Chinese internet stocks benefit from COVID-19

The global lockdowns and restricted mobility imposed in response to COVID-19 proved to be very beneficial for digitally enabled businesses globally and the Chinese internet giants were no exception. The share price of Tencent has run hard since its March 2020 lows, reaching valuations that seem rich. Alibaba, China’s largest eCommerce platform, has been held back by a number of regulatory challenges over the same period. This article discusses the salient features of both companies, the factors that have contributed to their share price performance and why Northstar’s analysis suggests that there remains value in both stocks with good prospects for further growth.