With the release of Kuaishou's earnings after the Hong Kong stock market closed on March 25, the performance of the star Network Technology stocks in Hong Kong for Q4 has all been finalized. Looking at the top ten Network Technology stocks by market cap, the share price movements on the trading days following the announcements have been mixed, with four companies recording gains and six companies recording losses.

Among the top ten Network Technology stocks, seven saw small fluctuations in stock prices after earnings, all within 5%; three had larger fluctuations, all exceeding 10%, with Alibaba and Tencent Music both soaring over 14%, while Trip.com Group dropped nearly 12%.

Futu News has sorted and reviewed the Q4 performance of the star Network Technology stocks in Hong Kong based on the ranking of their stock price increases on the trading days after earnings, for the reference of all mooers:

Alibaba

$BABA-W (09988.HK)$ On February 20, the company's performance was announced in Pre-Market Trading, with revenue for the third fiscal quarter (fourth quarter) of 280.154 billion yuan; a year-on-year increase of 8%; adjusted net income of 51.066 billion yuan, a year-on-year increase of 6%. Alibaba's revenue growth rate for the third fiscal quarter reached its fastest pace in over a year, with accelerated revenue growth from Taobao and Tmall, a strong year-on-year increase in new buyers and order volume, and the 88VIP core user group continuing to grow at a double-digit percentage year-on-year, reaching about 49 million. Alibaba Cloud's revenue returned to a double-digit growth of 13%, and revenue from AI-related products has maintained triple-digit growth for six consecutive quarters.

Alibaba significantly increased its capital expenditure in the third fiscal quarter. Earnings Reports show that the company's capital expenditure reached 31.8 billion yuan, an 80% increase quarter-on-quarter. This was mainly used for the expansion of cloud computing infrastructure, technology research and development, and exploration of Emerging Markets.

The strong performance contributed to Alibaba's stock price soaring over 14% after earnings.

Goldman Sachs has significantly raised Alibaba's 12-month target price to $160 / 156 HKD, an increase of over 36% from the previous $117 / 114 HKD.

Goldman Sachs believes that Alibaba's better-than-expected cloud revenue growth and capital expenditures have a positive impact on the demand and supply dynamics of China's datacenter industry, potentially leading to a reevaluation of industry valuations.

Morgan Stanley has also significantly raised Alibaba’s rating to "Overweight," adjusting the Target Price from $100 to $200, with an optimistic valuation reaching $300.

Morgan Stanley expects Alibaba Cloud revenue to double within three years, increasing from 118 billion yuan in fiscal year 2025 to 240 billion yuan in fiscal year 2028. In the base scenario, the Target Price for Alibaba is raised to 200 dollars, with the cloud Business valued at 60 dollars per share. Combining the number of stocks issued by Alibaba, the Market Cap of Alibaba Cloud could reach 140 billion dollars.

Tencent Music

$TME-SW (01698.HK)$ On March 18, after the Hong Kong stock market closed, the company released its earnings report, with Q4 revenue of 7.46 billion yuan, an increase of 8.2% year-on-year, and adjusted net income attributable to shareholders of 2.28 billion yuan, a year-on-year increase of 44.8%. As the company's driving core, Tencent Music's Q4 online music business continued to grow: the annual online music subscription revenue increased by 25.9% year-on-year to 15.23 billion yuan, and the number of paid online music users in Q4 increased by 13.4% year-on-year to 0.121 billion.

In addition, the company announced a distribution of approximately $0.273 billion (approximately 1.993 billion yuan) in annual cash dividends and introduced a new share buyback plan, with a maximum amount of up to $1 billion (approximately 7.3 billion yuan).

The excellent performance combined with the buyback plan undoubtedly provides a strong boost to the market, and Tencent Music's stock price soared over 14% after the earnings release. In the previous Hang Seng Index periodic review, Tencent Music was included in the Index component stocks, and ongoing Bullish factors have helped Tencent Music's stock price rise nearly 30% this year.

UBS Group maintains a "Buy" rating on Tencent Music, raising the Target Price in the US market from $14 to $18.

UBS Group stated that Tencent Music's performance in the last quarter was better than expected, with both revenue and profit margins exceeding expectations. The average revenue per paid user in the subscription business steadily increased, alleviating some investor concerns. The gross margin rose to 43.6% quarter-on-quarter, becoming a highlight. It is believed that this is attributed to the strong growth in high-margin business revenue, an increase in the proportion of self-owned content, and the optimization of revenue sharing in social entertainment business. The outlook on the company's gross margin expansion is optimistic, with expectations that gross margins will reach 44% and 45% in Q1 and for the entire year of 2025, respectively.

NetEase

$NTES-S (09999.HK)$ On February 20, after the Hong Kong stock market closed, the company announced its performance, with Q4 revenue of 26.7 billion yuan, a year-on-year decline of 1.4%; adjusted net income attributable to shareholders was 9.7 billion yuan, a year-on-year increase of 31.2%. NetEase's Q4 revenue fell short of expectations, but profits not only reversed the trend of double-digit decline seen in the previous two quarters, but the growth rate also far exceeded expectations.

The company's Q4 revenue from PC games increased by 56.6%, far exceeding expectations, while mobile game revenue declined by 10.5%, nearly double the expected decrease according to analysts. When announcing the earnings report, NetEase also mentioned progress in the deployment of DeepSeek and AI implementation. NetEase stated that multiple businesses, including Youdao, NetEase Cloud Music, and NetEase Smart, as well as the mobile game "逆水寒" (Nirvana in Fire) announced the integration of DeepSeek. NIO is applying DeepSeek and self-developed AI technology in a variety of products across education, music, enterprise services, and gaming.

The mixed performance also led to fierce market battles in the following day's Hong Kong stock trading for NetEase, which ultimately rose slightly by 1.22%, although most major institutions still expressed optimistic expectations for NetEase.

China International Capital Corporation maintains a "outperform industry" rating for NetEase with a target price of 180 HKD / 116 USD, corresponding to a 16/15 times Non-GAAP PE for 25/26 years, with upside potential of 14%/11% for the HK/US stocks, and maintains the Non-GAAP net income forecast for 25/26 years.

CICC stated that the company's Q4 2024 revenue met expectations, and profits were better than expected. Specifically, the performance of PC games exceeded expectations, company marketing efficiency contributed to cost savings, and continued investment in research and development was made. Non-gaming business gradually approached profitability, with attention on the performance of shooting genre PC games in 1H25.

Xiaomi Group

$XIAOMI-W (01810.HK)$ On March 18, after the Hong Kong stock market closed, the company released its performance report, showing Q4 revenue of 109.005 billion yuan, a year-on-year increase of 48.8%; adjusted net income of 8.316 billion yuan, a year-on-year increase of 69.4%. Xiaomi Group's Q4 revenue has exceeded 100 billion yuan in a single quarter for the first time, and Lei Jun stated that this is the strongest annual report in Xiaomi's history.

"Mobile phone × AIoT" business continues to be the backbone of Xiaomi's revenue, with 2024 revenue projected at 333.2 billion yuan, a year-on-year growth of 22.9%. Smart Phone shipments reached 0.1685 billion units, a year-on-year growth of 15.7%, with a market share of 13.8%, ranking third globally.

Innovative businesses such as smart electric vehicles are the biggest highlights of this Earnings Reports: annual revenue in 2024 is expected to reach 32.8 billion yuan, of which the automotive business revenue is 32.1 billion yuan. Xiaomi Group stated that in 2024, the delivery volume of the SU7 series is expected to reach 136,854 units, and in 2025 the company will expand production capacity to ensure deliveries, striving to achieve the goal of delivering 350,000 units.

Although Xiaomi's performance is very strong, it is clear that the previous market performance has already priced in very high expectations, so the stock price did not see a significant increase after the report, only a slight rise of 0.95%. JPMorgan represents this viewpoint.

Goldman Sachs stated that although Xiaomi's fundamentals are strong, the significant rise in stock price has already fully reflected the market's optimistic expectations for the accelerated growth of the electric vehicle business, increased shares in Smart Phones and IoT, as well as new businesses such as smart glasses, robots, and AI.

However, at the same time, most major institutions hold an optimistic attitude toward Xiaomi's future, with Morgan Stanley giving Xiaomi a "Shareholding" rating and a Target Price of 45 Hong Kong dollars.

Goldman Sachs pointed out that Xiaomi Group's Q4 profit for 2024 significantly exceeded expectations, with revenue growth and improved margins driving gross margin 12% higher than its forecast, and cost synergy effects exceeded expectations by about 87% for operating profit. Looking ahead, Goldman believes there will be more positive catalysts in the coming months, and it believes Xiaomi's positive trend toward 2025 is sustainable, also noting that based on the success of the Xiaomi SU7 Ultra, the Group has begun its journey into the high-end market, with future products expected to increase average selling prices, thus helping to boost the penetration rate of its high-end Smart Phones and growth momentum of AI and Internet of Things products.

MEITUAN-W

$MEITUAN-W (03690.HK)$ On March 21, after the Hong Kong stock market closed, the company announced its earnings, with Q4 revenue reaching 88.487 billion yuan, an increase of 20.1% year-on-year; adjusted net income was 9.849 billion yuan, a year-on-year increase of 125.1%. The company's losses in new business for Q4 significantly narrowed, and it indicated that it would accelerate exploration in overseas markets, expanding Keeta to all major cities in Saudi Arabia.

During the earnings call, Meituan's executives explained the direction of a comprehensive foray into AI. This year, the company has invested "tens of billions" in GPU resources for the AI field and plans to further expand its investment. Meanwhile, Meituan is also exploring the application of AI in robotics and autonomous driving, combining unmanned delivery with AI technology.

On the first trading day after the earnings announcement, Meituan's stock fell slightly by 1.13%, indicating that the market funds are still holding a wait-and-see attitude towards the company.

However, most major banks still give optimistic expectations, with Goldman Sachs releasing a research report that rates Meituan as a Buy with a target price of 200 Hong Kong dollars.

Goldman Sachs stated that, considering Meituan-W's continued leading position in the food delivery sector, the stable pattern in the still rapidly growing local services sector, the improvement in new business operational efficiency, and a robust balance sheet, it gives Meituan a Buy rating. Based on a 12-month sum-of-the-parts valuation method (SOTP), the target price is set at 200 Hong Kong dollars.

Kuaishou

$KUAISHOU-W (01024.HK)$ On March 25, after the Hong Kong stock market closed, the company released its performance. Q4 revenue was 35.384 billion yuan, an increase of 8.7% year-on-year; adjusted net income was 4.701 billion yuan, an increase of 7.8% year-on-year. In Q4, KUAISHOU-W had an average daily active users of 0.401 billion, an increase of 4.8% year-on-year; monthly active users reached 0.736 billion, an increase of 5.0% year-on-year. Additionally, significant breakthroughs were made in the AI field, with the video generation large model launching version 1.6.

In addition, Kuaishou’s Q4 e-commerce GMV increased by 14.4% year-on-year to 462.1 billion yuan, and the monthly active buyers in e-commerce increased by 10.0% year-on-year to 0.143 billion; overseas business revenue grew by 52.9% year-on-year, and the operating loss of overseas business narrowed by 57.2% year-on-year, showing a significant improvement in profitability.

Although Kuaishou's performance basically met expectations, it still recorded a decline of 1.67% after the earnings announcement.

Macquarie is slightly pessimistic, lowering the target price from 72.7 Hong Kong dollars to 64.7 Hong Kong dollars, maintaining an "Outperform" rating.

Macquarie stated that Kuaishou's Q4 e-commerce commission rate was slightly weak, which they believe is due to increased traffic support for quality merchants; due to Kuaishou's increased investment in AI and continued ecosystem support, Macquarie has lowered net profit forecasts for this year and next by 10% and 12%.

Baidu Group

$BIDU-SW (09888.HK)$ On February 18, before the Pre-Market Trading, the company announced its performance, with Q4 revenue of 34.124 billion yuan, a 2% year-on-year decline; adjusted Net income was 6.709 billion yuan, a 13% year-on-year decline. Baidu's Q4 AI transformation is showing initial results, with intelligent cloud revenue growing strongly by 26% year-on-year. The company expects AI investments to yield more significant returns by 2025, however, the expansion of core Business has stagnated.

China's AI is emerging like mushrooms after rain, and the market inevitably worries about Baidu's lifeline, "search." Baidu's stock performance after the earnings announcement was also quite struggling, with a single-day drop of 2.05%.

Morgan Stanley strategy analyst Gary Yu stated in a report that as the costs of AI model training and inference decrease, Chinese technology companies will all benefit, but there are concerns about the disruption and monetization risks facing Baidu's search business.

Morgan Stanley believes that although Baidu has a first-mover advantage in AI strategy, its core search business may be disrupted by generative AI and faces monetization risks, especially as competition from TENCENT and ByteDance becomes increasingly fierce.

TENCENT

$TENCENT (00700.HK)$ On March 19, the company announced its performance after the Hong Kong stock market closed. In Q4, revenue was 172.446 billion yuan, a year-on-year increase of 11%; adjusted net income was 55.312 billion yuan, a year-on-year increase of 30%. Tencent's value-added services, marketing services, fintech, and enterprise services all experienced collective growth, exceeding expectations across the board.

Tencent's capital expenditure in the fourth quarter reached 36.578 billion Yuan, a quarter-on-quarter increase of 114% and a year-on-year increase of 386%, achieving year-on-year triple-digit growth for four consecutive quarters. The total capital expenditure for the year 2024 is expected to exceed 76.7 billion Yuan, a 221% increase year-on-year, setting a new historical record. In 2025, the company proposed increasing the annual dividend by 32% to HKD 4.50 per share (approximately 41 billion Hong Kong Dollars) and plans to repurchase shares worth at least 80 billion Hong Kong Dollars.

Outstanding performance seems to indicate that Tencent will have excellent stock price performance; however, contrary to expectations, the company's stock fell 3.8% after earnings, with a net sell-off of 3.33 billion Hong Kong Dollars from northern capital. Some conservatives worry that high R&D expenses will delay the pace of profit release, and some institutions believe that Tencent's AI-related capital expenditure in the fourth quarter has already reached 39 billion Yuan, making the annual guideline of 100 billion capital expenditure seem relatively moderate.

Although the stock price performance appears slightly weak, Morgan Stanley remains bullish, reaffirming its "Shareholding" rating and preferred stance, with the target price raised by 15% from HKD 550 to HKD 630.

Morgan Stanley stated that Tencent gains high investment returns from sustainable advertising growth, 2B demand, and 2C application monetization from AI investments while remaining committed to capital returns and improving profit margins; Tencent has addressed all previous market concerns regarding capital expenditure, cloud applications, and core business integration. Despite the continuous increase in Tencent's capital expenditure, Morgan Stanley believes management remains confident in expanding its profit margins through favorable business mix transformations. The bank estimates that Tencent's operating profit will increase by 16% in 2025, with the operating margin reaching 38%, an increase of 2 percentage points year-on-year.

jd.com

$JD-SW (09618.HK)$ On March 6, after the Hong Kong stock market closed, the company announced its earnings. Q4 revenue was 347 billion yuan, a year-on-year increase of 13.4%, the fastest growth rate in nearly two years; adjusted net income was 11.3 billion yuan, a year-on-year increase of 34.5%. At the same time, JD.com announced that it may repurchase up to $5 billion worth of stocks in the next 36 months.

UBS adjusted JD.com as the preferred stock for China's Internet after the earnings release, raising the target price from HKD 250 to HKD 261, reiterating a 'Buy' rating, and increasing the earnings forecast per share for the next two years by 4% to 5%.

UBS pointed out that JD.com’s last quarter performance exceeded expectations, with a year-on-year revenue growth of 13%, adjusted operating profit, and net income both increasing by 34%, which are 9%, 10%, and 19% higher than market expectations respectively, believing that the group's development prospects are optimistic, with strong growth momentum in electronics and home appliance sales expected to continue until 2025.

UBS currently forecasts that JD.com’s revenue will grow by 9% year-on-year in 2025, with first-quarter revenue expected to grow by 11%, driven by an increase in the contribution from third-party businesses with higher profit margins, and the adjusted net profit margin for the whole year is expected to reach 4.1%, projecting an approximate 9% growth in profits.

However, JD.com’s stock price performance surprised investors, with a 4.97% decline recorded in Hong Kong stocks the next day, possibly due to market concerns over the sustainability of its performance growth and the future development trend of the e-commerce industry, leading to investor sell-offs.

Trip.com Group

$TRIP.COM-S (09961.HK)$ On February 25, before the Hong Kong stock market opened, the company released its earnings. Q4 revenue was 12.7 billion yuan, a year-on-year increase of 23%; adjusted net income was 3 billion yuan, a year-on-year increase of 13.6%. Although Trip.com’s performance growth is noteworthy, the stock price still plummeted by 11.97% after the earnings announcement. The reason behind this is that Trip.com experienced significant declines in both revenue and adjusted net income quarter-on-quarter, with revenue decreasing by 20% and adjusted net income decreasing by 50%, which also led to differences in opinions among major institutions.

Citigroup is relatively optimistic about Trip.com’s future, setting the target price in the US stock market at USD 78 and rating it 'Buy'.

Citigroup pointed out that Trip.com Group’s revenue rose by 23% year-on-year in the last quarter, 3.6% higher than Citigroup's expectations. Among them, Lodging booking revenue grew by 33% year-on-year, 2% higher than the firm's expectations; transportation ticket revenue increased by 16% year-on-year, which also exceeded the firm’s expectations by 3%. Additionally, the company’s gross margin for the last quarter was 79.3%, while Citigroup predicted 80.5%; the non-GAAP operating margin was 21.6%, which roughly matched the firm’s expected 21.5%.

Nomura Securities stated that Ctrip's performance guidance failed to meet investor expectations, which affected market confidence.

Nomura believes that Ctrip Group's management expects a non-GAAP operating gross margin of about 28% for 2025, lower than the market expectation of 28.5%. This guidance not meeting expectations is the main reason for the decline in stock prices.

Dear mooers,

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

Which stocks have you invested in? Feel free to discuss.

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Editor/lambor