EQUITIES
The HSTech Index is losing momentum as Baidu's shares drop sharply following a revenue decline, adding to weakness in the sector following on from Alibaba’s lackluster performance after its recent earnings report.
- Alibaba's stock remains under pressure, last down 3.30%, despite appointing a veteran executive to lead its e-commerce operations, as its core Chinese e-commerce growth was just 1% in the September quarter. Without afternoon support from local investors, the tech index is unlikely to end the week positively.
- Baidu's Q3 earnings showed revenue of ¥33.56b (-2.6% YoY), slightly exceeding estimates of ¥33.53 billion, with Baidu Core revenue flat at ¥26.52bi while iQIYI revenue missing forecasts at ¥7.2b. Adjusted profit per ADR came in at ¥16.60, missing the ¥17.73 estimate and declining from ¥20.40 a year earlier, while adjusted operating profit fell 7.7% YoY to ¥7.01b, though it beat expectations of ¥6.36b. Monthly active users reached 704m, and cash reserves totaled ¥144.5b. Management cited weakness in online marketing but highlighted growth in AI Cloud and increasing adoption of its ERNIE AI model.
Chart. Asia Tech Stocks Struggle
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