Research analysts at JPMorgan Chase have endorsed a clutch of Chinese internet stocks deemed “uninvestable” just two months ago in a significant shift in sentiment towards the sector, reports the Financial Times. In a series of rating changes on Monday, technology analyst Alex Yao and his team upgraded seven companies to “overweight,” having assigned them “underweight” ratings in March. JPMorgan also upgraded several other Chinese stocks from “underweight” to “neutral.”
An “overweight” classification typically means an analyst is recommending that their clients hold more of the stock than the relevant benchmark index, as opposed to less. The labels are similar to a change from “sell” to “buy.”
Ratings of NetEase, Tencent, Alibaba, Meituan, iQIYI, Dingdong and Pinduoduo were all upgraded on Monday, as the companies begin to recover from a sharp sell-off this year. NetEase slumped more than 30% for the year to March 15, but has since recovered and trimmed its year-to-date losses to about 10%.