Core Viewpoint - The AI sector is experiencing a resurgence despite concerns over a potential debt-fueled bubble, highlighted by Oracle's recent $18 billion loan for a new data center [1][2]. Group 1: Investment Strategies - American companies are financing massive data centers through debt, while Chinese firms are focusing on efficiency with leaner infrastructure [2][3]. - U.S. cloud giants are projected to spend nearly $700 billion on data centers by 2027, contrasting sharply with China's major players, who are expected to spend just under $80 billion, creating a 10 to 1 gap in capital spending [4]. Group 2: Performance and Benchmarking - Despite the significant difference in investment, Chinese models like Kimmy K2 and Alibaba's Quen are performing at levels comparable to top American models [4]. - The emerging narrative suggests that while American firms are building on borrowed money, Chinese firms are achieving similar performance with far less capital [2][4]. Group 3: Market Sentiment and Future Outlook - The contrasting investment strategies may lead to increased investor skepticism regarding the sustainability of the trillion-dollar promises made by American tech giants [6]. - As Chinese internet giants prepare to report earnings and provide fresh capital expenditure outlooks, the market may start to pay closer attention to these developments [5].

GameFi 行业动态 - YouTube 禁令引发恐慌，但 Web3 游戏仍占 DApp 活动的 28% [1] - GameFi 代币持续下跌，尽管 Web3 游戏占据了 DApp 活动的 28% [1] - Tatakai 获得来自腾讯、YGG 和 Immutable 的 700 万美元投资 [1] - Moonfrost 转型至 Steam 平台 [1] - TAC Protocol 正在开发中，但该行业略有衰退 [1]

Tencent and Hon Hai are expected to show how stronger AI demand lifted earnings, signaling optimism for Asia’s broader ambitions in the field amid a tug-of-war for AI dominance against US rivals https://t.co/kMp1PhC2d5 ...

Summary of Luxshare (A) Conference Call Company Overview - **Company**: Luxshare - **Sector**: Technology - **Key Customers**: Apple, Google, Microsoft, HP, Dell, Lenovo - **Sales Breakdown**: 80% consumer segment, 9% communication, 6% automotive, 3% computing [12][13] Key Industry Insights - **iPhone Demand**: Luxshare is a key assembler for iPhone 17/Pro Max models, with expected shipments of 239 million, 250 million, and 258 million units in 2025, 2026, and 2027 respectively, surpassing the previous high of 238 million units in 2021 [2][32][33] - **AI Server Growth**: Luxshare is a significant supplier for AI-related projects, benefiting from the build-up of AI datacenters in China and partnerships with global tech giants like Google, Cisco, and Microsoft [3][12] Financial Performance - **Earnings Growth**: Luxshare's earnings are projected to grow at a CAGR of over 25% from 2024 to 2027, driven by the iPhone upcycle and increasing contributions from automotive and communication sectors [13][18] - **Recent Earnings**: In Q3 2025, Luxshare reported earnings of CNY 4.8 billion, a 35% QoQ and 32% YoY increase, exceeding guidance [29][30] - **Q4 Guidance**: Expected earnings for Q4 2025 are projected to be between CNY 5.0 billion and CNY 5.7 billion, indicating a 9% QoQ and 24% YoY growth [31] Valuation and Price Target - **Price Objective**: Raised from CNY 50 to CNY 78, reflecting a P/E ratio of 24x for 2H26-1H27E, aligning with historical averages [1][14] - **Current Share Price**: CNY 63.00, with a market cap of CNY 457.24 billion [7] - **P/E Comparison**: Luxshare trades at 20x 2026-27E average P/E, below the Apple supply chain's 24x and AI server peers' 24-26x [25][29] Key Financial Metrics - **Net Income Projections**: - 2025E: CNY 16.88 billion - 2026E: CNY 21.29 billion - 2027E: CNY 27.55 billion [4][20] - **EPS Growth**: Expected to increase from CNY 2.33 in 2025 to CNY 3.80 in 2027, with a YoY growth rate of 25.9% in 2025 and 29.4% in 2027 [4][20] - **Free Cash Flow**: Projected to rise from CNY 4.33 billion in 2025 to CNY 30.19 billion in 2027 [4] Strategic Outlook - **AI and Technology Integration**: Luxshare's collaboration with OpenAI and other tech giants positions it well for future growth in the AI sector, with potential projects expected to materialize by 2027 [3] - **Market Positioning**: The company is expected to benefit from a stronger execution strategy compared to peers, enhancing its ability to capitalize on opportunities in the AI era [15] Conclusion - **Investment Recommendation**: The company maintains a "Buy" rating, supported by strong earnings growth, strategic positioning in the iPhone supply chain, and expanding opportunities in AI and technology sectors [1][13]

Summary of the SG Bernstein China Next Winners Basket Conference Call Industry Overview - The conference call focuses on the **China equities market**, particularly highlighting innovative growth companies in strategic sectors as part of the **SG Bernstein China Next Winners Basket** [1][7][18]. Key Points and Arguments 15th Five-Year Plan Insights - The **15th Five-Year Plan (FYP)** emphasizes high-quality development, technological self-sufficiency, and green transition, with a long-term GDP per capita target to reach middle-income status by **2035** [11][22]. - Key areas prioritized include: - **Technology and Innovation**: Growth in semiconductors and AI is expected [12]. - **Advanced Manufacturing**: New companies in automation and robotics are emerging [13]. - **Green Technology**: China aims for **50% penetration of electric vehicles** and full electrification by the end of the decade [14]. - **Healthcare**: Opportunities arise from an aging population and advancements in drug development [15]. - **Domestic Consumption**: A shift towards experience over material goods is noted [16]. - **Urban Air Mobility**: China seeks to dominate the low-altitude economy with proactive regulations [16]. Earnings Growth Projections - For the **2024-2027** period, **Discretionary, Communication, Technology, and Healthcare** sectors are expected to contribute around **75%** of EPS growth [17][29]. SG Bernstein China Next Winners Basket - The basket includes **42 innovative growth companies** across four sectors: - **Technology (60%)**: Includes Internet platforms and semiconductors. - **Industrials (13%)**: Focus on factory automation and humanoid robots. - **Consumer & Retail (20%)**: Reflects changing consumer preferences. - **Healthcare (6%)**: Emphasizes advancements in drug development [18][33]. Market Performance and Valuation - The basket is market-cap-weighted with a **15% cap** at inception, focusing on firms listed in **Hong Kong, Shanghai, Shenzhen, and the US** [34]. - The forward P/E ratio for the basket is **22.3**, compared to **13.7** for MSCI China, with a projected CAGR of **16.5%** for the basket versus **9.8%** for MSCI China [42]. Sector-Specific Highlights - **Tech Hardware**: Luxshare's growth in AI and optical transceivers is noted, with a **50% YoY growth** in its communication business [52]. - **Internet**: China is positioned as a leader in AI innovation, with significant potential for cloud services driven by AI [55]. - **Global Energy Storage**: The eVTOL market is projected to grow at a **30% CAGR**, with China leading in orders and regulatory advancements [60]. - **Industrial Technology**: Companies like Inovance are highlighted for their scalable product portfolios and profitable growth [68]. - **Autos**: Rapid adoption of L2+ ADAS features in vehicles, with a projected near-universal adoption by **2030** [69]. - **Pharma & Biotech**: Focus on globalization and pipeline competitiveness, with companies like Hengrui and Innovent identified as potential winners [74]. - **Consumer Trends**: A shift towards value-driven consumption is noted, with sectors like freshly-made beverages and wellness products highlighted [79]. - **Food & Beverages**: Instant retail is transforming the beer market, benefiting local brewers [82]. Additional Important Insights - The emphasis on **original innovation** and breakthroughs in key technologies marks a shift from previous plans, indicating a more aggressive stance on technological advancement [23]. - The **urban air mobility** market is expected to see significant growth, supported by regulatory frameworks and infrastructure development [16][62]. - The **healthcare sector** is evolving with a focus on R&D capabilities and a shift from imitation to innovation [15]. This summary encapsulates the key insights and projections discussed during the conference call, providing a comprehensive overview of the strategic direction and investment opportunities within the Chinese equities market.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Online Entertainment Sector - **Performance**: Online entertainment has been a significant outperformer year-to-date (YTD) within the China internet sector, driven by robust consumer spending on leisure and favorable investor positioning amid macro uncertainties [2][8] Core Insights - **Earnings Season Expectations**: A mixed Q325 earnings season is anticipated for online entertainment, with potential positive surprises from companies like Bilibili and Kuaishou. NetEase is favored for its revival in evergreen titles and upcoming launches [2][3] - **Gaming Sector Divergence**: Following a strong YTD performance in online gaming, divergence is expected as new game launches from A-share companies are priced in. Preference remains for ADR/H game companies based on new game catalysts and healthy evergreen title portfolios [3][9] - **Advertising Sector**: Slight acceleration in Q3 ad performance is noted, with uncertainty around new tax policies. Companies like Tencent, Bilibili, and Kuaishou are expected to outperform due to improvements in adtech and monetization [4][9] - **Media Sector**: Overall quiet results are expected for the online media sector, with a positive outlook on long-form video (LFV) regulation, although its impact may take time to materialize [5][20] Company-Specific Insights - **Bilibili**: - Price target raised to US$37.00 from US$30.00, reflecting a 23.3% increase. The company is expected to benefit from the successful launch of "Escape From Duckrov," which had a peak of 222k concurrent players on Steam [3][14][17] - Q325 estimates remain unchanged, but Q425 game revenue is raised by 5% due to better-than-expected contributions from new titles [13][17] - **NetEase**: - Expected solid Q325 results with game acceleration, particularly with the upcoming global launch of "Where Winds Meet" on November 15 [3][9][10] - **Kuaishou**: - Positive outlook based on fundamental outperformance and AI capabilities, with key focuses on ad revenue guidance and e-commerce outlook [9][10] - **iQiyi**: - Q325 topline expected to be flat QoQ, with ad revenue projected to decline by 3% due to macro conditions. Adjusted net profit estimates lowered by 17-25% [19][20] - **Weibo**: - Negative revisions expected due to slower consumption trends, although limited valuation downside is noted with a projected 8% dividend yield [9][10] Additional Insights - **Short Dramas Growth**: The growth momentum of short dramas is expected to continue, driven by consumer demand for fragmented video content and a flexible business model compared to LFV [8] - **Regulatory Environment**: The recent LFV regulation is seen as a major positive for iQiyi, although its benefits may take time to materialize [5][20] Financial Metrics - **Bilibili's Financials**: - Non-GAAP operating profit for Q4 expected to be Rmb862 million, with a margin of 10.4% [13][17] - Total revenues for FY2025 estimated at Rmb30.285 billion, with a YoY growth of 12.9% [17][18] - **iQiyi's Financials**: - Expected non-GAAP operating loss of Rmb25 million for Q325, with a net loss of Rmb135 million [19][20] This summary encapsulates the key points from the conference call, highlighting the performance and expectations for the online entertainment sector and specific companies within it.

AI Adoption & Impact - Over 50% of new production code is AI-generated, indicating a significant shift in software development practices [1] - More than 90% of engineers are using AI coding assistants daily, highlighting the widespread integration of AI in software engineering workflows [1] Verification & Trust - The industry faces the challenge of verifying the reasoning behind AI-generated code that shapes real systems [1] - There is a growing need for solutions like zkML to ensure the trustworthiness and reliability of AI-driven software [1]

Group 1 - The "Double Eleven" event has become a major showcase for new business models such as live-streaming e-commerce, content seeding, and instant retail, demonstrating significant explosive growth and providing strong support for the long-term investment logic of the Hong Kong internet sector [1] - The user base for generative AI in China has rapidly increased, surpassing 515 million in just six months, positioning AI as a key narrative for the fourth quarter and potentially leading to a new round of asset revaluation in the Hong Kong stock market [1] - The Hong Kong stock market is experiencing enhanced capital attraction due to a global shift towards emerging markets amid a rate-cutting cycle, with the technology and internet sectors being particularly favored by international investors [1] Group 2 - Despite short-term adjustments, the upward trend of the Hong Kong stock market remains intact, with current upward momentum driven by favorable industry conditions and accelerated AI development in China [1] - The Hang Seng Internet ETF (513330) supports T+0 trading and focuses on the internet platform economy, including major players like Alibaba, JD.com, Tencent, Meituan, Kuaishou, and Baidu, making it a valuable tool for investors looking to capitalize on AI applications and core assets in the "AI + internet" space [1]

Market and Performance Overview - Emerging markets experienced a 10.6% increase in Q3 2025, outperforming developed markets, with China leading at 20.4% growth driven by AI opportunities and favorable valuations [2] - Taiwan and Korea also showed strong performance, rising 14.3% and 12.7% respectively, fueled by AI demand, with Taiwan being a key semiconductor manufacturer and Korea a memory product supplier [2] Sector Performance - The materials sector was the top performer, up 24%, largely due to rising gold prices boosting mining shares [4] - Technology-related sectors, including communication services, consumer discretionary, and IT, outperformed the overall market, benefiting from AI and Internet services [4] - Cyclical sectors generally underperformed, with energy and financials showing the greatest weakness [4] Company Contributions - In China, Tencent and CATL were significant contributors, with Tencent benefiting from strong operating results and positive market sentiment, while CATL capitalized on its leadership in battery supply amid rising EV demand [6] - Taiwan's Delta Electronics and South Korea's Samsung Electronics saw share price increases due to their critical roles in AI development, with Delta's market share in data centers and Samsung's memory supply benefiting from high AI demand [7] Portfolio Positioning - The ClearBridge Emerging Markets Strategy outperformed its benchmark, with strong stock selection in China, Taiwan, and South Korea offsetting negative impacts from China and India [5] - New purchases included Sieyuan Electric, expected to grow through grid investment and market share gains, and HD Hyundai Electric, which is positioned to benefit from global power equipment demand [12][13] Outlook - The long-term investment outlook for emerging markets remains robust, with expectations for technology adoption, urbanization, and services sector growth to drive returns [18] - Emerging markets are anticipated to succeed in the next 12 months, particularly in technology, with India expected to recover and China continuing its key role in the asset class [22]

Summary of Key Points from the Conference Call Industry and Companies Involved - **Industry**: Internet & New Media - **Key Companies**: Alibaba (BABA), Tencent (700 HK), Baidu (BIDU), Pinduoduo (PDD), JD (JD US), Trip.com (TCOM), JD Health (JDH), Tencent Music (TME), J&T (1519 HK) Core Insights and Arguments Alibaba (BABA) - **Investor Sentiment**: Dominated discussions, with US investors generally underweight on BABA while Chinese mutual funds are bullish [1][2] - **Ecommerce Concerns**: US investors express caution regarding BABA's ecommerce business, citing that customer management revenue (CMR) growth of ~10% year-on-year is driven by increased take-rate rather than improved gross merchandise volume (GMV) [2] - **Quick Commerce (QC) Potential**: The outlook for BABA's ecommerce is improving due to QC, which is expected to enhance cross-selling opportunities and increase transactions in offline retail [3] - **Market Penetration Forecast**: Retail quick commerce penetration is projected to rise to 14% from ~10%, potentially reaching nearly CNY2 trillion by 2028, representing about 25% of BABA's ecommerce scale [4] - **Losses and Recovery**: Estimated losses for the September quarter are CNY36 billion, up from CNY11 billion in the previous quarter, but expected to narrow to CNY21 billion in the December quarter due to improved operational efficiency [5] - **Cloud Business Recognition**: BABA's cloud business is viewed as a long-term growth driver, with significant interest in its AI capabilities, particularly its self-designed chips and Qwen LLM [6] Tencent (700 HK) - **Investor Confidence**: Generally favored by investors, with expectations of higher-than-expected earnings growth of +12% year-on-year for 3Q25F [8] - **Business Momentum**: Strong performance in online gaming and advertising, particularly through its short video service, Video Account [8] - **Target Price**: Maintained target price of HKD757, implying a 20% upside [8] Baidu (BIDU) - **Hedge Fund Interest**: Hedge funds are becoming more positive on Baidu due to its Robotaxi and chip-design businesses, with recent chip orders worth over CNY1 billion from China Mobile [9] - **Execution Concerns**: Despite positive sentiment, there are significant concerns regarding Baidu's execution and the weak state of its advertising business, which is crucial for cash flow [10][11] Pinduoduo (PDD) and JD (JD US) - **PDD Favorability**: PDD is gaining favor among investors, with expectations of improving profitability from 3Q25 onwards [12] - **JD's Investment Strategy**: JD's significant investment in quick commerce is viewed skeptically by some investors, although there are signs of narrowing losses [14] - **Outlook for JD Retail**: Concerns about JD Retail's outlook due to tough comparisons starting from 4Q onwards [14] Trip.com (TCOM) - **Investor Loyalty Amid Concerns**: Long-only investors remain loyal to TCOM despite growing unease about macroeconomic headwinds and competition risks [16] - **Competition Risks**: Increased competition from brands like Agoda may require TCOM to invest more in overseas markets, potentially capping margin expansion [17] - **Revenue Forecast**: Below-Street forecast for TCOM's non-GAAP operating margin and revenue growth due to soft travel demand in China [18] Vertical Leaders - **Valuation Concerns**: JD Health, Tencent Music, and J&T are viewed positively for their growth potential, but their valuations are a concern as they trade above 20x FY26F P/E [19] Other Important Insights - **Market Dynamics**: The discussions reflect a divergence in sentiment between US and Chinese investors, particularly regarding Alibaba and Baidu, highlighting the impact of geopolitical tensions and market conditions on investment decisions [6][10]