+852 3594 6776

Serve every customer with heart

Your Needs   Our Focus

Financial Bulletin

After Big bounce, the financial reports of Ali and Tencent came!

Release Time:2024-05-14

In recent days, the Hong Kong stock market has risen strongly and has recovered all the declines since last September. As of yesterday's close, the Hang Seng Index and the Hang Seng Index stood at 19,000 points and 4,000 points respectively, with strong signals.

In this round of "big counterattack" of Hong Kong stocks, the performance of Kewang stocks is very bright. The data shows that the Internet ETF of Hong Kong stocks, the leading Internet company in Hong Kong stocks, rose 2.5%, setting a new high in the year. Since late April, the ETF has risen fiercely and has set a new high in the year for seven times.

On this occasion, Hong Kong stocks and China Stock Exchange will usher in a peak period of performance disclosure. After the Hong Kong stock market closed today, Alibaba and Tencent announced their latest results, and JD.COM and Baidu will also "relay" tomorrow.

Weight accounts for more than a quarter of the MSCI China Index. Can the latest achievements of these four Internet giants add another "fire" to the sweeping rise of Hong Kong stocks?

On May 9, Goldman Sachs released the performance forward-looking research report of Tencent and Ali. It is estimated that Tencent's Q1 operating profit in fiscal year 24 will increase by 15% year-on-year, and game revenue will decrease by 3% year-on-year. Alibaba's Q4 EBITA in fiscal year 24 will decrease by 8% year-on-year (note: Alibaba's fiscal year is from April 1st to March 31st of the following year), and GMV will increase by 6% year-on-year.

Tencent: Net profit increased by more than 20% year-on-year, and game revenue stabilized.

The report predicts that Tencent Q1' s game revenue will decrease by 3% year-on-year, advertising revenue will increase by 19% year-on-year, and adjusted total revenue will increase by 15% year-on-year.

The report also pointed out that considering tencent games's strong revenue in March and April, the year-on-year growth rate reached double digits, which may bring obvious visibility to its game revenue.

Boosted by the video number advertising revenue, the report believes that Tencent's financial technology department stabilized in the first half of the year and the cloud computing department continued to recover. The profit growth rate of Q1 and Q2 of the company will remain above 20% year-on-year; The compound annual growth of the company will be the main driving force of the stock price in the second half of this year.

The repurchase plan will be the focus of Tencent's financial report. The company previously promised to buy back 100 billion yuan in 2024. So far, the company has completed about a quarter of the repurchase plan. According to media reports, as the technology company with the highest market value in China, any change in its commitment to improve shareholders' returns will have a wide impact on the China market.

In addition, the report also lists the information points worthy of attention in Tencent's latest financial report:

Sustainability of domestic game growth. In particular, the revenue and revenue guidelines of its the glory of the king and Peace Elite.

The growth momentum of wechat /Wechat online advertising. Video number advertising business (advertising, pricing, e-commerce GMV), and the timetable plan to tie the income level of other short video platforms.

Business services/cloud growth. Judging the growth prospect of cloud service revenue during the year, focusing on public clouds and other SaaS/AI drivers.

Cost control and operating leverage. The inflection point of income is gradually emerging, and the company needs to further streamline costs to achieve a high-quality revenue growth model.

Since the beginning of this year, the share price of Tencent Holdings (ADR) has risen by over 30%, with a price-earnings ratio of 17 times.

Ali: GMV resumed positive growth, while Taotian EBITA turned down.

The report predicts that Alibaba's Q4 GMV (total merchandise transaction volume) will resume positive growth, increasing by 6% year-on-year, CMR (customer management income, about equal to advertising fee+commission) will increase by 2% year-on-year, and Taotian EBITA will drop by 2% year-on-year.

In addition, the report predicts that the loss of Ali International Digital Business Group (AIDC) in Q4 will increase from 400 million yuan in the same period last year to 3.5 billion yuan.

Considering the effectiveness of the business strategy change of Ali management, the report said that the growth of GMV may be transformed into the accelerated growth of Ali CMR in the second half of the year.

The report believes that the following information should also be paid attention to in Ali's latest financial report:

When Taotian GMV grows and its market share is stable. Whether the "customer first" strategy can be transformed into a stable market share within 1-2 years, when to launch the "all-site promotion" marketing tool to more businesses, and when Taotian MPV will have an inflection point. It is expected that the performance from April to early May and during the promotion activities of June 18th Shopping Festival will be the key to the growth of Q2 performance of the company.

EBITA guidelines for Taotian fiscal year 25. As the company's Q3/Q4 Taotian ERITA may decline in fiscal year 24, investors will pay attention to the reasons (such as the high year-on-year base/the impact of investment strategy) and whether the management will take stabilizing Taotian EBITA as one of the performance targets in fiscal year 25.

Operation of international e-commerce platform. The influence of AIDC loss expansion on profit; In order to reduce losses, Temu has switched from full custody mode to semi-custody mode in the United States and other developed markets, and is concerned about whether AliExpress will follow suit and make strategic changes.

In the second half of the year, cloud computing accelerated again and became the driving force for growth. It is expected that cloud services will resume growth as the negative impacts brought by the departure of big customers and the reduction of private/hybrid cloud investment subside.

Shareholder returns. Concerned about the repurchase and dividend policy, the company previously promised to buy back $12 billion in 2024. So far, the company has completed the repurchase plan of 48 US dollars.

Since the beginning of this year, the share price of Alibaba has risen by more than 9%, and the price-earnings ratio is less than 7 times. Goldman Sachs believes that a lower valuation means that Ali's share price still has room to rise.

Risk warning and exemption clause

The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

More Flash >>