Wall Street Banks Slash Chinese Companies' Profit Forecasts - Read Why - Alibaba Gr Hldgs (NYSE:BABA), Baidu (NASDAQ:BIDU)

Some Wall Street banks slashed their profit estimates for Chinese companies, citing the recent Covid resurgence and subsequent lockdowns, Bloomberg reports.
China's Covid Zero policy has dealt a heavy blow to the economy, as stringent restrictions pressure supply chains and chill consumption.
A week-long lockdown that shut down much of Shanghai expanded to parts of Beijing, triggering fears of broader regulations.
Brokerages, including Morgan Stanley and Nomura, have pruned their economic growth projections.
Among the CSI 300 members that have reported, Q1 earnings are below expectations on aggregate. Investors headed for the exit after poor earnings and lower guidance, with stocks dropping by almost 2% on average after Q1 results.
UBS trimmed its earnings growth forecast for firms in 2022 to 11% from 13% and expected downward revisions to continue in Q2.
They see earnings of Chinese companies stabilizing "around mid-year after more supportive policies are implemented."
Morgan Stanley sees profit growth reach 10% for MSCI China or 5 bps below consensus and 12% for the CSI 300 Index for 2022 or 4 bps below consensus.
Goldman Sachs also sees earnings downgrades to come.
"First-quarter earning shocks may bring renewed pressure to the market," China Securities Co said. "We have cut our earnings forecasts for the second quarter" given the deteriorating economy.

Wall Street Banks Slash Chinese Companies' Profit Forecasts - Read Why