Chinese stocks struggled today after President Donald Trump said additional tariffs on Chinese imports are slated to go into effect Tuesday. Hong Kong's Hang Seng Index fell 3.3%, suffering one of its worst days since mid October.Shares of Alibaba (BABA -2.91%) traded 2.7% lower as of 11:30 a.m. ET, while shares of Tencent (TCEHY -2.84%) traded 2.4% lower. Shares of GDS Holdings (GDS 0.40%) initially slid almost 8% in pre-market trading but had recouped most of those losses by 11: 30.Trump may be more serio ...

JR Research is an opportunistic investor. He was recognized by TipRanks as a Top Analyst. He was also recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP. He identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. He has also demonstrated outperformance with his picks. He focuses on identifying growth investing opportunities that present the most attracti ...

Core Viewpoint - Alibaba's fiscal third-quarter results indicate a rebound in its e-commerce business and strong growth in artificial intelligence, leading to a significant stock rally [1][2]. E-commerce Business - Alibaba's e-commerce segment, including Tmall and Taobao, remains its largest business, experiencing a solid 5% growth in the fiscal third quarter to $18.6 billion, with a notable 9% growth in its third-party business [3][5]. - The growth in e-commerce is attributed to higher gross merchandise value (GMV) and a high take rate [5]. - The company reported double-digit growth in its 88VIP premium memberships, reaching 49 million by the end of the quarter [6]. Cloud Computing and AI - The cloud intelligence group saw a revenue increase of 13% to $4.3 billion, with AI-related revenue growing by triple digits for the sixth consecutive quarter [7]. - Adjusted EBITA for the cloud segment rose 33% to $430 million, with the company highlighting its foundational AI model Qwen 2.5-Max [7]. - Alibaba plans to invest aggressively in AI infrastructure over the next three years, aiming for artificial general intelligence (AGI) [8]. Financial Performance - Overall revenue increased by 8% to $38.4 billion, with adjusted earnings per American depositary share climbing 13% to $2.93 [9]. - Free cash flow was reported at $5.3 billion, and the company ended the quarter with $54.8 billion in cash and short-term investments [10]. Market Position and Valuation - Alibaba's stock is considered undervalued, trading at a forward price-to-earnings ratio under 15 for fiscal 2026 estimates and a price/earnings-to-growth (PEG) ratio under 0.4 [14]. - The company is positioned as a leader in AI in China, recently securing a deal with Apple for AI services [12][13]. - The Chinese government's support for tech companies in the AI sector is seen as beneficial for Alibaba's growth prospects [13].

Summary of Key Points from the Conference Call Industry and Company Focus - **Industry Focus**: The report primarily discusses the **China equity market**, with a specific emphasis on sectors such as **Media & Entertainment**, **Information Technology**, and **Consumer Discretionary**. It also addresses **Materials**, **Energy**, **Telecoms**, and **Utilities** sectors. - **Companies Highlighted**: Key companies mentioned include **Alibaba**, **Meitu**, **Espressif Systems**, **HKEX**, and **Ningbo Tuopu Group**. Core Insights and Arguments - **Sector Upgrades**: - **Media & Entertainment** and **IT** sectors upgraded from **Equal Weight (EW)** to **Overweight (OW)** due to anticipated inflows driven by China's tech competitiveness and lower AI costs [2][10]. - **Consumer Discretionary** sector also upgraded to **OW** with increased active risk, favoring companies that are quick to adopt technology [2][10]. - **Sector Downgrades**: - **Materials** downgraded to **Underweight (UW)** due to construction slowdowns and capex delays [3][10]. - **Energy** sector downgraded to **UW** based on cautious oil price outlook [3][10]. - **Telecoms** and **Utilities** moved to **EW**, reflecting a less defensive stance [3][10]. - **Valuation Improvements**: - Structural improvements in **Return on Equity (ROE)** and a shift in valuation regime for offshore Chinese equities are expected, with MSCI China's 12-month forward P/E ratio projected to sustain a range of **10-12x**, up from **8-10x** [4][10]. Notable Company Additions and Rationale - **Meitu (1357.HK)**: - Maintains over **50%** market share in China's photo application market, with a successful monetization strategy and improving governance. Expected to achieve a **44% CAGR** in net profit by 2026 [14][10]. - **HKEX (0388.HK)**: - Anticipated growth in trading volume due to a more sustainable growth model in China and rising IPO volumes [15][10]. - **Alibaba (BABA.N)**: - Positioned to capture AI cloud opportunities with a forecasted doubling of cloud revenue from **Rmb118 billion** in F25 to **Rmb240 billion** in F28 [16][10]. - **Espressif Systems (688018.SS)**: - Expected to benefit from edge AI opportunities and a comprehensive product portfolio, despite current supply-demand imbalances [17][10]. - **Ningbo Tuopu Group (601689.SS)**: - Positioned to capitalize on the commercialization of humanoid robots, with a projected **31% YoY** earnings growth in 2025 [20][10]. Performance Metrics - **Focus List Performance**: - The **China/HK Focus List** and **China A-share Thematic Focus List** have performed on par with their respective benchmarks over a rolling 12-month basis. However, both underperformed by **4.3 percentage points** and **4.4 percentage points** respectively over the last month [25][26]. Additional Important Insights - **Market Sentiment**: The report indicates a shift in market sentiment towards a more positive outlook for China equities, driven by technological advancements and government support for the private sector [4][10]. - **Investment Strategy**: The focus is on companies that are proactive in tech adoption and have strong market momentum, while avoiding traditional business models that are negatively impacted by deflation [2][10]. This summary encapsulates the key points from the conference call, highlighting the strategic shifts in sector allocations, company-specific insights, and overall market performance metrics.

Core Viewpoint - The article introduces a new ranking method called Prompt-to-Leaderboard (P2L) that allows users to input any prompt and receive real-time rankings of large models, identifying the most suitable model for that prompt [1][10]. Group 1: P2L Ranking Mechanism - P2L ranks models based on their performance in response to specific prompts, enabling users to find the model that best addresses their needs [1][10]. - The ranking is dynamic, with models being evaluated in real-time as prompts are entered, showcasing their scores and relative performance [5][9]. - The system highlights the differences in model performance based on the nature of the prompt, such as the impact of content restrictions on rankings [7][10]. Group 2: Model Performance Examples - For a mathematical prompt, the model "03-mini-high" achieved the highest score of 1228, demonstrating its effectiveness in handling numerical tasks [5]. - In a prompt requiring HTML, CSS, and JS code for a 3D Earth, the model "Nous-Hermes-2-Mixtral-8x7B-DPO" scored 1257, indicating its proficiency in programming tasks [9]. - The rankings for prompts related to sensitive or inappropriate content showed that less restricted models performed better, while those with strict guidelines ranked lower [7][10]. Group 3: Additional Features and User Interaction - The platform offers a "P2L Router" feature that automatically selects the best model to respond to user prompts, enhancing user convenience [22][24]. - Users can explore various categories and subcategories to compare model performance across different tasks, providing a comprehensive view of model capabilities [18][20]. - The system also allows for user feedback and interaction, raising questions about the reliability and optimization of the ranking mechanism [25][26]. Group 4: Methodology and Evaluation - P2L utilizes a Bradley-Terry (BT) model to predict user preferences based on specific prompts, aiming to provide a more accurate ranking than traditional global rankings [29][30]. - The methodology focuses on the impact of prompts on model performance, allowing for tailored evaluations that reflect real-world usage scenarios [31][32]. - Experimental results indicate that P2L outperforms traditional ranking methods, particularly as the scale of models and datasets increases [35].

Core Insights - Nvidia's shares experienced a significant increase, rising as much as 5.6% due to strong demand for its processors in a key market [1] - A report indicated that major Chinese companies have significantly increased orders for Nvidia's H20 chips, countering concerns about competition from a new AI model developed in China [3] - Nvidia is set to release its fiscal 2025 fourth quarter results, which will provide insights into ongoing demand for AI and its new Blackwell processor [4] Demand and Market Developments - The release of a next-generation AI model by DeepSeek in China initially raised concerns about reduced demand for Nvidia's processors [2] - Major Chinese firms like Tencent, Alibaba, and ByteDance have ramped up orders for Nvidia's H20 chips, indicating robust demand despite competitive pressures [3] Financial Performance Expectations - Management has projected a revenue growth of approximately 70% year over year, while analysts expect around 73% growth for the quarter [5] - Despite a remarkable 448% increase in stock value over the past three years, Nvidia's stock remains reasonably priced at less than 30 times next year's earnings estimates [5]

Core Viewpoint - JD.com has demonstrated significant stock performance, with a 56.9% increase over the past six months, outperforming key indices and competitors [1][4]. Financial Performance - JD.com's Q3 2024 net revenues rose by 5.1% year-over-year to RMB260.4 billion (US$37.1 billion), surpassing analyst expectations [4]. - Non-GAAP net income attributable to ordinary shareholders increased by 23.9% to RMB13.2 billion (US$1.9 billion), resulting in a net margin of 5.1%, up from 4.3% a year earlier [4]. - The Zacks Consensus Estimate for 2025 revenues is projected at $166.43 billion, indicating a 6.22% year-over-year growth, while earnings estimates suggest a 7.73% growth [6]. Share Repurchase Program - JD.com has completed a $3 billion share repurchase program and initiated a new $5 billion program set to run through August 2027, reflecting management's confidence in the company's intrinsic value [5]. Supply Chain and Market Position - The company's success is attributed to its focus on supply chain capabilities and logistics infrastructure, which has been pivotal in China's trade-in program for home appliances [8]. - The general merchandise category, especially supermarket items, saw an 8% year-over-year revenue increase, with active customer engagement metrics showing double-digit growth [9]. User Ecosystem Enhancements - JD.com is enhancing its user ecosystem with new features, including a gift-giving option and upgrades to the JD PLUS membership program, which now offers lifestyle services and expanded shipping options [10][11]. - JD PLUS members spend an average of 10 times more than non-members annually and increase their spending by 150% after subscribing [11]. Valuation and Competition - JD.com is trading at a forward 12-month P/E of 8.9X, significantly lower than the industry average of 24.13X, indicating a potential investment opportunity despite concerns about China's economic growth [12]. - The company is expanding into high-margin segments like fashion and beauty, with investments of RMB3 billion and RMB1 billion, respectively, to compete with Alibaba's Tmall [15]. - JD Logistics has partnered with Alibaba's Taobao and Tmall platforms, allowing merchants to utilize JD's logistics services, which could enhance JD's logistics revenues [16]. Investment Outlook - Despite JD.com's strong performance and valuation, a cautious approach is recommended for new investors due to recent stock appreciation and uncertainties in China's economic recovery [17][18]. - Current shareholders may justify holding their positions based on JD's strong fundamentals and ongoing share repurchases [18]. - The timing of new investments should consider potential market volatility in 2025, when the effects of government stimulus and strategic investments may become clearer [18].

I am Shubhm Thakkar, an MBA student at the Indian Institute of Management—Indore. I cleared the CFA Level 1 examination that was held in May 2023 and the CFA Level 2 conducted in November 2024. IIM Indore consistently ranks in the Financial Times Top 100 Schools for MBA/ MiM.I have experience publishing on Seeking Alpha as part of my internship at Que Capital, which was a subsidiary of AlmaStreet Capital LLC—an entity that previously published on this platform. At AlmaStreet, I followed a GARP Approach - Gr ...