JP Morgan Upgrades Investment Ratings for Chinese Big Tech Companies

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Hyunjung] JP Morgan Chase has upgraded its investment ratings on China's big tech companies, which it had deemed 'non-investable' just over two months ago.

According to Bloomberg on the 16th (local time), Alex Yao, a JP Morgan analyst, and his team raised the investment ratings of seven companies?NetEase, Tencent, Alibaba, Meituan, iQIYI, Dingdong, and Pinduoduo?that were assigned a 'underweight' rating in March to 'overweight'. JP Morgan also upgraded its investment opinions on other Chinese companies, changing from 'underweight' to 'neutral'.

NetEase had fallen more than 30% over the year until March 15 but has since shown a recovery, reducing its loss rate to around 10% as of now.

Analyst Yao mentioned the earlier-than-expected regulatory announcements from China. Previously, China revised the Audit Secrecy Law to prevent its companies from being delisted on U.S. exchanges.

In the investment memo released that day, Analyst Yao and his team stated, "The significant uncertainties facing this sector should begin to diminish due to recent regulatory announcements."