Group 1 - On December 27, 57 Hong Kong-listed companies conducted share buybacks, totaling 30.92 million shares and an aggregate amount of HKD 1.093 billion [1][2] - Tencent Holdings repurchased 1.68 million shares for HKD 702 million, with a highest price of HKD 420.60 and a lowest price of HKD 415.60, bringing its total buyback amount for the year to HKD 110.726 billion [1][2] - Anta Sports repurchased 1.0452 million shares for HKD 83.3808 million, with a highest price of HKD 80.00 and a lowest price of HKD 79.35, totaling HKD 977 million in buybacks for the year [1] - AIA Group repurchased 1.0970 million shares for HKD 62.0331 million, with a highest price of HKD 57.00 and a lowest price of HKD 56.25, accumulating HKD 32.2 billion in buybacks for the year [1] Group 2 - The highest buyback amount on December 27 was from Tencent Holdings at HKD 702 million, followed by Anta Sports at HKD 83.3808 million, and AIA Group among others [1] - In terms of share quantity, the largest buyback was conducted by CSPC Pharmaceutical Group with 6.2 million shares, followed by Kanglong Chemical and COSCO Shipping Development with 2.9518 million and 1.9280 million shares respectively [1]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 485.21 per share [24][18] Core Views - WeChat Mini Stores are leveraging Tencent's social ecosystem to drive supply and demand, creating a unique lightweight social e-commerce model [17] - The "Gift Sending" feature in WeChat Mini Stores is expected to enhance user engagement and drive incremental growth for merchants [34] - WeChat Mini Stores have established a solid foundation with over RMB 2 trillion in GMV from mini-programs in Q3 2024, primarily driven by e-commerce transactions [21][17] - The integration of public and private domain traffic in WeChat Mini Stores is expected to enhance user conversion and repeat purchases [29] Financial Projections - Revenue is projected to grow by 8.0% in 2024 to RMB 657.9 billion and by 8.4% in 2025 to RMB 713.0 billion [18][19] - Non-GAAP net profit is expected to increase by 45.0% in 2024 to RMB 221.8 billion and by 10.2% in 2025 to RMB 244.4 billion [18][19] - Non-GAAP EPS is forecasted to rise from RMB 16.13 in 2023 to RMB 23.93 in 2024 and RMB 26.38 in 2025 [19] WeChat Mini Stores and Social E-commerce - WeChat Mini Stores are positioned as the core e-commerce component within WeChat, integrating public and private domain traffic to drive transactions [27][29] - The "Gift Sending" feature is expected to create new demand scenarios, especially during festive seasons like Chinese New Year, potentially replacing traditional red packet gifting [34] - Merchants with WeChat Mini Stores will receive priority in search results, enhancing visibility and driving traffic [64] Market Performance and Valuation - Tencent's stock is expected to outperform the market by more than 15% over the next 12 months [56] - The company's Non-GAAP PE ratio is projected to decrease from 16.7x in 2023 to 14.6x in 2025, indicating potential undervaluation [19]

Group 1 - The total buyback scale in the Hong Kong stock market reached 262.3 billion HKD in 2024, setting a historical record, as listed companies engaged in share repurchases to stabilize stock prices and manage market value [1] - Major companies such as HSBC Holdings, AIA Group, and Meituan-W each executed buybacks exceeding 10 billion HKD [2] - Tencent Holdings led the buyback activities with over 110 billion HKD, focusing on sectors including information technology, finance, non-essential consumer goods, and healthcare [3]

Group 1 - Tencent Holdings has received net purchases from southbound funds for four consecutive days, with a cumulative net purchase amount of 44.24 billion HKD and a stock price increase of 3.45% [1] - On December 24, the total trading volume of active stocks through the Hong Kong Stock Connect was 159.69 billion HKD, with a net purchase amount of 20.56 billion HKD [1] - On the same day, Tencent Holdings had a trading volume of 14.87 billion HKD through the Hong Kong Stock Connect, with a net purchase amount of 0.63 billion HKD [1]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700 HK) [3] Core Viewpoints - Tencent's AI strategy focuses on "industrial practicality" with a dual emphasis on large models and applications The company has been investing in AI since 2012 and has developed a comprehensive AI ecosystem including the Hunyuan large model and various AI tools and applications [3] - Tencent's AI layout covers both B2B and B2C sectors with applications integrated into existing products and new AI-native applications The company's AI capabilities are ranked first in 8 out of 11 core tasks in the SuperCLUE Chinese Large Model Benchmark [21] - The report predicts Tencent's adjusted net profit for 2024-2026 to be 2174 2406 and 2653 billion yuan respectively with corresponding PE (Non-IFRS) ratios of 17 15 and 14 times [21] Development History - Tencent began its AI journey in 2012 with the establishment of the YouTu Lab focusing on computer vision technologies [13] - In 2016 Tencent established the AI Lab which focused on computer vision speech recognition natural language processing and machine learning [14] - In 2018 Tencent upgraded its AI strategy to focus on general AI research and established the Robotics X lab [15] - In 2022 Tencent publicly disclosed the development of its Hunyuan large model which covers NLP CV and multimodal capabilities [17] - By 2024 Tencent's Hunyuan large model had been tested in over 600 internal business scenarios and launched AI-native applications like Tencent Yuanqi and Tencent Yuanbao [18] AI Layout and Applications - Tencent's AI ecosystem includes both B2B and B2C applications with B2B focusing on large models cloud services and PaaS while B2C includes AI-enhanced existing applications and AI-native applications [20] - The Hunyuan large model developed by Tencent has trillion-scale parameters and excels in multimodal capabilities including text-to-image and video generation [25] - Tencent has integrated AI into various internal applications such as Tencent Meeting WeChat and QQ with nearly 700 business scenarios already using the Hunyuan model [26] - Tencent's AI applications in advertising have significantly improved ad targeting and efficiency with the new ad system 3 0 covering 95% of Tencent's ad placements and improving stability by 26% [53] - In gaming Tencent's AI engine GiiNEX has reduced the time required for city modeling from 5 days to 25 minutes [55] Financial Projections - The report forecasts Tencent's operating income for 2024-2026 to be 658160 716550 and 782730 million yuan respectively with year-on-year growth rates of 8 07% 8 87% and 9 24% [24] - Tencent's adjusted net profit for 2024-2026 is expected to be 217396 240603 and 265288 million yuan with year-on-year growth rates of 38% 11% and 10% respectively [24] - The PE (Non-IFRS) ratios for 2024-2026 are projected to be 17 15 and 14 times [21]

Investment Rating - The report initiates coverage with a "Buy" rating for Tencent Holdings, citing its leadership in the internet and gaming sectors, and its potential to benefit from the continued growth of the gaming industry [1][95] Core Views - Tencent is China's largest social platform company, with a massive user base that provides a solid foundation for its various businesses As of Q2 2024, QQ has 571 million monthly active users (MAUs), while WeChat has 1 371 billion MAUs [1] - Tencent is a leader in China's gaming industry, with a 48 2% market share in 2023 The company is expected to benefit from the growth of the mobile gaming industry, which is projected to grow at 4 65%, 3 91%, and 3 30% from 2024 to 2026 respectively [1] - Video accounts are a key growth driver for Tencent's advertising business In Q2 2024, the company's online advertising revenue grew 19% YoY to RMB 29 9 billion, driven by video accounts and long-form video content [1] - Tencent is one of the duopolies in China's payment industry, with WeChat Pay and Alipay accounting for over 94% of the market share in Q3 2023 The third-party personal payment market is expected to grow at 10 8%, 9 7%, and 8 9% from 2024 to 2026 respectively [1] Business Segments Social and Communication - QQ and WeChat are Tencent's core social tools As of Q2 2024, QQ has 571 million MAUs, while WeChat has 1 371 billion MAUs [1][51] - Video accounts are a strategic growth area for Tencent, with significant user engagement and advertising revenue growth In 2023, video account advertising revenue exceeded RMB 3 billion in Q2, and the annual GMV surpassed RMB 100 billion [55][56] Gaming - Tencent is the leader in China's gaming industry, with a 48 2% market share in 2023 The company has over 170 self-developed and licensed games, including popular titles like "Honor of Kings" and "PUBG Mobile" [1][65] - The mini-game market is growing rapidly, with 750 million active users in February 2024, accounting for 80 3% of the total traffic Tencent's mini-game revenue grew over 30% YoY in H1 2024 [1][65] Online Advertising - Tencent's online advertising revenue grew 22 65% YoY in H1 2024, driven by video accounts and long-form video content The company expects the online advertising business to grow at 19%, 21%, and 23% from 2024 to 2026 respectively [88][90] FinTech and Business Services - Tencent's FinTech and Business Services segment is benefiting from the growth of the third-party payment and cloud services markets The third-party personal payment market is expected to grow at 10 8%, 9 7%, and 8 9% from 2024 to 2026 respectively [76][77] - Tencent Cloud holds a 16% market share in China's cloud infrastructure services market in Q2 2024 The company is leveraging its AI capabilities, such as the Hunyuan large model, to attract more customers [81][82] Financial Performance and Valuation - Tencent's revenue grew 9 82% YoY in 2023 to RMB 609 015 billion, with a net profit of RMB 115 216 billion The company expects revenue to grow at 8 56%, 9 24%, and 10 13% from 2024 to 2026, with net profit growing at 47 86%, 12 22%, and 13 13% respectively [2][95] - The company's EPS is expected to be RMB 18 38, RMB 20 63, and RMB 23 34 for 2024, 2025, and 2026 respectively, with a PE ratio of 20 16x, 17 96x, and 15 88x based on the closing price of HKD 402 80 on November 27, 2024 [95] Industry Outlook - China's mobile gaming industry is expected to grow at 4 65%, 3 91%, and 3 30% from 2024 to 2026, driven by the recovery of the economy and the normalization of game license approvals [68] - The online advertising market is projected to grow at a CAGR of 11% from 2024 to 2029, with video accounts playing a significant role in driving Tencent's advertising revenue growth [73][74]

Core Insights - Tencent has launched the CarbonX Program 2.0 to advance climate technologies and capabilities for achieving net-zero emissions by 2050, expanding its focus from China to global innovations [1][2] - The program aims to address the challenge that 75% of necessary decarbonization solutions rely on immature technologies, aligning with the goals of the Paris Agreement [2] Program Details - CarbonX 2.0 will invest tens of millions of dollars in early-stage technologies across four key areas: - Carbon Dioxide Removal (CDR) with pilot projects in Kenya [3] - Long-Duration Energy Storage (LDES) with 100-kilowatt pilot projects in the Maldives [3] - CCUS for the Steel Industry with projects in Serbia [3] - CarbonXmade (CCU) focusing on integrating captured carbon into consumer products [3] Partnerships and Ecosystem - The program has formed partnerships with various industry leaders including China Resources, Conch Cement, and Unilever, as well as investment partners like Africa Climate Ventures and Lightspeed China Partners [4] - Ecosystem partners include the African Development Bank and the Global CCS Institute, enhancing the program's collaborative efforts [4] Application Process - The application period for proposals is open until May 2025, welcoming submissions from startups, established companies, and research institutions [5] - The selection process consists of two phases: - Phase one will shortlist 10 to 15 teams by September 2025 [6] - Phase two will select 1 to 3 winning teams by February 2026, which will receive funding and resources [7] Event and Context - CarbonX 2.0 was unveiled at the Sustainable Social Value Innovation Summit in Beijing, aimed at fostering discussions on achieving the UN Sustainable Development Goals [8]

Group 1 - The company focuses on GARP (growth at a reasonable price) stocks while also exploring various investment opportunities [1] - There is no specified time horizon for investments; the company holds stocks as long as the investment thesis remains valid [1] - The company has developed market-beating algorithms using Python to identify attractive investment opportunities within its portfolio since 2016 [1] Group 2 - The company has experience working at TipRanks as an analysis/news writer and editor, which has enhanced its market awareness and understanding of reader interests [2] - Attention to detail is emphasized, with a recognition of the prevalence of misinformation and "fluff" in the market [2] - The company's goal is to provide accurate and useful information to its audience [2] Group 3 - The company was previously associated with Investor's Compass [3]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [2][3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4][5] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Viewpoint - Tencent Holding Ltd. has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4][6]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for Tencent's earnings per share (EPS) for the fiscal year ending December 2024 is projected at $3.21, reflecting a year-over-year increase of 39% [9]. - Over the past three months, the Zacks Consensus Estimate for Tencent has risen by 5.5%, indicating a trend of increasing earnings estimates [9]. Zacks Rating System - The Zacks rating system is based solely on changes in a company's earnings picture, making it a reliable tool for investors to gauge stock performance [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting their superior earnings estimate revision features [10][12]. Market Implications - The upgrade to Zacks Rank 1 for Tencent suggests that the stock is likely to experience buying pressure and an increase in price due to improved earnings outlook [4][6]. - The correlation between earnings estimate revisions and near-term stock movements underscores the importance of tracking these revisions for investment decisions [7][5].