DAHENG Jianguo International: Tencent (00700.HK) is believed to be the preferred choice in the industry, and is also bullish on Meituan (03690.HK) and Ctrip (09961.HK).
Industrial Bank International released a report stating that most of the covered Chinese Internet companies have reported better-than-expected second-quarter profits, although revenues only meet or fall below expectations. The only exception is Meituan (03690.HK), which has exceeded expectations in both revenue and profit. The bank observed that due to macroeconomic uncertainty and low consumer confidence, the revenue growth of most companies has slowed down. On the other hand, the continuous improvement of profit margin is driven by factors such as ongoing cost optimization and efficiency improvement, changes in revenue structure, and improved competitive landscape. Except for PDD Holdings (PDD.US), most companies also attach more importance to share buybacks and
US stock market closing: US stocks staged a "V-shaped" big reversal, with Nvidia soaring more than 8%; solar concept stocks and lithium stocks rose across the board, with first solar rising more than 15% and Albemarle rising more than 13%
The core CPI in the US in August exceeded expectations, and the market believes that the Federal Reserve will not make a significant interest rate cut next week. The US stock market fell at the beginning of trading, with the Dow Jones Industrial Average falling more than 740 points at one point. Huang Renxun emphasized the high demand for AI chips, and Nvidia, which had the largest increase in six weeks, led the US stock market to rebound in a V-shape, with the Nasdaq rising more than 2% and chip stocks rising nearly 5%. The US presidential debate boosted solar stocks, while Trump media fell more than 10% to the lowest level since its backdoor listing in March. Brent oil climbed back above $70, breaking away from a three-year low.
China's technology stocks have fallen to a new low in valuation. They will benefit if there is an improvement in macroeconomic and consumer prospects.
Liang Xiangyi, Managing Director of Asia Telecommunications and Internet Research at Citic Lyon Securities, stated that the performance of China's technology industry in the first half of the year was good, with mid-term profits increasing by 37% year-on-year. Many companies' second-quarter performance exceeded market expectations. However, the average valuation of the technology sector as of the end of August was only 10.6 times, reaching a historical low.
Express News | Ctrip: The "Golden Week" holiday travel bookings are booming, with airfare prices falling by over 20%.
US stock market anomaly | Ctrip fell 1.6% before the market opened. The average price of domestic flights during the Mid-Autumn Festival has dropped by more than 20% compared to the summer peak.
GLONGHUI September 9 | Ctrip (TCOM.US) US stocks fell 1.6% to $46.8 before the market. According to the news, the Mid-Autumn Festival holiday travel market is slightly lackluster. OTA platforms and travel agencies all claim that product prices are basically the same as in the off-season. According to air travel data, as of September 5, the average ticket price (excluding tax) for domestic routes during the Mid-Autumn Festival holiday was about 710 yuan, down more than 20% from the summer travel period.
Hong Kong stock concept tracks | Mid-Autumn travel service bookings significantly higher than Dragon Boat Festival. The prosperity of the travel sector continues to rise (with concept stocks).
As of now, the domestic hotel, domestic car rental, domestic ticket booking volume has all recorded double-digit growth compared to the same period in 2019; and compared to the Dragon Boat Festival holiday, the overall booking volume of the Mid-Autumn Festival holiday is also significantly larger.
Is the Mid-Autumn Festival tourism market not booming? The prices of airfare and hotels are the same as the off-season, and long-distance outbound tours during the National Day holiday are still popular.
From the perspective of OTA platforms and travel agencies, the prices of air tickets, hotels, and travel products during the Mid-Autumn Festival holiday this year are basically the same as usual. Long-haul outbound tours during the National Day holiday are still popular, with popular products from travel agencies such as Chunqiu Travel and utour group selling out.
US stocks closed with mixed performance for the three major indexes. Tesla rose more than 9% over the past two days, while NIO soared 14% after its performance announcement.
Before the non-farm data, there is new evidence of the cooling of the US job market, and economic concerns support a substantial rate cut bet. The yield curve of the 2-year/10-year US Treasury bonds, which briefly inverted for the third time in two years. The S&P 500 fell for the third consecutive day, with Broadcom falling more than 4% after hours, Tesla rising nearly 5%, and Nvidia and Chinese concept stocks rising nearly 1%. The yen reached a one-month high, and the offshore renminbi rose by 300 points to break 7.09 yuan. Gold rose briefly by 1%, and oil prices rose more than 2% before falling. US oil fell below $70 for the first time in 15 months over two days.
US stocks are moving differently. Ctrip rose 1.2% before the market, and institutions believe that Ctrip still has the potential to maintain a faster growth rate than the industry.
On September 5th, Ctrip (TCOM.US) rose 1.2% in pre-market trading, with a price of $47.94. On the news front, Huachuang Securities stated that domestic and cross-border tourism during this summer continued to maintain a high level of prosperity, with a year-on-year increase of 6.7% in railway passenger traffic and an 11% year-on-year increase in civil aviation passenger traffic from July 1st to August 20th. With the improvement of online rate and customer acquisition advantages, the bank expects Ctrip to continue to maintain a growth rate faster than the industry.
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Express News | Fidelity Greater China Fund reduced its holdings of ICBC, Kweichow Moutai, and TSMC, and cleared its positions in Luxshare Precision, while increasing its holdings of PetroChina.
Express News | Ctrip: The average price of domestic flights during the Mid-Autumn Festival holiday has decreased by 25% compared to the previous year.
U.S. stock market outlook | Tesla's pre-market trading rose nearly 1%, with August sales in China reaching the best performance of the year; Nvidia plans to expand software and datacenter offerings, providing AI one-stop services.
The Big Short on Wall Street: If the non-farm is strong enough, the laggards of the US stock market are expected to catch up; Informed sources said that WeChat and iPhone do not need to 'choose one out of two', but the 'apple tax' game is still ongoing.
Profitable, buyback more! Citibull is bullish on chinese internet plus-related companies
In the second quarter, among the 41 internet companies covered by Citigroup, 16 companies exceeded revenue expectations, while 30 companies reported earnings that exceeded expectations. Multiple companies also increased their share buyback efforts in the second quarter. Citigroup expects the profit prospects of internet companies to further improve in the second half of the year.
Express News | Citigroup: Tencent is the preferred choice for Chinese internet stocks, and is also bullish on Meituan and Ctrip, etc.
Major bank rating | Citi: Chinese internet stocks bullish on Tencent, also optimistic about Meituan and Ctrip.
On September 3, Glodog issued a report stating that the profit growth rate of mainland internet stocks in the second quarter of this year exceeded the revenue growth rate. It is believed that the revenue for this quarter may fall below expectations due to macro challenges and companies' proactive reduction of subsidies to focus on quality returns. This in turn supports more companies to achieve stronger profit growth. Several companies significantly accelerated their buybacks in the second quarter, which helps to reassure investors of management commitments and support confidence in future growth prospects. The bank pointed out that Tencent is still the bank's top choice among domestic internet stocks in the second half of this year, and it is also bullish on Meituan and Ctrip's related service business. The bank is also optimistic about Manbang's growth potential.
The number of people entering and leaving mainland China during the summer vacation reached a record high of 0.11 billion.
According to the National Immigration Administration, during this summer vacation (July to August), a total of 0.11 billion Chinese and foreign personnel entered and exited the country under the guarantee of border inspection agencies nationwide, with an average daily number of 1.779 million, reaching a new high and an increase of 30% compared to the same period last year, and an increase of 13% compared to May and June. The highest daily number of entries and exits was 2.237 million on August 24, reaching 97.2% of the historical peak.
Express News | Citigroup: Chinese internet companies are expected to continue reducing subsidies to improve profitability, with Tencent as the preferred stock.
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