Tencent (TCEHY), Alibaba (NYSE:BABA) and Xiaomi (XIACF) absorbed a hefty HKD 46.4 billion ($5.9 billion) sell-off in June, marking a second straight month of net outflows via Hong Kong’s Stock Connect links as mainland investors stepped back.
Shares of these bellwether tech names have been slipping since early AprilAlibaba off 12% from its April 2 highdriven by profit-taking and a dearth of fresh growth catalysts, according to Union Bancaire Privee. For Tencent, the slide underscores mounting pressure to spark expansion beyond gaming and ad sales, while Alibaba grapples with cloud spin-off chatter and concerns about overheated data center buildouts.
Xiaomi’s marathon sell-down comes despite the buzz around its first electric vehicle debut, highlighting that new product launches alone may not insulate it from volatility if sales miss the mark. A large earlier share placement this year added to the strain, even as mainland money still poured into Hong Kong equities overallabout HKD 714 billion ($90 billion) year-to-date, lifting the market 21% in H1.
This juxtapositionrobust broad inflows alongside concentrated profit-taking in top tech stocksspeaks to a selective rethink among investors rather than a wholesale retreat. With H2 earnings season on the horizon, markets will test whether these companies can reignite momentum or if the shift marks a longer-term rotation away from China’s mega-cap names.
This article first appeared on GuruFocus.
