CHINESE e-commerce giant Alibaba Group Holding Ltd.’s market value has slumped to only about half that of rival Tencent Holdings Ltd. as the former’s e-commerce-centric business faces sluggish demand and intensified competition. Alibaba, whose other main business line includes cloud computing, has a market capitalization of US$201 billion, while Tencent, focused on social media and gaming, is valued at US$384 billion. Alibaba’s shares now trade around eight times forward earnings multiples, versus 16 times for Tencent. Alibaba’s stock tumbled Friday after the company reversed plans a day earlier to spin off and list its US$11 billion cloud business unit in a strategy reset. The move, spurred by increased U.S. restrictions on chip sales to China, sent shares of the company plummeting 9.96% in Hong Kong trading. The divergence in the market value of the two companies also highlights some of the regulatory and macroeconomic issues that have troubled Alibaba. Regulators fined Ant Group, an affiliated firm of Alibaba, 7.12 billion yuan (US$984.1 million) in July this year for violations of laws on corporate governance, consumer rights and business activities. Alibaba’s market value had largely been higher than Tencent before late 2020. Tencent earlier last week reported better-than-expected profitability across its main business lines for the third quarter. The Shenzhen-based social media operator delivered growth across divisions from gaming and advertising to fintech, driving a 10% increase in revenue. (SD-Agencies) | 