Tencent Holdings Limited (700 HK)
Tencent has maintained a “BUY” recommendation with a target price of HK\$570.00. The company is witnessing accelerated contributions from strong overseas game titles and the rejuvenation of its evergreen titles. A potential launch of “HoK World” and “HoK Breaking Dawn” in 2025 is expected to be a key catalyst, with projected monthly revenue reaching Rmb1.5b-2.5b. Tencent is on track to repurchase over HK\$100b worth of shares in 2024, surpassing HK\$90b in the first nine months of the year. The target price implies a 22.0x 2025F PE, with the company currently trading at 15.2x 2025F PE, which is 1SD below its historical mean of 25.3x.
Meituan (3690 HK)
The recommendation for Meituan is “BUY” with a target price of HK\$222.00. This target implies a 22.5x 2025F PE, aligned against a 15% 2025-28 EPS CAGR. The company’s core local commerce (CLC) segment is poised to benefit from fiscal policy rollouts targeting consumption, notably with the rollout of Shenhuiyuan, which enhances online penetration in key categories such as food delivery, ISHT, and Instashopping. Meituan’s strong market position is further solidified with Pinhaofan tapping into additional lower average order value scenarios.
Trip.com Group Limited (9961 HK)
Trip.com holds a “BUY” recommendation with a target price of HK\$640.00 (US\$81.00). The company is expected to experience substantial market share gains driven by strong international and outbound travel demand. Trip.com’s optimistic outlook for 2025 is underpinned by market share increases in international travel, supported by heightened investment in its international brand, Trip.com. The target price reflects a 26.4x 2025F PE, aligning with global peers.
Alibaba Group Holding Limited (9988 HK)
Alibaba is recommended as “BUY” with its current market price standing at HK\$88.3 and a target price of HK\$130, indicating a 47.3% upside. The company is projected to achieve significant growth in earnings, driven by improvements in monetization (ARPU and take rates) and profitability, facilitated by adtech upgrades. Alibaba’s site-wide marketing tools have enabled over 300,000 merchants to increase GMV by 60%.
JD.com, Inc. (9618 HK)
JD.com is also listed with a “BUY” recommendation, priced at HK\$156.2 with a target of HK\$197, reflecting a 26.1% potential upside. JD.com is expected to be a primary beneficiary of government stimuli, particularly in the home appliance segment, owing to its robust supply chain infrastructure and consumer recognition. The company’s free trials of AI products during the Singles’ Day festival, including the Yanxi Digital Human, highlight its innovative approach.
Pinduoduo Inc. (PDD US)
Pinduoduo carries a “BUY” recommendation with a current price of US\$110.3 and a target of US\$160, offering a 45% upside potential. The company’s strategy is pivoting towards fostering a sustainable ecosystem by reducing software service fees, merchant deposits, and other costs. Pinduoduo’s international expansion holds significant growth potential, although there are concerns regarding potential de minimis tax and tariff risks post-US elections.
Netease, Inc. (9999 HK)
Netease is recommended as “BUY” with a current price of HK\$155.1, although its target price is HK\$144, indicating a -7.2% downside. The company is witnessing growth in its gaming segment, particularly in simulation games (SLG) and mini-games. These emerging verticals are capturing various cohorts of Chinese gamers, as well as a global audience. However, intense market competition is expected with divergent performances among titles and publishers.
Baidu, Inc. (9888 HK)
Baidu is rated as “HOLD” with its price at HK\$87.4 and a target of HK\$90, implying a 3% upside. Baidu is experiencing a near-term slowdown expected to persist into 4Q24 and 1Q25 due to macroeconomic factors and AI transformation. The monetization of AI-powered search is anticipated to reach a significant milestone in 2025, with high teens yoy growth in cloud revenue expected.
Kuaishou Technology (1024 HK)
Kuaishou is advised as “BUY” with a current price of HK\$48.1 and a target price of HK\$67, suggesting a 39.3% upside. The company’s efforts are focused on enhancing its market share by leveraging its competitive advantages and innovative content strategies. Kuaishou has been active in refining its platform to better meet the demands of its user base.
KE Holdings Inc. (2423 HK)
With a “BUY” recommendation, KE Holdings is priced at HK\$53.0 and targets HK\$70, conveying a 32.1% upside. The company is poised for resilient growth, with significant market share gains from SOE developers. Beike’s market share now stands at 58%, and its new-home GTV is projected to rise 40% yoy, outperforming the top 100 developers’ average.
Kingsoft Corporation Limited (3888 HK)
Kingsoft’s recommendation is “BUY” with its current price at HK\$34.2 and a target of HK\$40, offering a 17% upside. The company continues to innovate in its gaming and cloud services, aiming to capture a larger share of the market by leveraging its technological advancements and strategic investments.
