Jingdong and Alibaba have fallen from their highs, quite harshly, with the average drop of 40.56% for the three stocks. In addition, Meituan’s share price has recently experienced a “ninth consecutive drop”. Some analysts believe that the anti-monopoly control pressure from the Chinese Communist Party authorities is one of the reasons for the plunge of Chinese e-commerce stocks.
China Fund News reported on May 16 that from its high in February this year, shares of Poundland and Jingdong have fallen in a waterfall fashion, from $212.6 to $118.33 in just a few months. Poundland is the largest e-commerce platform in China.
Jingdong Group’s Hong Kong shares also went from a high of HK$422.8 to HK$268.2 today, and U.S. shares of Jingdong fell from $108.29 to $68.15 today. Pindo and Jingdong’s highest prices came down by a maximum of 47% and 38% respectively (Jingdong US and HK shares).
Alibaba’s decline started even earlier, starting all the way down after surging higher in late October last year. Ali’s U.S. shares fell from $319.32 to $209.51 today; Hong Kong shares fell from HK$309.4 to HK$204.6. Ali’s market capitalization is large, and both the U.S. and Hong Kong shares have fallen 35%.
Market capitalization. Alibaba’s total market capitalization of $851.3 billion (equivalent to RMB 5.72 trillion) at its high in October last year, and its latest market capitalization of $747 billion (RMB 3.69 trillion) to date; from its high in February this year to date, Jindo’s market capitalization has fallen from $251.2 billion (RMB 1.62 trillion) to $148.3 billion (RMB 956.9 billion) today, and Jingdong’s market capitalization has fallen from a high of $168.3 billion (RMB 1.08 trillion) to the latest $108.1 billion (RMB 697.3 billion).
The three e-commerce giants, Ali, Jindo and Jingdong, have seen their market capitalization shrink by RMB 2,033.8 billion, 660.8 billion and 386.3 billion respectively since their highs, evaporating a combined total of RMB 3.08 trillion.
In addition, the Hong Kong share price of Chinese shopping platform Meituan fell from an opening price of HK$280 per share on May 10, all the way to a low price of HK$255 per share, a drop of nearly 9%, with a market value of more than HK$100 billion evaporating.
On Aug. 24, 2020, Meituan’s market value reached about HK$1.56 trillion, making it the fourth largest company in Hong Kong by market capitalization, behind Tencent, Ali and ICBC.
According to mainland media reports, Meituan shares have experienced nine consecutive declines from the April 28 drop to May 10. Since the start of the year, Meituan shares have fallen 44 percent from their highest point this year. Since Meituan was investigated by the authorities for anti-monopoly, its share price has been going down.
In 2020, the Chinese Communist Party authorities opened an unprecedented “anti-monopoly investigation” against Internet companies. In November of that year, the authorities announced an “anti-monopoly investigation” of Alibaba, and on April 10 of this year, Alibaba was found to have violated the “Anti-Monopoly Law” and was fined a record 18.2 billion yuan.
After Alibaba was fined, the Chinese Communist Party authorities frequently issued fines, warnings and interviews to Internet companies. Recently, the scope of “interviews” has been expanded from Internet finance companies to transportation technology platforms.
On May 14, 10 travel platform companies were “interviewed” by the authorities and asked to “rectify” the situation, including DDT, Shouqi, Cao Cao, Meituan, T3, Gaode, DDT, Manbang, Cargo Lala, and Qidu.
The Communist Party authorities are now increasingly concerned about the growing influence of Internet giants in every aspect of Chinese life and the vast amount of data they have accumulated by offering services such as online shopping, chatting and car rentals.
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