Baidu, NetEase to Chart Path Ahead as China Tightens Grip on Tech Firms
(Bloomberg) -- Baidu Inc. and NetEase Inc. will report earnings just as China tightens its grip on technology companies, sparking concern there will be further restrictions on private enterprises.
Most Read from Bloomberg
-
Apple to Wind Down Electric Car Effort After Decadelong Odyssey
-
How Much Wealth You Need to Join the Richest 1% Around the World
-
Office Tower Deal for $1 Reveals Anxiety Among Longtime Buyers
-
A Spike in Heart Disease Deaths Since Covid Is Puzzling Scientists
-
Apple's Scrapped Car Project Means AI and Headset Bets Are More Urgent
With Beijing facing pressure to restore confidence after a $7 trillion stock rout, its moves to steer the technology industry is a double-edged sword. While it may divert more resources to artificial intelligence and semiconductors, investors might be less enthused at a time when Chinese stocks are struggling to gain traction.
Baidu’s valuation is one of the lowest among its peers, so it will need to convince investors that AI developments can spur higher revenue. NetEase is expected to turn in a strong performance, though Bloomberg Intelligence expects sales growth to moderate in the next few years amid ongoing regulations in China’s video game industry.
Southeast Asian lenders Oversea-Chinese Banking Corp. and Malayan Banking Bhd. may post stronger net income, following in the footsteps of some Asean banks. Net income at DBS Group Holdings Ltd., Singapore’s biggest lender, reached a record in 2023 despite technical outages, while it rose 34% at Indonesian lender PT Bank Mandiri.
City Developments Ltd. earnings may be weighed down by possible asset impairments in the investment properties portfolio, but its underlying business in Singapore should offer support. Hong Kong developers Sun Hung Kai Properties Ltd. and New World Development Co. may need to cut slash prices further to sell their new housing projects, amid a gloomy outlook in the city’s property market.
Highlights to look out for:
Monday: Li Auto’s (LI US) quarterly operating profit will remain sequentially steady despite spending more on promotions to fend off rivals, BI said. Cheaper batteries and greater scale probably helped reduce production costs and protect margins. But the EV maker is vulnerable to increasing competition from Huawei’s Aito. The Chinese government is seeking to boost consumer product sales, a move that could boost the outlook for Chinese auto makers.
Tuesday: Full-year earnings at Woodside Energy (WDS AU), Australia’s largest natural gas producer, were hurt by impairments of $1.5 billion on oil and gas assets.