Lingering Risks

To be sure, tech is a fast-evolving space that could see a second growth curve with fresh developments, and the sheer size of China’s market makes it an attractive investment destination for some.

“When you look at how that sector’s been very batted down over the past few years, valuations also aren’t extremely stretched,” Christina Woon, investment director for Asian equities at abrdn plc, said in a Bloomberg TV interview. “So altogether that’s a reasonably compelling case to keep an eye on.”

But lingering regulatory risks may make assessing the sector’s fair value a complicated task. A sweeping clampdown across the sector has ended, but that’s not to say authorities are letting go of intense scrutiny.