According to the research report of Huaxing Securities (US/HK) team, the Chinese economy has steadily recovered since this year, and overseas investors' interest in the Chinese market has quickly risen, driving the rebound of HK stocks and ADR. Recently, Huaxing Capital invited investors to conduct research on industries and related companies such as mainland Internet, entertainment, enterprise services, logistics, etc.
The report pointed out that the healthy growth of the digital entertainment industry drove the continued improvement of the profit margin. Each platform achieved a win-win situation by providing users with live e-commerce and personalized advertising services to meet user needs. Among them, Kuaishou Technology (01024.HK) increased user stickiness by enriching product supply, precise algorithm matching, and expanding shopping scenes, achieving a year-on-year increase of 28% in e-commerce GMV in the first quarter, and the adjusted net profit margin increased by 14.7 percentage points year-on-year. In addition, Bilibili (09626.HK) also participated in this survey. The company's management is optimistic about the advertising business, especially the investment in e-commerce and entertainment industries. Bilibili's first-quarter advertising revenue increased by 31% year-on-year.
The report mentioned that the recovery of the Chinese economy is particularly evident in the logistics industry. With the emergence of new retail models such as live e-commerce and changes in consumer habits, China's express logistics has shown a trend towards lightweight, driving a year-on-year increase of 21.7% in express logistics volume in the first four months of this year. JD Logistics (02618.HK) achieved profitability for the first time in the first quarter. Its management expects that JD Logistics' business will continue to steadily develop this year, especially in terms of profit margin. After two years of customer sorting and the company's cost reduction and efficiency improvement, the management is confident in further increasing the gross profit margin and net profit margin this year.
The bank pointed out that the interviewed Internet platform companies all believe that the macro environment has stabilized and entered a relatively stable growth period. Currently, companies are shifting their business focus to improving the quality of products and services for the user end, improving services for the merchant end, and achieving a higher profit margin. Overall, the competitive environment in the industry has improved and stabilized, and inefficient subsidies have been greatly reduced, and many companies have achieved good performance in profit margin growth year-on-year in the first quarter. At the same time, many companies pay more attention to returning value to shareholders and actively launch repurchase or dividend plans.