HONG KONG, July 12 (Reuters) - China's major tech companies have shed more than $1 trillion in value -equivalent to the entire Dutch economy - since the government's regulatory crackdown on the sector began more than two years ago, according to Refinitiv data.
Reuters GraphicsTechnology stocks (.HSTECH) in Hong Kong have rallied 4.1% since Monday as investors bank on an easing regulatory environment to boost earnings, but some analysts have sounded a note of caution.
"Mega-cap tech companies will allocate increasingly large amounts of capital expenditure towards developing generative AI technologies and products in a hostile external environment, potentially impacting profitability," said Redmond Wong, Saxo Markets strategist in Hong Kong.
Steven Leung, UOB Kay Hian sales director, said current valuations would last "until we see more supporting policies from authorities".
Reporting by Donny Kwok in Hong Kong and Scott Murdoch in Sydney; Editing by Kevin LiffeyOur Standards: The Thomson Reuters Trust Principles.
Persons:
Tencent, Redmond Wong, Steven Leung, UOB Kay Hian, Donny Kwok, Scott Murdoch, Kevin Liffey
Organizations:
People's Bank of China, Tencent Holdings, HK, Alibaba, Baidu Inc, Reuters Graphics Technology, Saxo Markets, Thomson
Locations:
HONG KONG, Hong Kong, Sydney