Investor Presentation_ 2025 Outlook_ A Year of Uncertainties

Industry Overview * 2025 Outlook: The document highlights that 2025 will be characterized by external uncertainties (tariffs, sanctions) and internal uncertainties (policy, competition). However, internet companies are expected to navigate these challenges through AI strategies, overseas expansion, and capital returns. * Key Themes: The document emphasizes the importance of AI, overseas expansion, and capital return as key strategies for internet companies to thrive in 2025. * Market Outlook: The document provides a bullish outlook for the internet and other services sector, with sector revenue expected to grow by 9% YoY and operating profit by 16% YoY in the base case scenario. Company Analysis * Tencent (0700.HK): Tencent is identified as the top pick for the internet and other services sector. The document highlights Tencent's strong position in social and gaming, as well as its potential for growth through AI applications and capital management. * Trip.com (TCOM.O): Trip.com is considered a preferred consumption recovery play with overseas opportunities. The document notes Trip.com's strong position in the online travel agency (OTA) market and its potential for growth through overseas expansion. * Meituan (3690.HK): Meituan is also identified as a preferred consumption recovery play with overseas opportunities. The document highlights Meituan's strong position in the local services market and its potential for growth through overseas expansion. * Alibaba Group Holding (BABA.N): Alibaba is rated equal-weight due to intense e-commerce and search competition. The document notes Alibaba's strong position in the e-commerce market and its potential for growth through AI and cloud computing. * JD.com (JD.O): JD.com is rated equal-weight due to intense e-commerce and search competition. The document highlights JD.com's strong position in the e-commerce market and its potential for growth through AI and logistics. * Kuaishou (1024.HK): Kuaishou is rated equal-weight due to intense e-commerce and search competition. The document notes Kuaishou's strong position in the short video market and its potential for growth through overseas expansion. * Baidu (BIDU.O): Baidu is rated equal-weight due to intense e-commerce and search competition. The document highlights Baidu's strong position in the search engine market and its potential for growth through AI applications. Valuation and Shareholder Returns * Valuation: The document provides valuation metrics for various companies in the internet and other services sector, including market capitalization, price-to-earnings ratio, and price-to-book ratio. * Shareholder Returns: The document provides information on shareholder returns for various companies, including total capital return, dividend yield, and share buyback programs. Risks and Considerations * External Uncertainties: The document highlights external uncertainties such as tariffs, sanctions, and policy changes as potential risks for the internet and other services sector. * Internal Uncertainties: The document also notes internal uncertainties such as competition and regulatory changes as potential risks for the sector. * Market Volatility: The document acknowledges that market volatility can impact the performance of internet and other services companies. Conclusion The document provides a comprehensive analysis of the internet and other services sector, highlighting key themes, company analysis, valuation, and risks. The document offers valuable insights for investors looking to understand the potential opportunities and challenges in the sector.