With the heavy release of Meituan's performance after the Hong Kong stock market on the 28th, the Q2 performance of the star network technology stocks in Hong Kong has been finalized. Looking at the top 10 network technology stocks by market cap, the trends of each company on the day after the results can be described as mixed, with an equal number of increases and decreases, each with 5.

Apart from Tencent, the stock price fluctuations of the other 9 companies are all above 4%, with Meituan, Ctrip, and Xiaomi's increases all exceeding 9%, Netease's decline exceeding 10%, and Tencent Music plunging over 18%.

According to the ranking of post-performance trading day increases, Futu News has sorted and reviewed the Q2 performance of the star network technology stocks in Hong Kong, for reference by all Mooer.

Meituan

$MEITUAN-W (03690.HK)$ Yesterday after the Hong Kong stock market announced its performance, the company's Q2 revenue was 82.25 billion yuan, a 21% year-on-year increase; Q2 adjusted net profit was 13.6 billion yuan, a significant increase of 77.6% year-on-year, exceeding market expectations across the board.

The company's highlights are reflected in the core business's local revenue achieving steady growth in the second quarter, with real-time delivery transactions increasing by 14.2% year-on-year to 6.167 billion transactions. In addition, the significant narrowing of losses in new business operations by 75% is also one of Meituan's surprises this quarter.

Meituan is also confident in its business outlook and prospects. The company's board of directors has approved a share buyback of up to $1 billion, which undoubtedly adds a shot in the arm to the market. As of today's close in Hong Kong stocks, Meituan has soared over 12%.

Morgan Stanley has raised Meituan's target price and rating. The target price has been increased by 4% to HKD 125 and the rating has been upgraded from "in line with the market" to "buy".

Morgan Stanley pointed out that Meituan's adjusted net profit in Q2 this year performed better than expected. The management is more optimistic about the prospects, including new businesses and food delivery, and it is expected that this will lead to a rise in market profitability. Contrary to market concerns, Morgan Stanley believes that Meituan’s delivery business will grow steadily in the second half of the year, with an estimated full-year operating profit of 30 billion RMB in 2024, thus upgrading the rating.

At the same time, Morgan Stanley stated that compared to e-commerce stocks, it is more bullish on Meituan. Morgan Stanley has raised Meituan's revenue forecast for 2024-2025 by 2-3%, and adjusted profit forecast by 6-8%. The latest target price is HKD 125, equivalent to a 22% upside. The current market price is only 10-11 times the forecasted PE ratio for 2025.

Ctrip Group

$TRIP.COM-S (09961.HK)$ Meituan announced its performance before the Hong Kong stock market opened on August 27. The company's Q2 revenue was 12.788 billion RMB, a year-on-year increase of 13.5%, and the adjusted net profit was 4.985 billion RMB, a year-on-year increase of 45.2%.

Ctrip continued to be supported by strong travel demand in the second quarter, resulting in double-digit growth in revenue and net profit. The financial report shows that the company's domestic accommodation bookings grew by 20%, and outbound hotel and air ticket bookings have fully recovered to pre-pandemic levels in 2019. The total revenue of the international platform increased by 70%.

Strong performance helped boost Ctrip's stock price by more than 9%.

Morgan Stanley pointed out that it is expected that Ctrip's profit in Q3 will increase both year-on-year and quarter-on-quarter. It maintains a "buy" rating and a target price of $59 for Ctrip.

UBS also maintains a "buy" rating and a target price of $70 for Ctrip.

UBS believes that investors will react positively to Ctrip's performance and have a bullish outlook on the company's domestic and outbound tourism prospects in the second half of the year, as well as the profitability trend.

Xiaomi Corporation rose 2.64%.

After the Hong Kong stock market closed on August 21, $XIAOMI-W (01810.HK)$ the company announced its performance. Q2 revenue hit a new record high, with a year-on-year growth of 32% and double-digit growth for three consecutive quarters; adjusted net profit increased by 20.1% year-on-year.

As for the highly anticipated car-making business, Xiaomi achieved a revenue of 6.2 billion yuan in the second quarter, with a gross margin of 15.4% for its innovative business segments such as smart electric vehicles. Xiaomi stated that it expects to achieve its goal of delivering 0.1 million new cars for the SU7 model ahead of schedule in November this year.

With the announcement of Lei Jun's 'best quarter in history', Xiaomi's stock price soared more than 9% on the day of its post-earnings trading.

Citi believes that Xiaomi's second quarter performance exceeded expectations and expects the stock price to react positively to the strong profitability of its electric vehicle business. It has slightly raised the company's target price to HK $22.7 and raised its profit forecast for the company.

Analysts Kyna Wong and others pointed out in their report that they expect the gross margin of Xiaomi's electric vehicle business to be at least 18% between 2024 and 2026. They also predict that the profit margin of the company's smartphones will bottom out in the third quarter and have raised their adjusted net profit forecasts for 2024-2026 by 13%, 30%, and 17%, respectively. The company's recent catalysts include the release of the Xiaomi 15 and details of the next generation of electric cars.

jd.com

After the Hong Kong stock market closed on August 15th, $JD-SW (09618.HK)$ the company announced its performance, with Q2 net revenue of 291.4 billion, an increase of 1.2% year-on-year; the net profit attributable to common stockholders was 12.6 billion yuan, a sharp increase of 90.9% year-on-year.

JD's net profit in the second quarter grew rapidly, with both adjusted operating profit and net profit reaching a historical high. Logistics business led the growth of the group's profit, with JD Logistics' operating profit in the second quarter more than tripled year-on-year. However, the new business lagged behind, with quarterly revenue down 35% year-on-year and a loss of nearly 0.7 billion yuan.

JD Group's CFO, Ms. Shan Su, said, "During the peak sales season, we continue to enhance our price competitiveness through our supply chain capabilities and disciplined investments, rather than relying on subsidies. As a result, JD's gross margin in the second quarter increased significantly by 137 basis points to 15.8%.

JD's stock performance fully reflects its strong performance, with the company's performance rising nearly 9% in Hong Kong stocks the day after. The momentum is strong.

Citi said that JD's second quarter profits exceeded expectations and that if the implementation speed of the old-for-new policy is faster than expected, it will become a catalyst for the company's stock price.

Citi analyst Alicia Yap and others stated in a report that they expect the improvement in JD's electronic and home appliance products to continue into the second half of the year, and maintain a buy rating on the company. Based on reasonable valuation and stable profit margin trends, the company's ADR target price is $41.

Jefferies also stated that JD's second quarter earnings under non-GAAP exceeded expectations, while management emphasized the company's robust growth momentum in customer base and purchase frequency, maintaining a buy rating on the company.

Jefferies analysts Thomas Chong and others pointed out in a report that JD's total revenue in the second quarter increased by 1.2% year-on-year, meeting expectations; they raised JD's ADR target price from $41 to $43.

Alibaba

After the Hong Kong stock market closed on August 15th, $BABA-W (09988.HK)$ Releasing the latest quarterly results, the company's revenue in the previous quarter was 243.24 billion yuan, a year-on-year increase of 4%, and adjusted net profit of 40.691 billion yuan, a year-on-year decrease of 9%.

Although the revenue was slightly lower than expected and the profit slightly declined, Alibaba's core business achieved steady growth thanks to increased business scale and improved operational efficiency. Taotian Group's GMV and order volume both increased, and the cloud business returned to the growth track.

During the conference call, Alibaba stated that in addition to Taobao, Tmall, cloud, and AIDC, the core businesses, other businesses will significantly improve efficiency and vigorously promote commercialization to reduce losses. It is expected to achieve a balance of profits and losses within one or two years, and after achieving a balance of profits and losses, it can gradually contribute profitable scale to the group.

In addition, the company's status as the main listing venue in Hong Kong cannot be ignored. The company officially completed its dual listing on the 28th. The market's expectation of the inclusion of Hong Kong Stock Connect also led to a nearly 5% increase in Alibaba's stock price on the trading day after the earnings release.

Daiwa Securities stated that Alibaba's total revenue for the quarter ending in June, excluding the Softbank stake, was about 3% lower than market expectations, but non-GAAP net profit was 7% better than expected. They believe that apart from continued share buybacks and dividend payments, the re-acceleration of Client Management Revenue (CMR) growth and the inclusion of Southbound trading will result in Alibaba being revalued.

The bank pointed out that Taotian Group, Alibaba's subsidiary, saw a year-on-year decline of 1%, but GMV achieved high single-digit growth and order growth reached double digits. Although the gap between CMR and GMV growth is currently widening, it is expected that the gap will gradually narrow as the realization level increases. Given the improvement in fundamentals in the second half of the 2025 fiscal year, the bank reiterates a 'buy' rating with an unchanged target price of HK$98.

Tencent Holdings

$TENCENT (00700.HK)$ The company announced its performance after the Hong Kong stock market on August 14th. In the second quarter, revenue increased by 8% year-on-year to 161.12 billion yuan, slightly below market expectations. Adjusted net profit increased by 53% year-on-year to 57.31 billion yuan, significantly exceeding expectations of 48.67 billion yuan.

Tencent's domestic market game revenue has recovered growth, and international market game revenue has accelerated growth. Through self-produced TV dramas adapted from online literature IPs, Tencent Video has achieved significant growth in viewership and paid memberships. In terms of share buyback, Tencent repurchased approximately 0.155 billion shares for about 52.3 billion Hong Kong dollars in the first half of the year, continuing to enhance shareholder value.

Although Tencent has delivered a good overall performance, rumors of the '30% Apple tax on the WeChat ecosystem' still loom over the capital market like a shadow. On the day of the earnings release, the long and short forces were clearly in a tug-of-war, resulting in a slight decline of over 1%.

Bank of America Securities raised Tencent's earnings forecast for the years 2024 to 2026 to 19.19 yuan, 21.66 yuan, and 24.17 yuan per share, respectively. They maintained a target price of 480 Hong Kong dollars and reiterated a 'buy' rating.

Bank of America is confident in the company's growth prospects in the gaming industry, its ability to respond to macroeconomic conditions, and its expansion of gross margin. They state that the management believes that the shift to higher margin revenue sources can sustain for several years.

Baidu Group

$BIDU-SW (09888.HK)$ The company released its financial results after trading on the Hong Kong Stock Exchange on August 22. The Q2 revenue was 33.93 billion yuan, nearly flat year-on-year, slightly below market expectations. The adjusted net profit was 7.4 billion yuan, a decrease of 8% year-on-year.

Although RoboSense's autonomous driving orders increased by 26% year-on-year in the second quarter, indicating a promising future for self-driving cars, Baidu's main source of revenue is its online marketing business, which saw a 2% decrease in revenue to 19.2 billion yuan.

Baidu's performance on the post-earnings trading day was relatively weak, with the stock price falling by nearly 5%.

Goldman Sachs has lowered the target price for Baidu's H shares from the original 141 Hong Kong dollars to 127 Hong Kong dollars while maintaining a "buy" rating.

The bank has revised down its revenue forecast for Baidu for the years 2021 to 2026 by 2%, reflecting a downward revision in advertising revenue forecast and an upward revision in net profit forecast by up to 1%, reflecting continued operating expenses. The bank has also lowered the target PE ratio for the company's core advertising business to 7 times, reflecting a delay in the recovery of online advertising business and lower monetization from AI search and weak macro conditions.

(Translated by Siasun Robot&Automation) 快手

$KUAISHOU-W (01024.HK)$ The company announced its performance after the Hong Kong stock market closed on August 20th. The Q2 revenue increased by 11.6% year-on-year to 30.98 billion yuan, surpassing the estimated 30.37 billion yuan; gross profit was 17.135 billion yuan, a year-on-year increase of 23%; adjusted net profit was 4.679 billion yuan, a year-on-year increase of 73.7%.

The gross margin and adjusted net profit margin of Kuaishou in Q2 reached a new high for a single quarter, 55.3% and 15.1% respectively. However, the weak prospect of e-commerce operations has become a constraint for the company. According to a report by BOC International, Kuaishou's total revenue in the second quarter increased by 12% year-on-year, exceeding market expectations by 2%. However, the 15% year-on-year growth rate of e-commerce GMV was lower than the market expectation of 7%. The rating was downgraded from 'buy' to 'hold', and the target price was lowered from 60 HKD to 50 HKD.

BOC International believes that the intense internal competition in the domestic e-commerce industry brought about by traditional shelf e-commerce platforms and social platforms with e-commerce infrastructure, as well as weak domestic consumer sentiment, will restrain the commercialization of the company's e-commerce business in the second half of the year. At the same time, the commercialization revenue of AI and new businesses is not sufficient to contribute enough incremental group side income in the short and medium term, mainly due to the company's cautious progressive investment limitations.

Kuaishou fell nearly 10% on the trading day after its earnings, and market sentiment is very pessimistic.

Netease

$NTES-S (09999.HK)$ NetEase announced its Q2 results after the Hong Kong stock market closed on August 22nd. Thanks to the increased revenue from the mobile games "Identity V" and "Naraka: Bladepoint", NetEase's Q2 revenue was 25.5 billion yuan, a year-on-year increase of 6.1%; adjusted net profit attributable to the company's shareholders was 7.8 billion yuan, a year-on-year decrease of 13.3%.

For the decline in NetEase's net profit, the relatively weak performance of new games may be a direct cause. In the first half of 2023, NetEase successively launched two new mobile games, "Naraka: Bladepoint" and "Speedy Ninja". However, in the first half of 2024, NetEase only launched the multiplayer tactical shooting game "Operation: Firefly Assault" at the end of the second quarter (June). Although "Operation: Firefly Assault" quickly reached the top of the iOS download chart, its year-on-year contribution was limited. The other two new games, "Endless Eternal" and "Seven Days World", were launched in July, which was outside the reporting period.

Senior game industry analyst Zhang Shule said that the decreasing popularity of NetEase's popular game "Egg Party" indicates that the game has reached a bottleneck, where the slow iteration of party gameplay cannot meet the innovative demands of millions of players. Whether this impasse can be broken depends on whether "Egg Party" can provide new and fun creative tools to explore more game types and integrate them into party games.

HSBC's latest research report stated that lower-than-expected second-quarter results have weakened market confidence in NetEase's mid-term revenue prospects. In the second half of this year, the gaming market is highly competitive, posing a significant challenge to NetEase's products such as "Revelation", "Fantasy Westward Journey" PC version, and "Egg Party".

Following the earnings report, NetEase plunged more than 10% on the trading day, indicating investors' concerns about the performance.

Tencent Music

$TME-SW (01698.HK)$ On August 13th, after-hours in Hong Kong stock market, the company released its financial results. Q2 revenue was 7.16 billion yuan, a 1.7% year-on-year decrease; adjusted net income was 1.87 billion yuan, a 22.5% year-on-year increase.

Although the overall performance was satisfactory, Tencent Music's performance plummeted by over 18% on the trading day after the results, surprising the market. Tencent Music staff mentioned that the Q2 2024 earnings were in line with market expectations, suggesting that the market's reaction might be due to differing opinions on some of the company's operational rhythms.

Goldman Sachs believes that Tencent Music's stock price adjusted after the earnings announcement mainly because the guidance target of adding 2 million music users per quarter from the second half of the year has slowed down.

Daiwa published a research report stating that the company's performance generally meets expectations, but the guidance for growth in music subscription revenue for the second half of this year and next year is lower than expected. They changed their rating from 'buy' to 'hold' and reduced the target price from HK$66 to HK$46.

Dear friends

Are you satisfied with the performance disclosed by the star network technology stocks?

Which stocks did you get on board? Welcome to discuss.

Editor/Lambor