Given the stabilising revenue growth and abundant cash on hand, mega-cap internet companies have been focusing on offering generous shareholder returns. For 2024, we expect consumption behaviour to switch to service and experience, which will continue to benefit OTA players. We believe other China internet names will outperform with overseas expansion and SFV players will continue to gain market shares with potential for take rate increases. Maintain MARKET WEIGHT.
A director at NetEase Inc sold 10,000 shares at 108.200USD and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly s...
Two Directors at Tal Education Group sold 1,545,087 shares at 14.920USD. The significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
What's new: NetEase’s reported 4Q23 results were below consensus and our expectations. Gaming could remain resilient in 2024 partly driven by new title launches such as Condor Heroes, Where Winds Meet, and Naraka Bladepoint mobile. We maintain our PT at USD125. Analysts: Jin Yoon
NetEase’s 4Q23 results fell below consensus estimates. Revenue grew 7% yoy to Rmb27.1b, 4% below our and consensus forecasts. Net profit surged 53.4% yoy to Rmb7.4b, 7% below consensus estimates. We believe 2024’s performance will be driven by: a) incremental grossing from upcoming game launches, b) encouraging progress of Banhao approval in 2024, and c) strong gross margin anchored by payment channel migration. Maintain BUY. Target price: HK$202.00 (US$129.00).
KEY HIGHLIGHTS Sector Automobile Weekly: PEV market share rebounds; price war heats up. Maintain UNDERWEIGHT. Top SELLs: XPeng. Top BUY: CATL, Tuopu and Desay SV. Results Budweiser APAC (1876 HK/BUY/HK$12.68/Target: HK$19.50) 2023: Results miss; mixed signals from the results. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$242.80/Target: HK$262.00) 4Q23: Passable results. Maintain HOLD. NetEase (9999 HK/BUY/HK$176.20/Target: HK$202.00) 4Q23: Earnings miss; upcoming blockbusters in 2024...
NTES will report 4Q23 results on February 29th before the markets open with a 7am ET conference call. We are positive on NTES’s 4Q23 performance. The positive performance, we believe, is driven by the better performance from both domestic and international markets. Internationally, over the last two years, NTES has developed 22 overseas game studios. We expect NTES to have more overseas studios set up in 2024. Domestically, we believe existing PC games contributed more to the bottom line in 4Q23...
The HSI and the MSCI China fell 9.2% and 10.5% mom respectively in Jan 24, dragged down by IT and consumer discretionary stocks amid low market confidence and negative geopolitical news flow. The policy easing in late-Jan 24 may have established a bottom, but the timing of a new upcycle remains uncertain, contingent on favourable macro news flow in the near term. Hence, we remain hedged, adding COSCO Shipping Holdings and FII to our BUY list, with additional SELL calls on Li Auto and Xpeng.
The HSI was flat in Dec 23 but the MSCI China fell 2.6% mom. Despite the announcement of new policy support and prospects of US rate cuts in 2024, investors sold into strength following weaker macro data. With MSCI China trading at 9.0x 12-month forward PE, we expect most negatives to have been priced in. We add the potential beneficiaries of the CNY festival − Galaxy Entertainment and Trip.com − to our BUY list, but include SELL calls on BYD and Geely due to the subsidy cut.
On 25 Dec 23, NPPA issued the 11th batch of domestic Banhao with 105 approvals, higher than previous monthly batches’ average of 85. We see a softening tone from NPPA’s draft on online game policy restrictions on 23 Dec 23. However, the execution and impact of the new regulations are yet to be tracked. We are cautiously optimistic on the online game sector’s growth in 2024 with the changes in the regulatory environment. Maintain MARKET WEIGHT.
We expect resilient online games sector growth going into 2024, in view of a strong game grossing performance in 3Q23, solid game pipeline with multiple popular genres in 2024 as well as continuously favourable regulatory environment. We foresee ample monetisation opportunities from mini games and AIGC application. NetEase is our top pick given its strong position in the party games genre and margin improvement due to payment channel migration. Maintain MARKET WEIGHT.
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver, with an index target of 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks, staying negative on the auto sector.
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver and our index target is at 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks. Staying the course. The Central Financ...
MSCI China rose only 2.3% mom in November while the HSI shed 0.4% mom over the same period, despite positive newsflow for the real estate sector. Investors preferred to sell into strength, as concerns over China’s slow economic growth remain. Looking ahead, the mid-Dec 23 Economic Work Conference may provide positive surprises and with MSCI China trading at 12-month forward PE of 9.3x, risk is skewed to the upside. We add CSPC, HKEX, Lenovo, Longfor, Pinduoduo and Sunny Optical to our BUY list.
What's new: NetEase’s reported 3Q23 top-line results were largely in line with consensus. The company has sufficient games in the pipeline to continue to support gaming revenue growth heading into 2024. We increase our PT from USD110 to USD125 on improving margin outlook. Our revised PT of USD125 implies 17.3x FY24 P/E. We maintain our BUY rating. Analysts: Jin Yoon
Net profit increased 15.7% yoy to Rmb8.6, 21% above consensus estimates. We foresee several catalysts for 4Q23’s top-line growth: a) strong seasonality during the winter holidays, b) encouraging progress of Banhao approval in 2023, c) resilient performance delivered by
KEY HIGHLIGHTS Sector Aviation Airlines’ Oct 23 operational data: Recovery continued at a moderate pace; overcapacity issue remains. Maintain UNDERWEIGHT. Initiate Coverage Longi Green Energy Technology (601012 CH/BUY/Rmb23.71/Target: Rmb27.39) Solar modules: China’s dominance to persist; riding on the installation boom. Results Alibaba Group (9988 HK/BUY/HK$81.35/Target: HK$115.00) 2QFY24: Strong AIDC growth; cloud distribution cancelled due to chip restrictions. Lenovo Group (992 HK/BUY/HK...
NTES will report 3Q23 results on November 16th with a conference call at 7am ET. We are positive on NTES’s 3Q23 mobile game performance as the company released several new games, which we expect to contribute to revenue in 3Q23 and 4Q23. More importantly, we are expecting NTES to make more improvement on its margins as the company continues to downsize its Cloud Music business to optimize the model, in addition to getting rid of lower margin contribution from WoW. Higher growth in topline and im...
We expect e-commerce ads and overseas e-commerce expansion to be the main driving forces spurring stagnant growth in 3Q23 and beyond. In addition, we are optimistic about the better-the-expected growth in game gross profit and on-track OTA data on the back of strong seasonality. We are also looking out for meaningful progress in AIGC development in 3Q23 and better visibility in 4Q23. Maintain MARKET WEIGHT on the internet sector.
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