J.P. Morgan downgrades Chinese internet stocks on geopolitical risks

J.P. Morgan in its latest equity research report downgraded 28 coverage stocks in China Internet to Neutral or Underweight; Kuaishou is the only stock with Overweight rating.

The analysis is based on lack of valuation support in the near term, China‘s geopolitical risks, macro recovery and internet regulation risk.

Meituan -16% was downgraded to underweight from overweight and the stock is trading close to its 52-week low levels of $13.50.

Meanwhile, NetEase -9.7% was lowered to underweight from overweight and the stock is trading close to its 52-week low levels of $68.62.

Trip.com -12.5% was downgraded to Neutral from Overweight; 52-week low stands at $14.29 while 52-week high is at $45.19.

Dada Nexus -28% and Hello -29% were downgraded to neutral from overweight; in Q4, DADA beat its EPS and revenue estimates.

Huya -7.5%, OneConnect -5.2% and Douyu -12.3% were downgraded to underweight from neutral; all the stocks are trading close to their 52-week low levels.

Zhihu -28% and Baozun -12% were lowered to underweight from overweight.

Earlier, Alibaba, Baidu lead Chinese tech stocks south as downgrades say it’s time to sell.

Author: Khyathi Dalal, Seeking Alpha

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