Daiwa Research: AI Monetization Yields Results for Leaders Such as TENCENT and BABA-W, Along with 5 Top Sector Picks
Performance of China Internet Stocks: The KraneShares CSI China Internet ETF (KWEB.US) rose by 11.9% from mid-August to mid-September, outperforming the HSTECH index, which increased by 5.4%, indicating strong growth in the China internet sector driven by AI monetization.
Market Insights and Recommendations: Daiwa's report highlights that Alibaba (BABA-W) has seen a bottoming out in its retail business, while Meituan (MEITUAN-W) faces economic pressures. Top stock picks include Alibaba, Tencent, Sea, Xiaomi, and Trip.com, reflecting optimism in AI-driven growth and the gaming sector's performance.
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HKD4.3 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows totaling HKD4.3 billion, while other stocks like BABA-W (09988.HK) and POP MART (09992.HK) experienced notable short selling activity.
Market Activity Overview: TENCENT was the most active stock in both Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, with substantial net inflows, while stocks like XIAOMI-W and AKESO faced the highest net outflows.
Short Selling Statistics: The short selling ratios for TENCENT, BABA-W, and POP MART were 15.248%, 19.556%, and 27.852% respectively, indicating a high level of market speculation.
Overall Market Sentiment: The total Southbound Trading net outflow was HKD0, accounting for 35.67% of the total transaction amount of HKD88.42 billion, reflecting fragile market sentiment according to JPM.
WeChat Halts Qianwen and Yuanbao Red Packet Features, Disrupting Customer Acquisition: Report
WeChat's Restrictions: WeChat has implemented restrictions on sharing AI red packet commands during the Spring Festival, blocking commands from Alibaba's Qianwen and Tencent's Yuanbao AI applications in chats.
User Reactions: Users have reported difficulties in sharing commands for Alibaba's Qianwen on WeChat, leading to discussions about a "business war" between major AI applications.
Short Selling Activity Reaches $47.7B, Representing 22.1% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $47.7 billion, accounting for 22.1% of the eligible securities turnover, slightly down from 23% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include CSOP HS TECH, TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W, with CSOP HS TECH leading at $7.79 billion and a short selling ratio of 66.7%.
CSOP HS TECH Performance: CSOP HS TECH (03033.HK) experienced a decrease of 0.947%, with a significant short selling turnover of $7.79 billion and a high short selling ratio of 66.7%.
Other Notable Stocks: TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W also showed notable short selling activity, with TENCENT at $2.97 billion and a ratio of 15.2%, while MEITUAN-W had a turnover of $961.98 million and a ratio of 26.6%.
<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
G Sachs: 2026 Crucial Year for AI Investments; BABA, TENCENT, and PDD Preferred Choices
Goldman Sachs Report: Goldman Sachs highlighted 2026 as a pivotal year for AI investment, particularly for Chinese internet companies to maintain their market positions amid rising competition in consumer AI applications.
Investment Focus: The report emphasized the importance of seamless transaction capabilities and social functions for user retention, while predicting significant growth in AI capital expenditure by Chinese hyperscalers during 2026-2027.
Competitive Landscape: Goldman Sachs identified BABA-W and TENCENT as leading stocks among Chinese internet giants, but also noted the potential for mid-to-large-sized companies like PDD Holdings to outperform them in 2026.
Market Insights: The report indicated that PDD Holdings stands out due to its valuation discount and strong user perception, making it a key investment target in the evolving AI landscape.
HKD2.2 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows of HKD2.2 billion, while SMIC (00981.HK) experienced a net outflow of HKD706.8 million.
Short Selling Activity: TENCENT had a short selling amount of $2.71 billion with a ratio of 7.959%, while SMIC's short selling was $181.86 million with a ratio of 3.819%.
Market Performance: At market close, Southbound Trading net outflow totaled HKD0, accounting for 39.97% of the total transaction amount of HKD114.07 billion.
Future Projections: Analysts from Citi and CLSA predict limited impact from Google's Project Genie on TENCENT, with expectations of double-digit growth in its gaming and advertising sectors this year.
HKD4.3 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows totaling HKD4.3 billion, while other stocks like BABA-W (09988.HK) and POP MART (09992.HK) experienced notable short selling activity.
Market Activity Overview: TENCENT was the most active stock in both Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, with substantial net inflows, while stocks like XIAOMI-W and AKESO faced the highest net outflows.
Short Selling Statistics: The short selling ratios for TENCENT, BABA-W, and POP MART were 15.248%, 19.556%, and 27.852% respectively, indicating a high level of market speculation.
Overall Market Sentiment: The total Southbound Trading net outflow was HKD0, accounting for 35.67% of the total transaction amount of HKD88.42 billion, reflecting fragile market sentiment according to JPM.
WeChat Halts Qianwen and Yuanbao Red Packet Features, Disrupting Customer Acquisition: Report
WeChat's Restrictions: WeChat has implemented restrictions on sharing AI red packet commands during the Spring Festival, blocking commands from Alibaba's Qianwen and Tencent's Yuanbao AI applications in chats.
User Reactions: Users have reported difficulties in sharing commands for Alibaba's Qianwen on WeChat, leading to discussions about a "business war" between major AI applications.
Short Selling Activity Reaches $47.7B, Representing 22.1% of Eligible Securities Turnover at Market Close
Short Selling Turnover: The short selling turnover in the Hong Kong market reached $47.7 billion, accounting for 22.1% of the eligible securities turnover, slightly down from 23% on the previous trading day.
Top Short Selling Stocks: The top five stocks with the highest short selling amounts include CSOP HS TECH, TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W, with CSOP HS TECH leading at $7.79 billion and a short selling ratio of 66.7%.
CSOP HS TECH Performance: CSOP HS TECH (03033.HK) experienced a decrease of 0.947%, with a significant short selling turnover of $7.79 billion and a high short selling ratio of 66.7%.
Other Notable Stocks: TENCENT, BABA-W, XIAOMI-W, and MEITUAN-W also showed notable short selling activity, with TENCENT at $2.97 billion and a ratio of 15.2%, while MEITUAN-W had a turnover of $961.98 million and a ratio of 26.6%.
<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
G Sachs: 2026 Crucial Year for AI Investments; BABA, TENCENT, and PDD Preferred Choices
Goldman Sachs Report: Goldman Sachs highlighted 2026 as a pivotal year for AI investment, particularly for Chinese internet companies to maintain their market positions amid rising competition in consumer AI applications.
Investment Focus: The report emphasized the importance of seamless transaction capabilities and social functions for user retention, while predicting significant growth in AI capital expenditure by Chinese hyperscalers during 2026-2027.
Competitive Landscape: Goldman Sachs identified BABA-W and TENCENT as leading stocks among Chinese internet giants, but also noted the potential for mid-to-large-sized companies like PDD Holdings to outperform them in 2026.
Market Insights: The report indicated that PDD Holdings stands out due to its valuation discount and strong user perception, making it a key investment target in the evolving AI landscape.
HKD2.2 Billion Net Inflow from Southbound Trading into TENCENT
Southbound Trading Inflows: TENCENT (00700.HK) saw significant Southbound Trading net inflows of HKD2.2 billion, while SMIC (00981.HK) experienced a net outflow of HKD706.8 million.
Short Selling Activity: TENCENT had a short selling amount of $2.71 billion with a ratio of 7.959%, while SMIC's short selling was $181.86 million with a ratio of 3.819%.
Market Performance: At market close, Southbound Trading net outflow totaled HKD0, accounting for 39.97% of the total transaction amount of HKD114.07 billion.
Future Projections: Analysts from Citi and CLSA predict limited impact from Google's Project Genie on TENCENT, with expectations of double-digit growth in its gaming and advertising sectors this year.
