Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research>HSBC Research: Valuation of CN Internet Stocks Not Yet Overpriced; TENCENT/ BABA-W Most Benefited by AI Growth
Recommend 38 Positive 66 Negative 25 |
||||
|
||||
|
HSBC Global Research issued a research report anticipating that AI and game sectors will continue to lead. However, with higher valuations, the broker considered more factors such as earnings resilience. HSBC Global Research believed that large-cap stocks will offer better risk-reward profiles, and liked TENCENT (00700.HK), BABA-W (09988.HK), NetEase (NTES.US), KUAISHOU-W (01024.HK) and PDD Holdings (PDD.US), with all rated at Buy. The Chinese internet industry has performed well YTD, with KraneShares Trust KraneShares CSI China Internet ETF(KWEB.US) soaring a total of 38% within the year, the report noted. The 1-year forward PE ratio has expanded from 14x to 21x, narrowing the valuation discount with large US internet stocks. Even so, large cap Chinese internet stocks are trading at only 16x PE ratio, compared to a 10-year average of 20x, indicating valuations are not yet demanding. In terms of earnings resilience and certainty, the broker believed that TENCENT and BABA-W will benefit the most from AI-related growth. TENCENT's earnings in 2026 are more likely to have upside potential due to the recovery of profit shares from its associates and joint ventures. In the game sector, TENCENT and NetEase are HSBC Global Research's top picks. Revenue growth from the recovery of traditional games may drive profit margin surprises that the market has likely underestimated. AASTOCKS Financial News Website: www.aastocks.com |
||||
Copied to Clipboard
 |
||||
