Daiwa Raises TME-SW Rating to Buy, Lowers Target Price to HKD82
TME-SW Rating Upgrade: Daiwa has upgraded TME-SW's rating from Outperform to Buy, indicating confidence in its monetization capabilities despite short-term competition concerns.
Target Price Adjustment: The target price for TME-SW has been lowered from HKD91 to HKD82 to align with the trend of valuation downgrades among its peers.
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HSI Declines by 392 Points; KNOWLEDGE ATLAS Surges 5% Amid Ongoing AI Stock Rally
Market Overview: The HSI opened 1.5% lower at 26,640, with significant declines in tech stocks such as TENCENT and KUAISHOU, which dropped 1.7% and 1.9% respectively.
Short Selling Activity: Notable short selling was observed in several tech stocks, including BIDU and BILIBILI, with ratios exceeding 20%, indicating bearish sentiment among investors.
PPI Data: China's Producer Price Index (PPI) YoY for January showed a decline of 1.4%, slightly better than the previous value of -1.9% and above the forecast of -1.5%.
AI Stock Rally: The AI sector saw gains with MINIMAX-WP rising 11.9% after launching a new programming model, while KNOWLEDGE ATLAS also experienced a significant increase of 16.9%.
HSI Closes Up 83 Points; BYD COMPANY and XIAOMI-W Drive Gains; Gold and Silver Stocks Surge
Market Performance: The HSI rose by 83 points (0.3%) to 27,266, with the HSCEI and HSTECH also showing gains, closing at 9,268 and 5,499 respectively, and total market turnover reaching HKD217.218 billion.
Stock Highlights: SENSETIME-W and PONY-W saw increases of 2.9% and 2.6%, while HESAI-W surged by 7.9%. Conversely, YOFC dropped by 5.7% after being added to the MSCI China Index.
Tech Sector Movements: SMIC fell by 2.2% despite a significant YoY profit increase, while other tech stocks like TENCENT and BABA-W experienced slight declines, whereas KINGSOFT CLOUD and KINGDEE INT'L saw notable gains.
Auto and Gold Stocks: Auto stocks led the market with XIAOMI-W and BYD COMPANY rising significantly, aided by new EU tariff exemptions for Chinese electric vehicles. Gold stocks also performed well, with several companies experiencing gains of 2.8% to over 9%.
Citi Anticipates TME-SW (01698.HK) 4Q25 Results to Meet or Slightly Exceed Projections
4Q25 Results Outlook: Citi Research anticipates TME-SW's 4Q25 results will meet or slightly exceed expectations, driven by stable subscription services and growth in non-subscription music revenue.
2026 Focus Areas: Key areas to watch in 2026 include competition from Douyin's Soda Music, SVIP conversion rates, ARPU trends, online advertising revenue, concert income updates, and GPM and operating profit margin trends.
Competitive Concerns: While Soda Music's rapid user growth may not immediately affect TME-SW's core user base, ongoing competitive pressures are expected to hinder share price performance.
AI Integration Trends: The impact of AI on music creation and user behavior is a significant trend to monitor, with Citi maintaining a Buy rating on TME-SW's US stock and a target price of US$29.
<Research>CMS Suggests Favoring Meta, Pinduoduo, and NetEase; AI Productivity Influencing Divergence in Tech Sector
Sector Divergence: China Merchants Securities predicts significant divergence in the tech and internet sectors between 2H25 and 2026, with strong performance in AI infrastructure and tech hardware, while global consumer SaaS faces challenges.
Investment Recommendations: The report encourages investors to focus on AI leaders and selectively explore opportunities in the consumer SaaS sector following recent pullbacks.
Growth of Chinese Companies: Companies like Pinduoduo, NTES, BOSS ZHIPIN, and TME have shown solid growth and profitability, making them attractive investment options.
Brokerage Recommendations: The broker suggests overweighting stocks such as Alphabet, Meta, Netflix, Roblox, and several Chinese firms, indicating confidence in their future performance.
HSI Closes 78 Points Lower; HUA HONG SEMI Surges 7% to Over HKD100; POP MART Declines Over 5%
Market Performance: The HSI closed down 78 points (0.3%) at 26,844, with the HSCEI and HSTECH also experiencing declines, while total market turnover reached HKD255.079 billion.
Tech Sector Movements: KUAISHOU-W fell 1.5% due to new senior notes issuance, while BABA-W and NTES-S rose by 1%, and several other tech stocks like TENCENT and MEITUAN-W saw minor declines.
AI and Chip Stocks: UNISOUND plummeted 6.6%, while KNOWLEDGE ATLAS and MINIMAX-WP saw gains of 3.7% and 22.3%, respectively; chip stocks like SMIC and HUA HONG SEMI also performed well.
Other Notable Stocks: TRIP.COM-S and LI NING experienced gains, while POP MART and LAOPU GOLD faced significant declines, highlighting mixed performance across various sectors.
HSI Declines 71 Points at Noon; POP MART Falls Over 4%; MINIMAX-WP Rises Approximately 13%
Market Overview: The HSI fell 71 points (0.3%) to 26,851, with the HSCEI and HSTECH also declining, while total market turnover reached HKD140.79 billion at midday.
Stock Performance: KUAISHOU-W dropped 2.3% following a senior notes issuance, while other tech stocks like BABA-W and NTES-S saw slight gains, contrasting with declines in TENCENT and MEITUAN-W.
Sector Highlights: AI-related stocks experienced mixed results, with UNISOUND and GDS-SW declining significantly, while KNOWLEDGE ATLAS and MINIMAX-WP posted gains. The automotive sector saw LEAPMOTOR grow, while XIAOMI-W slid.
Economic Indicators: China's inflation rate for December was reported at 0.8%, slightly below the forecast, and outstanding loan growth remained steady at 6.4%.
HSI Declines by 392 Points; KNOWLEDGE ATLAS Surges 5% Amid Ongoing AI Stock Rally
Market Overview: The HSI opened 1.5% lower at 26,640, with significant declines in tech stocks such as TENCENT and KUAISHOU, which dropped 1.7% and 1.9% respectively.
Short Selling Activity: Notable short selling was observed in several tech stocks, including BIDU and BILIBILI, with ratios exceeding 20%, indicating bearish sentiment among investors.
PPI Data: China's Producer Price Index (PPI) YoY for January showed a decline of 1.4%, slightly better than the previous value of -1.9% and above the forecast of -1.5%.
AI Stock Rally: The AI sector saw gains with MINIMAX-WP rising 11.9% after launching a new programming model, while KNOWLEDGE ATLAS also experienced a significant increase of 16.9%.
HSI Closes Up 83 Points; BYD COMPANY and XIAOMI-W Drive Gains; Gold and Silver Stocks Surge
Market Performance: The HSI rose by 83 points (0.3%) to 27,266, with the HSCEI and HSTECH also showing gains, closing at 9,268 and 5,499 respectively, and total market turnover reaching HKD217.218 billion.
Stock Highlights: SENSETIME-W and PONY-W saw increases of 2.9% and 2.6%, while HESAI-W surged by 7.9%. Conversely, YOFC dropped by 5.7% after being added to the MSCI China Index.
Tech Sector Movements: SMIC fell by 2.2% despite a significant YoY profit increase, while other tech stocks like TENCENT and BABA-W experienced slight declines, whereas KINGSOFT CLOUD and KINGDEE INT'L saw notable gains.
Auto and Gold Stocks: Auto stocks led the market with XIAOMI-W and BYD COMPANY rising significantly, aided by new EU tariff exemptions for Chinese electric vehicles. Gold stocks also performed well, with several companies experiencing gains of 2.8% to over 9%.
Citi Anticipates TME-SW (01698.HK) 4Q25 Results to Meet or Slightly Exceed Projections
4Q25 Results Outlook: Citi Research anticipates TME-SW's 4Q25 results will meet or slightly exceed expectations, driven by stable subscription services and growth in non-subscription music revenue.
2026 Focus Areas: Key areas to watch in 2026 include competition from Douyin's Soda Music, SVIP conversion rates, ARPU trends, online advertising revenue, concert income updates, and GPM and operating profit margin trends.
Competitive Concerns: While Soda Music's rapid user growth may not immediately affect TME-SW's core user base, ongoing competitive pressures are expected to hinder share price performance.
AI Integration Trends: The impact of AI on music creation and user behavior is a significant trend to monitor, with Citi maintaining a Buy rating on TME-SW's US stock and a target price of US$29.
<Research>CMS Suggests Favoring Meta, Pinduoduo, and NetEase; AI Productivity Influencing Divergence in Tech Sector
Sector Divergence: China Merchants Securities predicts significant divergence in the tech and internet sectors between 2H25 and 2026, with strong performance in AI infrastructure and tech hardware, while global consumer SaaS faces challenges.
Investment Recommendations: The report encourages investors to focus on AI leaders and selectively explore opportunities in the consumer SaaS sector following recent pullbacks.
Growth of Chinese Companies: Companies like Pinduoduo, NTES, BOSS ZHIPIN, and TME have shown solid growth and profitability, making them attractive investment options.
Brokerage Recommendations: The broker suggests overweighting stocks such as Alphabet, Meta, Netflix, Roblox, and several Chinese firms, indicating confidence in their future performance.
HSI Closes 78 Points Lower; HUA HONG SEMI Surges 7% to Over HKD100; POP MART Declines Over 5%
Market Performance: The HSI closed down 78 points (0.3%) at 26,844, with the HSCEI and HSTECH also experiencing declines, while total market turnover reached HKD255.079 billion.
Tech Sector Movements: KUAISHOU-W fell 1.5% due to new senior notes issuance, while BABA-W and NTES-S rose by 1%, and several other tech stocks like TENCENT and MEITUAN-W saw minor declines.
AI and Chip Stocks: UNISOUND plummeted 6.6%, while KNOWLEDGE ATLAS and MINIMAX-WP saw gains of 3.7% and 22.3%, respectively; chip stocks like SMIC and HUA HONG SEMI also performed well.
Other Notable Stocks: TRIP.COM-S and LI NING experienced gains, while POP MART and LAOPU GOLD faced significant declines, highlighting mixed performance across various sectors.
HSI Declines 71 Points at Noon; POP MART Falls Over 4%; MINIMAX-WP Rises Approximately 13%
Market Overview: The HSI fell 71 points (0.3%) to 26,851, with the HSCEI and HSTECH also declining, while total market turnover reached HKD140.79 billion at midday.
Stock Performance: KUAISHOU-W dropped 2.3% following a senior notes issuance, while other tech stocks like BABA-W and NTES-S saw slight gains, contrasting with declines in TENCENT and MEITUAN-W.
Sector Highlights: AI-related stocks experienced mixed results, with UNISOUND and GDS-SW declining significantly, while KNOWLEDGE ATLAS and MINIMAX-WP posted gains. The automotive sector saw LEAPMOTOR grow, while XIAOMI-W slid.
Economic Indicators: China's inflation rate for December was reported at 0.8%, slightly below the forecast, and outstanding loan growth remained steady at 6.4%.
