Investment Rating - The report maintains a "Buy" rating for NetEase (NTES US) with a target price of $153.19, reflecting a 17.9x PE for the year 2025 [7][27]. Core Insights - NetEase's total revenue for Q2 2025 increased by 9% year-on-year to 27.9 billion RMB, slightly below consensus expectations by 1% [1][2]. - Adjusted net profit attributable to shareholders grew by 22% year-on-year to 9.53 billion RMB, aligning with consensus expectations [1][2]. - The gaming segment's revenue showed a 15% year-on-year increase to 22.1 billion RMB, although it was slightly below expectations [2][3]. - The company has a robust pipeline of new games, including "Destiny: Stars" and "Diablo II" remastered, which are expected to drive future growth [1][4][13]. Revenue and Profitability - Q2 gaming and value-added services revenue rose by 14% year-on-year to 22.8 billion RMB, with gaming revenue specifically increasing by 15% [2][3]. - Deferred revenue for Q2 exceeded expectations, decreasing by 4% quarter-on-quarter to 17 billion RMB [2]. - The gross margin for gaming and value-added services improved by 1.4 percentage points to 70.2% [2][12]. Game Development and Market Position - The company launched nine new games in May 2025, with significant titles in the pipeline, including "Destiny: Stars" and "Diablo II" remastered [3][4][13]. - The online peak for "Fantasy Westward Journey" reached 2.93 million users, marking a historical high [3]. - The mobile gaming segment is expected to see a recovery due to a low base in the second half of the year, with anticipated growth driven by summer activities and new releases [4][23]. Financial Forecasts - Revenue forecasts for 2025-2027 have been slightly adjusted downwards, with total revenue expected to be 115.5 billion RMB in 2025, reflecting a 0.9% decrease [6][23]. - Adjusted net profit forecasts for 2025-2027 have been revised to 38.9 billion RMB, 43 billion RMB, and 48 billion RMB respectively [6][23]. - The adjusted operating profit margin is projected to be 35.8% for Q2 2025, indicating a healthy profitability outlook [24].

Group 1 - Xiaomi Group's stock has dropped over 4%, currently at 51.6 HKD with a trading volume of 7.465 billion HKD [1] - In July, Xiaomi's vehicle deliveries exceeded 30,000 units, attributed to increased production capacity [1] - Guosen Securities reports that Xiaomi's Beijing factory phase two is about to commence production, with new capacity being planned [1] Group 2 - Future sales projections for Xiaomi's vehicles are estimated at 400,000 to 500,000 units in 2025, and potentially over 800,000 units in 2026 [1] - Reports indicate that Xiaomi is requiring users to pay the remaining balance in advance, or production will be suspended, with no official comment from the company [1] - Nomura has raised Xiaomi's target price by 79% to 61 HKD based on SOTP valuation, but downgraded the rating from "Buy" to "Neutral" due to limited upside potential [1] Group 3 - Nomura anticipates challenges for Xiaomi in the coming quarters, including lower-than-expected smartphone shipments and high sales base for IoT since the second half of 2024 [1] - Despite strong performance in the electric vehicle sector, market expectations remain high [1] - Jefferies noted a significant slowdown in the average selling price growth of Xiaomi's flagship smartphones in Q2 compared to Q1, indicating potential pressure on Q2 performance due to weak smartphone demand and high inventory [1]

Group 1: TAL Education (好未来教育) - The K12 education training business is performing steadily with a revenue of $580 million for Q1 FY2026, representing a 39% year-over-year increase. Adjusted operating profit reached $25 million, exceeding expectations [1] - The strong demand for small class tutoring and increased enrollment due to the expansion of teaching points are driving revenue growth. Sales of learning machines also showed healthy year-over-year growth, supported by the launch of new products [1] - For Q2 FY2026, the overall revenue growth is expected to be around 30%, maintaining the full-year revenue growth forecast at 28% with an adjusted operating profit margin projected to exceed 7%, doubling from FY2025 [1][2] Group 2: NIO Inc. (蔚来汽车) - The pricing strategy for the L90 model is aggressive, with the starting price set at RMB 265,800, which is lower than the previously announced pre-sale price. This pricing is expected to boost sales significantly [3] - The successful launch of the L90 model is anticipated to lead to stable monthly sales exceeding the market expectation of 5,000 units, paving the way for the upcoming L80 model [3][4] - Despite a 50% rebound from its low, NIO's 2025 price-to-sales ratio remains at 0.85, which is lower than its peers, indicating potential for continued stock price recovery [4]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo with a target price of $135.58 per ADS [5][12]. Core Views - The Q1 performance of Pinduoduo fell short of expectations, with revenue of CNY 956.7 billion, a year-over-year increase of 10.2%, but below the Bloomberg consensus estimate of CNY 1,016.0 billion [9]. - Non-GAAP net profit for Q1 was CNY 169.2 billion, a significant decline of 44.7% year-over-year, also missing the consensus estimate of CNY 278.8 billion [9]. - The report highlights that while advertising revenue showed good performance, commission income was under pressure due to increased merchant support policies and adjustments in the Temu business [9]. Financial Forecasts and Investment Recommendations - Revenue projections for Pinduoduo are adjusted to CNY 4,403 billion, CNY 4,883 billion, and CNY 5,250 billion for 2025, 2026, and 2027 respectively [3][11]. - Non-GAAP net profit estimates are revised to CNY 1,072 billion, CNY 1,317 billion, and CNY 1,499 billion for the same years [3][11]. - The report employs a Sum-of-the-Parts (SOTP) valuation method, estimating the main e-commerce platform's value at $143.9 billion, the Duoduo grocery business at $5.9 billion, and the Temu business at $42.7 billion [12][14]. Key Financial Metrics - For 2025, the expected operating revenue is CNY 440,349 million, with a year-over-year growth of 12% [10]. - The projected operating profit for 2025 is CNY 112,152 million, reflecting a 3% increase from the previous year [10]. - The report anticipates a gross margin of 61.1% and a net margin of 22.1% for 2025 [10].

Core Viewpoint - Macquarie has raised Alibaba's target price by 3% from HKD 176.3 to HKD 182.3, maintaining an "Outperform" rating and recommending buying on dips [1] Financial Projections - The adjusted EBITA forecasts for the fiscal years ending March 2026 and 2027 have been lowered by 1% and 2% respectively, reflecting the performance of segment profit margins [1]

Investment Rating - The report maintains a "Buy" rating for Tencent with a target price of HKD 614.34 [6] Core Insights - Tencent's 1Q revenue grew by 13% year-on-year, exceeding consensus expectations by 2.5%. The adjusted net profit increased by 22% year-on-year, also surpassing expectations by 2.5% [1][4] - The growth in the gaming sector is expected to remain robust despite high base effects in the upcoming quarters, driven by the long-term operation of Tencent's games and the expansion of WeChat's mini-store [1][4] - The advertising business saw a significant increase, with 1Q advertising revenue growing by 20.2% year-on-year, and WeChat's mini-store advertising consumption increasing nearly fourfold from February to April [2][4] Revenue and Profitability - For 2025, Tencent's revenue is projected to reach RMB 735.52 billion, with a year-on-year growth rate of 11.4%. The adjusted net profit is expected to be RMB 262.69 billion, reflecting a growth of 17.95% [5][30] - The gross profit margin for 1Q was reported at 55.8%, indicating a year-on-year improvement [31] Business Segments - The value-added services segment, which includes gaming, saw a 17% year-on-year increase in revenue, with domestic game revenue growing by 24% [3][31] - The advertising segment's revenue growth was driven by a 60% increase in video account revenue, highlighting the effectiveness of Tencent's advertising strategies [2][31] Future Outlook - The report anticipates continued growth in Tencent's revenue and adjusted net profit for 2026 and 2027, with slight adjustments to previous forecasts due to changes in capital expenditure and depreciation rates [4][30] - The introduction of AI capabilities and the establishment of an independent e-commerce department within WeChat are expected to further enhance Tencent's growth potential [10][12]