China Tech Q4 2025 Profits Drop 30% — Worst Quarter in Three Years

Profits for companies in the 30-member Hang Seng Tech Index fell 30% in Q4 2025 (October–December 2025), the steepest quarterly decline since the 2022 regulatory crackdown. The results, reported in aggregate by Bloomberg on April 2, reflected weak Chinese consumer spending, intense price competition in e-commerce and food delivery, and rising R&D costs associated with the AI investment race. Companies most affected included Meituan (food delivery margin compression), JD.com (gross margin decline), and Kuaishou (ad revenue softness). The results increased investor skepticism about a near-term sector recovery, even as dedicated AI-native startups like Zhipu AI and DeepSeek continued to command premium valuations. The divergence between established platform tech companies and AI-focused startups has become one of the defining investment themes in China's tech sector in 2026: incumbents face commoditized competition and regulatory compliance costs, while frontier AI labs attract sovereign wealth fund backing regardless of losses.