China Crackdown Wipes Hundreds of Billions Off Top Companies’ Values

By Reuters
Reuters
Reuters
September 13, 2021 Updated: September 14, 2021

SHANGHAI—China’s regulatory crackdown has ensnared sectors from technology to education to property, wiping hundreds of billions off the market capitalizations 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.

logo of Alibaba
The logo of Alibaba Group is seen at its office in Beijing, China, on Jan. 5, 2021. (Thomas Peter/Reuters)

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 $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 video game 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. Authorities ordered removal of its app from Chinese app stores and barred it from registering new users.

Its shares have lost about $37 billion, or more than 40 percent, of their value since it raised $4.4 billion from its June 30 initial public offering (IPO).

logo of Didi
The app logo of Chinese ride-hailing giant Didi is seen reflected on its navigation map displayed on a mobile phone in this illustration picture taken on July 1, 2021. (Florence Lo/Illustration/Reuters)

The company has also been criticized by state media for 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 criticizing the government and regime leader Xi Jinping.

Meituan, whose shares have lost more than $154.28 billion in value since reaching its all-time-high in February, has also been criticized on other matters, including treatment of its delivery riders and violation of consumer rights.

New Oriental Education & Technology Group Inc

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.

Analysts warn that the new rules threaten to decimate the country’s private education sector.

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

By Brenda Goh

Reuters