GREATER CHINA Strategy Alpha Picks: May Conviction Call: Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
GREATER CHINA Strategy Alpha Picks: May Conviction Call Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. Small-Mid Cap Monthly Reiterate BUY on Crystal International. Sector Automobile Weekly: EV sales pick up; take...
The HSI and MSCI China rose 7.4% and 6.4% mom respectively in April, lifted by news of a stock connect scheme expansion and further easing of restrictions on property purchases in China. With the July Politburo likely to see further supportive policy rollout, we are adding beneficiaries of improving domestic consumption − CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou and Tencent − to our BUY list, and closing out our SELL calls.
Upgrading Europe to Overweight Considering the fact that several 5% pullbacks and roughly one 10% pullback are to be expected in any given year, we continue to view the latest pullback as healthy and normal within the ongoing bull market -- MSCI ACWI (ACWI-US) has had a 5.5% pullback from its 2024 highs, while the EURO STOXX 50 pulled back 4.5%. We discussed last Thursday (4/18/24 Int'l Compass) how further downside may be limited with these two indexes already 4-5% off their highs, combined wi...
What’s New: We up our 1Q24 and FY24 top-line estimates as online gaming could fare better than our initial expectations partly driven by positive progress on change in monetization strategy coupled with new game launches such as DnF Mobile in 2Q. In this note, we discuss key updates including near-term outlook for segments including games, ads, fintech and business services. Analysts: Jin Yoon
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 Tencent Holdings Limited sold after exercising options/sold 14,000 shares at 292.619HKD and the significance rating of the trade was 51/100. 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 d...
What’s new: Tencent’s reported 4Q23 revs were below consensus and our expectations partly due to drag in gaming segment. Domestic games could remain challenging in 1Q partly due to tougher comps. Margins could further improve amid shift to high-quality revenue growth model, and continued cost controls. We maintain our PT at HKD450. Analysts: Jin Yoon
Tencent’s 4Q23 results came in slightly below our expectation. Revenue grew 7.1% yoy to Rmb155.2b, in line with consensus estimate. Gross margin expanded 3ppt yoy to 50%, better than consensus forecast. Non-GAAP operating margin recovered to Rmb52b, while non-GAAP operating margin rose to 34.2%, beating our estimate. Non- IFRS net profit increased 43.7% yoy, 3% above consensus estimate on a positive revenue mix shift. Maintain BUY with a lower target price of HK$382.00.
KEY HIGHLIGHTS Results Anhui Conch Cement (914 HK/BUY/HK$17.20/Target: HK$21.00) 2023: In line; all set to expand market share. CSPC Pharmaceutical Group (1093 HK/BUY/HK$6.41/Target: HK$7.80) 2023: Results in line; expects double-digit revenue and earnings growth in 2024. Geely Auto (175 HK/BUY/HK$8.83/Target: HK$11.00) 2023: Results beat on margins again; upgrade to BUY. Raise target price from HK$6.50 to HK$11.00. Innovent Biologics (1801 HK/BUY/HK$39.35/Target: HK$60.00) 2023: Results ...
What’s New: Tencent held a closed-door Weixin Open Class Pro event this year. We highlight some of the key metrics shared from segments including video accounts and mini games. We also updated our online game revenue estimates for 4Q23. Analysts: Jin Yoon
What’s New: We maintain our 4Q23 estimates as overall business could remain largely intact. In this note, we discuss key updates including near-term outlook for segments including games, ads, and business services. Analysts: Jin Yoon
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.
What’s new: Tencent’s reported 3Q23 revs were largely in line, while margins were above consensus and our expectations. Margins could see further upside amid shift to high-quality revenue growth model, and continued cost controls. We maintain our PT at HKD450. Analysts: Jin Yoon
GREATER CHINA Economics Economic Activity: Stronger retail sales in Oct 23, but FAI stays weak. Initiate Coverage Longfor Group Holdings (960 HK/BUY/HK$13.04/Target: HK$17.68): Leading developer and TOD mall operator in China’s Tier 1 and 2 cities. Results JD.com (9618 HK/BUY/HK$105.90/Target: HK$186.00): 3Q23: Tempered top-line growth; 4Q23 outlook to be anchored by resilient 11.11 performance. Tencent Holdings (700 HK/BUY/HK$322.60/Target: HK$425.00): 3Q23: Earnings beat driven by meaningful m...
China’s online games market is expected to deliver an encouraging momentum in 3Q23, as reflected by the resilient growth in mobile grossing amid continuous favourable industry development. We opine there are monetisation opportunities for mini-games and AIGC, which will become growth catalysts for the online games market. Maintain MARKET WEIGHT.
What’s New: We maintain our 3Q23 estimates as overall business could remain largely intact. In this note, we discuss key updates including near-term outlook for segments including games, social network, ads, fintech and business services. Analysts: Jin Yoon
China’s internet sector delivered solid 2Q23 results with an earnings beat but this was followed by lukewarm 3Q23 guidance from most companies navigating macro uncertainty. In view of the intense competition and saturated growth, internet companies are ramping up AIGC investment and cross border expansion against a favourable regulatory backdrop. Maintain MARKET WEIGHT on the internet sector due to heavy investment in new initiatives leading to margin erosion.
China saw the emergence of 130 LLMs as of end-Aug 23, surpassing the US and positioning it at the forefront of LLM development. AI-related guidelines incorporate enhanced government support and feature less stringent content accuracy requirements as the sector is being leveraged to stimulate economic growth, leading to a robust post-pandemic recovery. We remain optimistic in view of the initial regulatory approvals granted to 11 LLM products. Maintain MARKET WEIGHT.
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