Summary of Key Points from the Conference Call Industry Overview - The focus is on the China Internet sector, particularly the major players known as BAT (Baidu, Alibaba, Tencent) and their responses to advancements in AI technology [1][2]. Core Insights - **Lower Training/Inference Costs**: The reduction in costs associated with training and inference is expected to accelerate the adoption of AI technologies, benefiting BAT companies [1][2]. - **Market Sentiment**: The market is anticipated to prioritize management comments regarding AI applications and monetization over traditional core business performance during earnings reports [2]. - **Stock Performance**: Since the emergence of "DeepSeek" on January 24, HSTECH has increased by approximately 20%, driven by AI developments from ByteDance and Alibaba, as well as partnerships like Apple-BABA [2]. Company-Specific Insights - **Tencent**: - Remains the top pick due to breakthroughs in consumer-facing AI applications. The share price has increased by 22%, but it has lagged behind Alibaba's 40% increase since "DeepSeek" emerged. The expectation is that this trend will reverse as focus shifts to AI applications and monetization [3]. - Anticipated growth in consumer applications, particularly through super apps like Weixin, is seen as a catalyst for future performance [3]. - AI-driven ad technology upgrades are already contributing positively to revenue [3]. - **Alibaba (BABA)**: - Maintained an equal-weight rating, with a highlighted high-end cloud value estimated at US$40 per share. The company is recognized as a leading hyperscaler and LLM developer [3]. - Projected cloud revenue growth is estimated at 18% per annum, reaching RMB 163 billion (US$21 billion) by fiscal year 2027, with a steady-state EBITA margin of 15% [3]. - Under a bullish scenario, cloud revenue could grow at 20-25%, reaching RMB 179 billion (US$23 billion) by fiscal year 2027, with a higher EBITA margin of 20% [3]. - **Baidu (BIDU)**: - An equal-weight rating is maintained, with concerns about potential disruptions to its core search business from generative AI and uncertainties regarding monetization strategies in the face of rising competition from Tencent and ByteDance [4]. Additional Considerations - **Risks**: - For Tencent, risks include intensified competition in social networks and online video, which could drive up costs and necessitate more aggressive content investments [15]. - For Alibaba, risks include regulatory scrutiny and potential slower recovery in core e-commerce monetization [12]. - For Baidu, the risks are centered around the effectiveness of its AI strategy and competition in the search market [4]. Conclusion - The conference call highlighted the significant impact of AI advancements on the China Internet sector, with Tencent positioned favorably due to its consumer applications, while Alibaba and Baidu face challenges and opportunities in their respective domains. The overall sentiment suggests a cautious optimism as companies navigate the evolving landscape of AI technology and market competition [1][2][3][4].

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 February 16, 2025 06:09 PM GMT M Update Geely Automobile Holdings | Asia Pacific One-off gain from ZEEKR-Lynk integration Geely recorded a Rmb6.47bn gain following completion of the Lynk & Co integration by ZEEKR Tech Group, per a company announcement. Although this is a non-cash one-off, it should help mitigate the YoY base effect when comparing to the group's 2024 earnings, which were boosted by a handsome one-off gain (~Rmb7.5bn). Following the integration, we should see syne ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 February 16, 2025 05:41 PM GMT China Materials | Asia Pacific Demand Tracker – February 14 Per 100NJZ, the work resumption rate of sampled construction projects was 23.5% in the 2nd week after holiday, remaining lower YoY. Production/sales of industrial goods: According to CISA, daily crude steel output of major steel producers in early-Feb was 2.133mnt, +1.1% vs. late-Jan, and +5.9% YoY. Per Sxcoal, coal supply is resuming faster than demand after Chinese New Year, with the the ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 16 February 2025 | 6:59PM HKT EHang (EH): Operator Certificate to accelerate eVTOL commercialization; Expanding footprint in China; Buy Earnings revision: We revised up EHang earnings by 1%/ 6%/ 9% in 2025-27E mainly on higher revenues of EH216-S, supported by accelerated EH216-S deliveries on clients' expanding commercial applications of eVTOL post obtaining OC. Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors sh ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 14 February 2025 | 1:59PM EST Energy, Utilities & Mining Pulse: Investors Asking: What Moved Stocks This Week? This week in the Pulse we ask our senior analyst team to discuss key themes or headlines that moved stocks this week. On the macro, the team reflects on recent developments around tariffs and the regulatory environment and the potential stock implications. Additionally, the team discusses micro drivers including stocks where there is a dislocation in the valuation or op ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 February 16, 2025 10:00 PM GMT Asia | Asia Pacific Three Actionable Ideas Silergy – OW | GDS – OW | Suncorp – OW Source: Morgan Stanley Research, DataStream Refinitiv, Bloomberg. Performance data as at Feb 11, 2025. Cumulative outperformance: against local benchmarks. Holding period total return measures performance when idea was effective. **Avg. 12M total return measures performance of all ideas (closed and active) from Feb 11, 2024, to Feb 11, 2025, and does not adjust for bu ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 14 February 2025 | 2:24PM EST Apple Inc. (AAPL): December 2024 China phone data shows m/m acceleration BOTTOM LINE: December 2024 China foreign branded phone shipments - which we view as a proxy for Apple iPhone shipments in China - increased 1% yoy, marking the best monthly year-over-year growth since July 2024 (+3% yoy) and a sharp improvement from -47% yoy in the prior month (November 2024). That said, foreign branded phone shipments continued to lag the overall market with C ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 14 February 2025 | 11:15AM EST Americas Retail: Retail sales decline in January; December restated higher Of the 15 categories, 8 accelerated on a year over year basis compared to last month, including DIY, Food & Beverage, Food Services, General Merchandise, Department Stores, Gas Stations, Miscellaneous, and Health & Personal. On a two-year stack, of the 15 categories, 2 accelerated on a year over year basis compared to last month, including Food & Beverage and Gas Stations. O ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 Japan Portfolio Strategy Tariffs headwind vs. 3Q results tailwind: Continue to expect earnings growth to lift Japan stocks Japanese equities have rebounded after navigating the January BOJ rate hike without incident. However, headwinds for global equities, including Japan, have re-strengthened since early February, after President Trump signed executive orders to impose tariffs on imports from Canada, Mexico, and China, raising concerns about a potential trade war. We believe ea ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 February 16, 2025 11:00 PM GMT Global Steel M Global Idea Global Implications of US Universal 25% Tariff on Steel Chris Jiang Equity Analyst Chris.Jiang@morganstanley.com +852 3963-1593 The latest move by the US to impose 25% tariffs on all steel imports without exception reinforces our view of an increasingly regionalized steel trade. In this report we assess global implications of this development and highlight those potentially advantaged and challenged by this move. Morgan S ...