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Hong Kong stock market
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Chinese tech stocks tumble as insiders sell Meituan, JD Health while Hong Kong faces recession risks, higher rates

  • Non-executive director Neil Shen sold a chunk of his stake in Meituan late last month, according to stock exchange disclosure
  • Hong Kong’s economy shrank by deeper than expected 4 per cent last quarter amid curbs to contain the fifth wave of Covid-19 outbreak

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People passing by a board showing the Hang Seng Index in Central, Hong Kong on April 25. Photo: K. Y. Cheng
Cheryl Heng
Hong Kong stocks retreated from a two-week high technology stocks tumbled after some company insiders cut their stakes in Meituan and JD Health. The city faces heightened recession risks while traders brace for higher US interest rates.
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The Hang Seng Index fell 1.1 per cent to 20,869.52 at the close of Wednesday trading, the biggest drop in a week, and bringing the decline this year to 11 per cent. The Tech Index slumped 3.3 per cent. Markets in mainland China are closed for a holiday.

Meituan sank 4.6 per cent to HK$164.50 after its non-executive director Neil Shen Nanpeng, who is also the founder of Sequoia Capital China, sold about 43 million shares in the company late last month for HK$6.23 billion (US$799 million), according to stock exchange disclosure.

JD Health plunged 13 per cent to HK$43.60 after its chairman Richard Liu sold about 8.8 million shares for HK$440 million in two separate sales over the past week, according to stock exchange filings.

“Investors cashing in on these stocks have soured market sentiment,” said Stanley Chan, research director at Emperor Capital. “This might not be a trend at the moment, but it has introduced selling pressures.” Meituan has a 5.5 per cent weight in the Hang Seng Index while JD Health is not a constituent.

The sales, at beaten-down price levels following a slump of 27 per cent in Meituan and 26 per cent in JD Health this year, suggest a lack of confidence in their business outlook, despite recent hopes for an end to Beijing’s trillion-dollar crackdown in the sector.

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Other Chinese tech giants slumped. Alibaba Group Holding, the owner of this newspaper, lost 3.7 per cent to HK$96.55 while Liu’s flagship JD.com retreated 4.1 per cent to HK$239.60 and Tencent declined 3.1 per cent to HK$368.40.

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