(Bloomberg) — Beijing’s antitrust crackdown on homegrown tech giants may be coming to an end, leaving stock valuations of some of the major firms at attractive levels.

That’s the view of Hyomi Jie at Fidelity International Ltd., whose China consumer equity funds oversee $7.3 billion in assets. One has beaten 96% of peers in the past year. Hong Kong-based Jie sold some of her holdings in Alibaba Group Holding Ltd. and Tencent Holdings Ltd. earlier in the year, though they remain among her largest positions.

“What we can think about is whether we are in the start of this cycle, this regulatory pattern cycle, or we are closer to the end of the cycle,” said Jie. “I have a view that we are closer to the end of the cycle.”

While probes of billionaire Jack Ma’s Alibaba and Ant Group Co. took three to four months, a second batch of investigations into firms such as Tencent and Meituan may proceed more quickly, indicating that the regulatory cycle could be wrapping up as key players in the industry have agreed on what needs to be done, according to Jie.

She isn’t alone in noting the appeal of valuations of shares such as Alibaba and Tencent now, with buy recommendations from analysts dominating for those stocks, according to Bloomberg-compiled data.

China’s rapid-fire moves to curb anti-competitive practices by more than 30 technology firms have rattled investors, leaving them uncertain about the prospects of once-adored industry favorites. Shares of internet titans such as Alibaba and Tencent have fallen about 20% from their recent peaks, driven also by a global tech selloff.

“Couple months back, valuation was a reason for me wanting to trim these stocks even though I really like their fundamentals,” she said. “Now the valuations are working in favor of them because they are much less liked by other investors.”

Alibaba is trading at around 20 times its 12-month earnings estimates compared with 31 times for Tencent and 36 times for the Hang Seng Tech Index. Tencent, Alibaba and Meituan have lost more than $400 billion combined in market value since mid-February.

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Cyclical Industries

Beyond the tech industry, the money manager has moved profits into cyclical stocks that are likely to benefit as the global economy recovers from the pandemic.

In particular, Jie has favored Macau casino operator Galaxy Entertainment Group Ltd. as she expects the former Portuguese territory to be the first port of call for Chinese travelers after the pandemic.

“When Chinese people start to want to travel again outside of China, Macau is the safest place for them to go,” she said. Structurally, “Macau is an attractive destination for many mass and premium-mass customers” and there is a very tight control on supply of tourism resources there, Jie said.

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