Regulatory crackdown in China wipes billions off top companies’ values

Photo by Bruce Röttgers on Unsplash

China‘s regulatory crackdown has ensnared sectors from technology to education to property, wiping hundreds of billions off the market capitalisations of some of its largest companies and putting investors on alert over who may be next.

Here are some of the largest names that have been affected so far:

ALIBABA GROUP

The woes of China‘s biggest e-commerce company began in late 2020 when China abruptly suspended the record $37 billion stock market debut of its financial affiliate Ant Group and later fined Alibaba $2.75 billion for abusing its market dominance.

The company’s U.S.-listed shares have shed more than $400 billion in value since late October, when its founder Jack Ma made a speech that blasted China‘s regulatory system, which is widely regarded as the trigger for the government backlash that followed.

Alibaba’s sprawling empire of businesses has continued to face heat from regulators, over issues ranging from their use of algorithms, to consumer privacy and worker protections.

TENCENT HOLDINGS

China‘s largest gaming and social media company has lost more than HK$2.7 trillion ($347.13 billion) in market value since its shares reached an all-time high in mid-February.

The company has been fined for failing to report past deals to anti-trust regulators, its $5.3 billion plan to merge China‘s top two videogame streaming sites was blocked and it has been barred from entering music copyright agreements.

Tencent has also been affected by China‘s latest efforts to combat gaming addiction among minors. In August under-18-year- olds were banned from playing video games for more than three hours a week.

DIDI GLOBAL

China‘s largest ride-hailing company became the target of a cybersecurity investigation by Chinese authorities days after its New York initial public offering in June, who ordered its app to be removed from Chinese app stores and barred it from registering new users.

Its shares have lost about $37 billion, or more than 40%, of their value since it raised $4.4 billion from its June 30 IPO.

The company has also been criticised by state media over how it pays its drivers. Reuters has reported that Didi is in talks with state-owned Westone Information Industry Inc to handle its data management and monitoring activities.

MEITUAN

The food delivery company became the target of an antitrust probe in April and experienced a sell off in its shares a month later after its founder and Chief Executive Wang Xing posted an ancient poem on social media that was perceived by some as criticising the government and President Xi Jinping.

Meituan, whose share have lost more than HK$1.2 trillion ($154.28 billion) in value since reaching their all time-high in February, has also been criticised on other matters, including treatment of its delivery riders and violation of consumer rights.

NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP

China‘s largest provider of private educational services has seen the market value of its U.S.-listed shares fall by $7.4 billion since July, when Beijing issued new rules barring for-profit tutoring on the school curriculum.

Beijing wants to ease pressure on school children and reduce a cost burden on parents that has contributed to a drop in birth rates but analysts warn that the new rules threaten to decimate the country’s private education sector.

The company and its peers have been since trying to promote alternative classes such as drama and even parental training.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.