BEIJING - From Tencent Holdings to Alibaba Group Holding, China’s tech leaders have delivered underwhelming numbers for a quarter beset by economic and geopolitical uncertainty. Whether or not they can win back investors may increasingly hinge on the Beijing government’s actions.

In call after call with investors, China’s internet pioneers described how the uneven economy was undermining their business and clouding the future.

Most offered cautious optimism for how the unprecedented government stimulus unleashed late in the summer would help grease the wheels and pleaded for patience.

But the group that once defied Silicon Valley and defined China’s private economy was short on new ideas and ambitious goals.

Just over the past week, the five biggest tech companies erased US$41 billion (S$55.3 billion) in market value, while a gauge of sector stocks listed in Hong Kong has fallen into bear market territory.

On Nov 22, a sell-off in Chinese stocks deepened as concerns over Donald Trump’s imminent return to the White House mingled with growing frustration over the pace of Beijing’s fiscal stimulus roll-out. For investors that were looking to major tech earnings to revive market euphoria, this season now looks like a flop.

The business environment “is not only much worse than five years ago, it’s worse than even when China started the Covid-zero policy in 2022”, said Natixis chief Asia-Pacific economist Alicia Garcia Herrero. “This sector is obviously supported by China’s industrial policies and intent on winning the tech race with the US, but at the same time, it’s a problematic sector.”

PDD Holdings executives boasted about their cheap hairy crabs instead of offering reassurance for disappointing earnings.

Tencent went through its usual pitch about building and sustaining “evergreen” games, without promising any imminent new blockbusters.

Alibaba executives spent their time justifying elevated spending to ward off intense competition.

Even Baidu, the front runner in AI development, failed to wow with any exciting new projects.

“We have not observed a notable improvement in advertisers’ spending patterns, and consumer spending remains subdued,” Baidu’s head of mobile ecosystem Luo Rong told analysts on a call on Nov 21, dulling expectations for the current quarter. “Having said that, we are particularly encouraged by the strength and timeliness of recent stimulus policies which continue to be rolled out.”

Pressure is building for Beijing to offer further measures, as late September’s market rally on the stimulus campaign fizzles.

The parade of ho-hum numbers, vague comments about fiscal policy and warnings contrasted sharply with the pre-Covid-19 era, when Alibaba and Tencent each approached US$1 trillion in market value and analysts talked about the threat they posed to US rivals.

Alibaba once fought directly with Amazon.com’s AWS for cloud customers around the world, as it and JD.com talked openly about carving up international markets.

Tencent once sketched out ambitions of marrying content with social media and online finance in an unparalleled fintech and internet empire.

That swagger has gone since Beijing’s 2020 crackdown on a sector it deemed too powerful.

Having once commanded enviable growth rates off the back of China’s burgeoning economy, these companies now face prolonged consumer malaise at home, a lack of obvious growth engines and costly ventures to expand overseas.

“October retail sales were boosted by earlier Singles’ Day promotions, so it’s not indicative of the real consumption environment – which companies I spoke to are still cautious about,” said abrdn investment manager for Asian equities Ng Xin-Yao. “Generally, I hear of a weaker November.”

PDD’s US-listed stock plunged 11 per cent after the company gave a downbeat outlook due to intensifying competition in China.

The stock, once an investor darling, now trades at 7.7 times forward earnings, about a third of its three-year average.

Along with Alibaba, which eked out just 1 per cent growth in domestic commerce, PDD is fighting a defensive action against upstarts like closely held ByteDance.

There are some bright spots. PDD’s Temu shopping platform has proven to be a hit in the US and other overseas markets.

Alibaba’s international e-commerce division delivered strong growth rates several quarters in a row, prompting the company to unify all online retail operations under the leadership of that division’s chief Fan Jiang.

Meituan – which is next on the slate of companies whose earnings will be studied for signs of domestic consumer appetites – is following the trend and bringing its food delivery service to the Middle East.

In the realm of games, Tencent and NetEase enjoyed a string of hit releases over the summer that revived domestic sales.

Tencent-backed Black Myth: Wukong was an unexpected smash hit on PCs, tapping Chinese history and folklore and potentially opening more opportunities for similarly ambitious titles.

But that growth spurt may already be petering out.

“The sector is no longer considered as driving structural growth like it once did, which means that it is a lot more cyclical than before,” said Daiwa Capital Markets Hong Kong analyst John Choi.

“Policy stimulus will likely play an important role for these companies to see some level of growth acceleration. I am not sure if investors will lose patience, but I do see that the fundamentals are improving going forward.”

Questions remain about the full extent and timing of China’s support, which is being rolled out in stages, leaving the macroeconomic outlook uncertain. BLOOMBERG