China’s Market Sees Value Stocks Shine as Tech Stumbles

According to Forbes, Asian equities mostly declined as the US dollar strengthened and concerns about prolonged high interest rates weighed on growth stocks. Yum China reported Q3 revenue of $3.2 billion, up 4% year-over-year, operating 17,514 stores which represents a 10% YoY increase and 96% growth since 2019. Tesla’s October China sales fell 9.9% YoY to 61,497 vehicles, while Starbucks sold 60% of its China business to Boyu Capital at a $4 billion valuation. In Hong Kong trading, Tencent gained 0.12% and Baidu rose 2.87% on AI anticipation, but Alibaba fell 2.57% after rebranding its delivery unit, dragging down JD.com (-2.99%) and Meituan (-2.35%). Mainland investors bought $1.26 billion worth of Hong Kong stocks via Southbound Connect despite overall market weakness.

Sponsored content — provided for informational and promotional purposes.

The Great Rotation Nobody Expected

Here’s the thing about today’s trading – it completely flipped the usual script. We’re seeing what the source calls a “revenge of the nerds” moment where boring old value stocks are outperforming while flashy growth names get hammered. Banks, telecoms, and energy companies held their ground while semiconductors, clean tech, and hardware stocks took significant hits. Foxconn dropped 1.87%, Luxshare fell 3.87%, and Sungrow plunged 6.16%. That’s not exactly subtle.

And the timing is interesting. Both Hong Kong and Mainland indexes have been overbought since late September with RSI levels above 70. So some pullback was probably inevitable. But the specific sector rotation suggests investors are getting nervous about tech valuations and looking for safer harbors. With a massive Hong Kong IPO pipeline coming, traders might be selling current holdings to free up cash for future opportunities. Basically, everyone’s repositioning.

Delivery Wars and AI Dreams

Alibaba’s decision to rebrand Ele.me as Taobao Flash Purchase sent ripples through the instant commerce space. This isn’t just a name change – it’s a strategic move to leverage Taobao’s massive user base for food and essentials delivery. The immediate impact? JD.com and Meituan both dropped around 3%. That’s the market telling you this competition just got more serious.

Meanwhile, Baidu and Tencent bucked the tech downturn because they’ve got AI announcements coming next week. It’s fascinating how anticipation alone can provide insulation from broader sector weakness. But here’s a question – will those announcements actually move the needle, or is this just temporary excitement?

The Electricity Discount Debate

The Financial Times published that piece about Chinese provincial governments offering cheap power to data centers using domestic AI chips. The theory is that since local chips are less efficient than Nvidia’s banned H20, electricity discounts help compensate. But markets didn’t really buy the story – tech hardware stocks still got crushed.

And there’s some confusion here. The Chinese government recently stated they hadn’t actually banned Nvidia’s H20 chip – buyers just stopped purchasing because domestic alternatives became more cost-effective. So which is it? The truth probably lies somewhere in between, but the uncertainty isn’t helping investor confidence.

Trade Winds and Consumer Trends

Looking beyond daily market moves, there are some interesting developments. Trump’s recent comments about potential energy deals with China, particularly regarding Alaskan oil and gas, suggest trade relations might be warming. The White House fact sheet outlines the broader economic and trade agreement, but these energy discussions could represent tangible progress.

On the consumer side, Yum China’s results show resilience despite economic headwinds. Operating nearly 17,500 stores with double-digit growth suggests Chinese consumers are still spending on affordable treats. But Tesla’s nearly 10% sales drop tells a different story about big-ticket items. It’s a tale of two consumer economies – and right now, the value players are winning.