Hong Kong stocks fall for a third day, hurt by Meituan profit slump, Nvidia outlook

Hong Kong stocks fell on Thursday as the price wars in the food delivery and electric vehicle (EV) sectors and AI chipmaker Nvidia’s downbeat outlook weighed on sentiment.

The Hang Seng Index dropped 0.6 per cent to 25,057.47 at 11.10am local time, on course for a third day of loss. The Hang Seng Tech Index shed 0.9 per cent. On the mainland, the CSI 300 Index gained 0.9 per cent, while the Shanghai Composite Index rose 0.4 per cent.

Meituan warned of third-quarter losses after its second-quarter profit was wiped out due to “irrational competition” with Alibaba and JD.com. Its net profit plunged nearly 97 per cent to 365.3 million yuan (US$51.1 million) from 11.4 billion yuan a year earlier despite a 12 per cent increase in revenue.

“Although Meituan’s management intends to avoid competition, the company has inevitably resorted to price cuts to boost market share, ultimately impacting the industry ecosystem and dampening investor sentiment,” said Dickie Wong, executive director of research at Kingston Securities.

The fierce competition in the on-demand delivery services sector is also playing out among the mainland’s top EV makers, who are grappling with overcapacity and weak consumer sentiment.