TME(US:TME) Zhao Yin Guo Ji·2025-11-13 03:39Core Insights - The report highlights a mixed performance in the Chinese stock market, with Hong Kong stocks rising, particularly in healthcare, conglomerates, and real estate, while consumer discretionary, industrials, and materials lagged behind [3] - Southbound capital saw a net inflow of HKD 4.286 billion, with notable net purchases in Xiaomi Group, Xpeng Motors, and Pop Mart, while Alibaba, Hua Hong Semiconductor, and SMIC experienced the most significant net sales [3] - The report anticipates a trend of style switching in the Chinese stock market, with undervalued sectors like chemicals, consumer goods, and banks leading the gains, expected to continue at least until mid-December when policy stimulus clarity increases [3] Market Performance Summary - The Hang Seng Index closed at 26,923, up 0.85% for the day and 34.21% year-to-date [1] - The Hang Seng Tech Index closed at 5,934, with a slight increase of 0.16% for the day and a year-to-date increase of 32.81% [1] - The Shanghai Composite Index closed at 4,000, down 0.07% for the day but up 19.34% year-to-date [1] Sector Performance Summary - The Hang Seng Financial Index closed at 49,396, up 1.20% for the day and 40.58% year-to-date [2] - The Hang Seng Real Estate Index closed at 19,533, with a significant increase of 3.34% for the day and 30.98% year-to-date [2] - The Hang Seng Utilities Index closed at 38,428, up 1.17% for the day and 7.75% year-to-date [2] Company Analysis - Tencent Music reported a 21% year-on-year revenue growth to RMB 8.46 billion for Q3 2025, with Non-IFRS net profit increasing by 33% to RMB 2.41 billion, exceeding Bloomberg consensus estimates by 3% and 4% respectively [4] - The report projects a slowdown in revenue growth to 12% year-on-year for Q4 2025, primarily due to normalization of offline performance revenue [4] - The target price for Tencent Music has been adjusted from USD 29.5 to USD 28.0, maintaining a "Buy" rating [4]