Tencent Music Entertainment Group (NYSE: TME ) is essentially the Spotify/Apple Music of China. Its core products are music apps such as QQ Music and Kugou Music. As of 1q25, it has over 550 millionI'm Michael from Hong Kong. I focus on consumer discretionary and financial services sector in the US and China. My investment time frame is 0.5-2 years. I hold a bachelors in commerce with high distinction from the University of Toronto, specializing in finance and economics. I am passionate about value investin ...

While short videos are all the rage lately, Tencent Music's latest acquisition bolsters its position in the strategically important market for long-form audio contentKey Takeaways:Tencent Music will pay $1.26 billion for Ximalaya, China's leading audio platform that boasts more than 600 million usersXimalaya's products have been included in the onboard audio offerings of more than 80 carmakers, including Tesla and NioBy Lee Shih TaIn today's increasingly video-dominated media world, predictions of the death ...

Global investors have largely written off Chinese platform stocks over the past three years, but Tencent’s ( OTCPK:TCEHY ) 2024 results show a business that never stopped compounding and is now accelerating out"AWS Certified AI Practitioner Early Adopter"I am a DevOps Engineer for a major, wholly owned subsidiary of a large-cap Fortune 500. I am a true subject-matter expert on the actual buildout, deployment, and maintenance of AI tools and applications. I have increasingly deep knowledge on the science beh ...

Core Viewpoint - The China Securities Index (Hong Kong) 60 Index, which reflects the performance of listed securities from BRICS countries, has shown significant growth, with a year-to-date increase of 13.66% [1]. Group 1: Index Performance - The China Securities Index (Hong Kong) 60 Index reported a value of 1476.05 points, with a monthly increase of 2.62%, a three-month increase of 3.22%, and a year-to-date increase of 13.66% [1]. - The index is composed of securities from BRICS countries (Brazil, Russia, India, South Africa, and China) that meet certain size and liquidity criteria [1]. Group 2: Index Holdings - The top ten holdings in the China Securities Index (Hong Kong) 60 Index include Tencent Holdings (13.43%), Alibaba-W (9.1%), HDFC Bank (5.54%), Reliance Industries (4.31%), Xiaomi Group-W (3.78%), ICICI Bank (3.71%), Meituan-W (3.61%), China Construction Bank (3.57%), Sberbank of Russia (2.46%), and Infosys (2.39%) [1]. - The index's market sector distribution shows that the Hong Kong Stock Exchange accounts for 49.93%, the National Stock Exchange of India for 36.63%, the Moscow Interbank Currency Exchange for 9.06%, the Rio de Janeiro Stock Exchange for 2.80%, and the Johannesburg Stock Exchange for 1.58% [2]. Group 3: Industry Composition - The industry composition of the index indicates that financials make up 24.26%, consumer discretionary 20.94%, communication services 20.13%, energy 12.37%, information technology 8.33%, consumer staples 2.75%, materials 2.23%, industrials 1.85%, healthcare 0.74%, and utilities 0.60% [2]. Group 4: Index Adjustment Mechanism - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [3]. - The adjustment process allows for a maximum sample change of 10%, with new samples prioritized based on their ranking and market capitalization [3].

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net inflows from northbound trading, with a total net buy of HKD 75.9 billion on June 10, 2023, indicating strong investor interest in certain stocks while others faced net sell-offs [1]. Group 1: Net Buying and Selling Stocks - Meituan-W (03690) led the net buying with HKD 17.86 billion, showing a net inflow of HKD 2.52 billion [2]. - Stone Pharmaceutical Group (01093) received a net buy of HKD 10.28 billion, with a net inflow of HKD 3.68 billion [2]. - Tencent (00700) faced the highest net sell of HKD 18.91 billion, with a net outflow of HKD 10.44 billion [2][6]. - Xiaomi Group-W (01810) saw a net sell of HKD 8.99 billion, with a net outflow of HKD 3.72 billion [2][7]. Group 2: Notable Company Insights - Meituan's strong merchant base and user reviews are expected to enhance its local business profitability, with new ventures likely to reduce losses [4]. - Stone Pharmaceutical Group is anticipated to secure significant overseas licensing deals, potentially exceeding USD 50 billion each, which could boost its revenue from business development [4]. - Xinda Biopharmaceutical (01801) is projected to benefit from positive clinical data and aims to have five drugs in global Phase III trials by 2030 [5]. - Crystal Technology Holdings (02228) is expected to experience short-term growth driven by policy incentives and long-term growth through customer retention and pipeline development [5]. Group 3: Market Sentiment and Future Outlook - The market's confidence in AI and cloud services has been shaken due to lower-than-expected capital expenditures and cloud revenue growth, but long-term potential remains positive as these technologies integrate into core business operations [6].

Group 1 - The Hang Seng Technology Index opened strong on June 9, with the Hang Seng Technology Index ETF (513180) following suit, driven by significant gains in stocks like Kingdee International, Tencent Music, Kuaishou, Meituan, JD Group, SMIC, and SenseTime [1] - The Hang Seng Index has added Midea Group and ZTO Express, while the Hang Seng Technology Index has included BYD and removed Reading Group [1] - Tencent Holdings has been actively repurchasing its shares, with a total buyback amount reaching HKD 75.07 billion over 15 trading days, and a total of HKD 285.33 billion in buybacks for the year to date [1] Group 2 - Companies often initiate stock buybacks when they believe their valuations are significantly undervalued by the market, which helps support stock prices and improve financial conditions [2] - The recent increase in stock buyback activity among Hong Kong-listed companies is attributed to their perception of being undervalued, with the Hang Seng Technology Index's latest P/E ratio at 20.72, indicating it is below 80% of its valuation over the past three years [2] Group 3 - The Hong Kong stock market is seeing a convergence of hard technology and new consumption, with the Hong Kong Consumption ETF (513230) covering e-commerce and new consumption sectors, which are relatively scarce compared to A-shares [3] - The Hang Seng Technology Index ETF (513180) includes both soft and hard technology, encompassing technology leaders that are also relatively scarce in A-shares [3]

Group 1: Market Overview - The Hong Kong stock market saw a net inflow of 35.16 billion HKD from Northbound trading on June 4, with 27.74 billion HKD from the Shanghai Stock Connect and 7.42 billion HKD from the Shenzhen Stock Connect [1] - The most bought stocks included Meituan-W (03690), Alibaba-W (09988), and BYD Company (01211), while the most sold stocks were Tencent (00700), Xiaomi Group-W (01810), and SMIC (00981) [1] Group 2: Stock Performance - Meituan-W (03690) recorded a net inflow of 14.13 billion HKD, driven by significant growth in new customers and sales during its recent promotional campaign [6] - Alibaba-W (09988) saw a net inflow of 6.19 billion HKD, with expectations of a 2 trillion RMB market opportunity in instant shopping by 2030 [6] - BYD Company (01211) had a net inflow of 3.93 billion HKD, planning to launch a low-cost micro electric vehicle in Japan and reporting a 15.3% year-on-year increase in May's new energy vehicle sales [7] - Sinopharm Group (01801) received a net inflow of 3.67 billion HKD, presenting promising clinical trial data for its innovative cancer treatment [7] - CSPC Pharmaceutical Group (01093) attracted a net inflow of 3.3 billion HKD, negotiating potential licensing deals worth up to 5 billion USD [8] - Xiaomi Group-W (01810) faced a net outflow of 13.75 billion HKD, with ongoing discussions about its automotive business profitability [8] - Tencent (00700) experienced a net outflow of 14.35 billion HKD, with management indicating that AI product monetization will take several quarters [9]

Summary of Tencent Holdings Investor Meeting Company Overview - **Company**: Tencent Holdings - **Sector**: Internet/e-Commerce - **Description**: Tencent is a leading provider of messaging services, value-added services, online games, and advertising in China, with Weixin having over 1 billion domestic accounts [10][11]. Key Takeaways from the Investor Meeting AI Product Development - Tencent is investing in AI products that are in the post-launch but pre-monetization phase, including: - **Yuanbao app**: Achieved product-market fit and moved to launch phase [1] - **QQ Browser**: Recently upgraded to AI Browser [1] - **Weixin AI**: Early in the product-market fit journey [1] - Monetization is expected to begin product by product after several quarters, funded through operating leverage from existing businesses [1]. - The near-term cost impact will primarily come from depreciation, with profit being back-end loaded in the GPU lifecycle [1]. Financial Projections - **Net Income (Adjusted)**: - 2023A: CNY 157,688 million - 2024A: CNY 222,703 million - 2025E: CNY 251,880 million [3] - **EPS**: - 2023A: CNY 11.99 - 2024A: CNY 20.63 - 2025E: CNY 22.65 [3] - **P/E Ratio**: - 2025E: 20.75x [3] Game Experience and User Retention - AI enhances game experience through improved player onboarding, coaching, interaction, and cheating prevention, leading to better user retention [2]. - Tencent's key mobile games have shown an upward trend in 30-day user retention [2][19]. Business Services Growth Drivers - The Business Services segment has four structural drivers: 1. Mini Shops commission 2. CRM service and WeCom enterprise software 3. Security and real-time communications solutions 4. GPU rental [3] - Tencent believes in the long-term potential of enterprise services in China, focusing on software services for better margins and competitive products [3]. Fintech Services Growth - The Fintech segment has three structural drivers: 1. Consistent growth in wealth management 2. Resumed growth in credit business 3. Improvement in payment business after a decline [15]. Mini Shops in Weixin Ecosystem - Mini Shops are rapidly growing GMV and enhancing linkages with other Weixin activities, with multiple successful eCommerce templates to learn from [14]. - Monetization potential includes higher take rates and improved ad targeting due to SKU-level granularity [14]. Investment Rationale - The company maintains a **Buy** rating due to: - Strong market leadership - Growth potential from Weixin monetization - Resilient game business growth - AI and eCommerce opportunities [11]. Risks and Opportunities - **Downside Risks**: 1. Competition from new platforms 2. Regulatory challenges in fintech and gaming 3. Weak macroeconomic conditions [23]. - **Upside Risks**: 1. Faster-than-expected macro recovery 2. Successful new game launches 3. Synergies from ecosystem collaborations [23]. Conclusion - Tencent Holdings is positioned for growth through its AI investments, strong game retention, and expanding business services. The company faces risks from competition and regulation but has significant upside potential from its diverse business segments and market leadership.

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Tencent Holding Ltd. is recommended as a growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 14%, with projected EPS growth of 19.2% this year, significantly higher than the industry average of 5.8% [4] Group 2: Financial Metrics - Tencent's year-over-year cash flow growth is 32.8%, outperforming the industry average of -5.1% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 14.6%, compared to the industry average of 13.2% [6] Group 3: Earnings Estimates - Current-year earnings estimates for Tencent have been revised upward, with the Zacks Consensus Estimate increasing by 1.2% over the past month [8] - The combination of a Growth Score of B and a Zacks Rank 2 indicates Tencent is a potential outperformer and a solid choice for growth investors [10]

Core Viewpoint - Tencent Holding Ltd. has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for Tencent for the fiscal year ending December 2025 is projected at $3.90 per share, reflecting a 19.3% increase from the previous year's reported figure [9]. - Over the past three months, the Zacks Consensus Estimate for Tencent has risen by 3.8%, indicating a trend of increasing earnings estimates [9]. Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, which is crucial for determining stock price movements [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and has shown a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [8]. - The upgrade of Tencent to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [11].