Sustainable Growth Advisers (SGA), an investment management company, released its fourth-quarter investor letter for its “Emerging Markets Growth Strategy.” A copy of the letter can be downloaded here. The fourth quarter of 2025 marked strong divergence from the market. Market leadership by AI beneficiaries and revival of cyclical sectors dominated the market, while quality growth strategies faced challenges. In Q4 2025, the portfolio returned 0.8% (Gross) and 0.6% (Net) compared to the MSCI EM Net TR Index ...

Core Insights - Huya Inc. has reported a return to growth with total net revenues increasing by approximately 10% year-over-year for Q3 2025, driven by stabilization in live streaming revenues and growth in game-related services, advertising, and other initiatives [3][6]. Financial Performance - Total net revenues for Q3 2025 reached RMB 1,688.3 million (US$ 237.1 million), up 9.8% from RMB 1,537.7 million in Q3 2024 [6][10]. - Live streaming revenues increased by 2.6% to RMB 1,156.7 million (US$ 162.5 million) compared to RMB 1,127.5 million in Q3 2024, attributed to higher average spending per paying user [6][10]. - Game-related services, advertising, and other revenues surged by 29.6% to RMB 531.6 million (US$ 74.7 million) from RMB 410.2 million in the same period last year, marking a significant milestone as this segment accounted for over 30% of total net revenues for the first time [4][7][10]. Cost and Profitability - Cost of revenues rose by 9.6% to RMB 1,461.6 million (US$ 205.3 million) due to increased revenue sharing fees and content costs, partially offset by lower bandwidth and server custody fees [8][10]. - Gross profit increased by 11.3% to RMB 226.6 million (US$ 31.8 million), with a gross margin of 13.4%, slightly up from 13.2% in Q3 2024 [9][10]. - Operating loss narrowed to RMB 14.3 million (US$ 2.0 million) from RMB 32.3 million in Q3 2024, indicating improved operational efficiency [12][10]. Income Metrics - Net income attributable to Huya Inc. was RMB 9.6 million (US$ 1.3 million) for Q3 2025, down from RMB 23.6 million in the same period last year [10][14]. - Non-GAAP net income attributable to Huya Inc. was RMB 36.3 million (US$ 5.1 million), compared to RMB 78.0 million in Q3 2024 [10][14]. - Average monthly active users (MAUs) for Q3 2025 stood at 162.3 million, reflecting the company's user engagement [10][22]. Strategic Outlook - The company aims to continue exploring growth opportunities while maintaining prudent cost management and preserving earnings quality [5]. - Huya's strategic transformation over the past two years has led to significant contributions from game-related services and advertising, indicating a successful shift in business focus [4][5].

Group 1: Company Overview - Tencent Music Entertainment Group (TME) is recognized as one of the best performing large cap stocks to buy [1] - TME operates as an online music entertainment platform, providing music streaming, online karaoke, and live streaming services in the People's Republic of China [4] Group 2: Recent Developments - On September 23, TME's Board of Directors approved the appointment of Jeanette Kim Yum Chan as a member of the audit committee, effective the same day [1] - Chan has been an independent director on the TME Board since September 2022 and currently serves as the chief legal, compliance, and risk officer at Airwallex [2] Group 3: Director Background - Before joining Airwallex, Chan was the managing partner of the China practice at Paul, Weiss, Rifkind, Wharton & Garrison LLP from 1986 to 2019, focusing on cross-border M&A and private equity investments [3] - Chan holds multiple legal qualifications and is authorized to practice law in New York, British Columbia, and Hong Kong, as well as being a non-practising solicitor of England and Wales [3]

Investment Rating - The report does not explicitly state an investment rating for the industry. Core Insights - The consumer market is transitioning from a focus on low prices to a new growth paradigm centered around content and emotional connection with consumers. Brands must enhance their storytelling capabilities to stand out in a competitive landscape [6][11]. - The report emphasizes the importance of "content narrative" in reshaping brand growth logic, moving from channel competition to winning consumer hearts [20][22]. - The rise of "explosive content live streaming" is highlighted as a method for brands to achieve significant sales growth and enhance brand value through effective storytelling [11][144]. Summary by Sections Part 1: Consumer Mindset Era - The traditional giants are facing challenges from new DTC brands as consumer choice shifts from supply-driven to demand-driven [20]. - Brands must deeply understand segmented consumer groups and focus on emotional connections rather than just functional needs [22][30]. - The report identifies a shift in consumer behavior towards emotional consumption, where consumers are willing to pay more for products that provide emotional satisfaction [31][32]. - The narrative ability of brands is crucial for success in the current consumer cycle, with live streaming evolving from a sales tool to a storytelling platform [41][45]. Part 2: Optimizing Live Streaming Operations - The report defines "explosive content live streaming" as a method that significantly enhances sales performance compared to ordinary live streams [143]. - It outlines the key elements of successful live streaming, including engaging hosts, innovative settings, and compelling product narratives [132][140]. - The data shows that "explosive content live streaming" can lead to a 200% increase in transaction flow and a significant boost in brand recognition [145][148]. Part 3: From Theory to Practice - The report provides a methodology for creating "explosive content live streaming" by focusing on user insights, content relevance, and effective marketing strategies [154]. - It emphasizes the need for brands to adapt their content to resonate with specific consumer groups and to leverage emotional triggers to drive engagement [94][96]. Part 4: Comprehensive Coordination of Traffic, Content, and Operations - The report discusses the integration of content, e-commerce, and advertising to enhance operational efficiency and drive sales growth [84][92]. - It highlights the importance of understanding consumer emotions and preferences to create targeted content that resonates with audiences [94][96]. Part 5: Summary - The report concludes that the future of brand growth lies in mastering narrative capabilities and building deep emotional connections with consumers, leveraging the unique advantages of live streaming as a storytelling medium [117][118].