CMB International published a report, forecasting that next year China's Internet Industry will face headwinds, and the issuance of substantial policies to promote Consumer spending may remain a key driving force for the structural enhancement of sector valuations. However, before that, the sector may maintain fluctuations, with Shareholder return levels, profit growth rates, and certainty being key supports for valuations.

CMB International suggests focusing on three main lines. The first is the moat of mature Businesses and the new development space, which is expected to drive both performance and valuations upward: such as the Gaming sector benefiting from new game releases, local life where core Businesses still have further online penetration space, improvement in advertising effectiveness powered by AI technology, and new advertising and cloud services brought by GPU cloud Business, alongside e-commerce, which has seen an improvement in monetization rates and is expected to benefit from incremental Consumer promotion policies; it is recommended to monitor Tencent (00700.HK), NTES-S (09999.HK), Alibaba-W (09988.HK), and MEITUAN-W (03690.HK).

The second line is the sectors where rapid profit growth has been largely anticipated, but valuations may further adjust to bring investment opportunities: such as OTA, Short Video, and Education, with a recommendation to focus on Ctrip-S (09961.HK), KUAISHOU-W (01024.HK), and NEW ORIENTAL-S (09901.HK). The third is the sectors expected to bring profit and valuation increments in the medium to long term, such as e-commerce and OTA.