2022 is a challenging year for Chinese tech stocks. Billions of dollars in value “evaporated” on the stock exchange, and Alibaba, Tencent, and other tech giants have posted the slowest growth rates in years.

The strict pandemic control policy, the continuous closure of cities, along with the tightening of people’s spending has caused the growth of China’s technology industry to slow down.

Recently, the Chinese government has eased the pandemic policy, which many investors have been expecting for 2023.

Analysts at investment bank Jefferies said, ‘We are positive on 2023 internet sector outlook in light of reopening story and improving consumer sentiment.’

However, there are still many uncertainties surrounding the economic recovery.

Xin Sun, a senior lecturer at King’s College London, said that the prospect of a tech rebound next year depends primarily on how much the macroeconomy, especially consumption, could recover.

Xin Sun added that given the current extremely suppressed level of consumption, a tech rebound is likely if China could smoothly exit from zero-COVID and reopen the economy.

Analysts say that the growth rate of Chinese tech names will accelerate again in 2023. However, the growth rate will not reach the level seen in the past.

Alibaba is forecast to see a 2% year-on-year jump in revenue in the fourth quarter of this year. Just over 6% in the March quarter of 2023 and 12% in the June quarter.Tencent is expected to post year-on-year revenue growth of just 0.5% in the December quarter. 7% in the first quarter of 2023 and 10.5% in the second quarter of 2023.

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