Alibaba risks deepening $100 billion rout as turf war heats up

Their shares listed in the Hong Kong list decreased by 28 % from the March height to Thursday, nearly twice the loss on a scale of Chinese technology peers. Rivals JD.com Inc. And Meituan, through similar measures, amid daily newspapers on government efforts to contain the devastating destructive competition called “engagement”.

At least four brokers, including Goldman Sachs Group Inc. And HSBC Holdings PLC, reducing their price goals by 8 % on average since late June, with the last stage of the grass war continued for a year.

“The investment manager of Value Partners Group Ltd. said.” In Hong Kong: “This may last longer than expected.” “The players are financially stronger than the previous round, with more cash positions and the best cash flow situations.”

The food delivery strategy in Alibaba has spent investors away from the Deepseek artificial intelligence boom, which prompted its shares to more than 80 % in just two months of this year. The company merged its delivery unit into its basic work and has strengthened subsidies since the official entry of JD.com to the area in February.

It is an expensive battle. Nomura Holdings Inc. About $ 4 billion was burned with discounts in the June quarterly by Alibaba, Meituan and JD.com. Ali Baba dictates the intensity and size of the voucher war to move forward.

Stroke leader Metan said on Saturday that he would go to the “attack” against Alibaba, while JD.com announced a new incentive system this week. The movements of extremist companies have brought a lot of criticism from the government on the potential catastrophic impact on the industry, as well as warnings about the health of the driver and food safety.

Alibaba may maintain a loss of 41 billion yuan (5.7 billion dollars) in food delivery for 12 months until next June, according to Goldman Sachs, equal to about a third of its net income for the financial year that March ended.

“The aggressive investment in the delivery of food will reduce its expectations in the short term,” HSBC analysts, including Charlin Liu, said in the memo of this week.

The unanimity estimates of Alibaba profits have decreased for 12 months per share about 6 % since early May. Analysts are still upward by an overwhelming majority, with 44 classifications for purchase on Hong Kong shares and there is no documentary or sale. The stock also remains historically cheap for the price of profits less than 11 times.

Regarding the risks of Uspide, you notice UoB Kay Hian Holdings Ltd. Analyst Julia Ban that the government may interfere in reducing competition competition if the market takes a strong blow and the margins are pressed more. She added that the current evaluation of Albaba is low enough to make some purchases.

The stock rose to 3.5 % on Friday amid a wide gathering in Hong Kong.

But investors may remain cautious until a final end of highly slope discounts, especially if they increase the level of profits and restrict investment in the importance of artificial intelligence.

“We need to monitor the price competition that is developing into a position in which some companies decide to obtain their share in the market at the expense of profitability,” said Nicholas Choi, Franklin Timbalon’s wallet manager. “As the arrows, we avoid those stocks.”