Alibaba Slides Toward Record Low While Investors Bet on JD.com By

(Bloomberg) — Alibaba (NYSE:) Group Holding Ltd.’s October rally has given way to a renewed slump that has the stock heading for a record low while technology rival JD (NASDAQ:).com Inc. is extending its recovery and winning favor with analysts. 

Deutsche Bank (DE:) AG’s Leo Chiang cut his target price for Alibaba’s Hong Kong stock by almost 4% on Monday, citing “near-term challenges,” while raising his target for JD.com by 16%, noting “resilient growth amid macro uncertainties.”

Morningstar Inc.’s Chelsey Tam echoed similar views in a Nov. 19 note, arguing that “Alibaba’s challenges go beyond the economic cycle” and that JD.com offers “more clarity on the long-term margin improvement.”

Alibaba shares were down 3% at HK$132.90 at 11:06 a.m. in Hong Kong on Tuesday, taking their decline to 18% this month and more than wiping out all of October’s gains. While JD.com was also down on the day, in line with the wider market, it is up about 46% from its August low.

Beijing’s tech crackdown means Alibaba will have to shift about 5% of its e-commerce revenue to its competitors, including JD.com and Pinduoduo (NASDAQ:) Inc, said Ramiz Chelat, a senior portfolio manager at Vontobel Asset Management.

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