Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.</li>
<li>In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.


Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus. </li>
<li>The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.</li>
<li>We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.</li>
</ul>


Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus. 
The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.


[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.</li>
<li>The gross margins of all business lines improve in 3Q24, especially “others”.</li>
<li>We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.</li>
</ul>


In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
The gross margins of all business lines improve in 3Q24, especially “others”.
We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.


Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>SOUTHBOUND gross trading activity bounced sharply. Net buying increased sharply too. 9 names traded more than US$1bn. The top 3 names saw US$8.6bn of buying. </li>
<li>The trend continues to net sales of ETFs and high div SOEs. net buying is very, very broad-based. </li>
<li>I expect HK-listed tech to continue getting bought. It is something of a safe haven against Trump tariffs as they don't compete in the US much.</li>
</ul>


SOUTHBOUND gross trading activity bounced sharply. Net buying increased sharply too. 9 names traded more than US$1bn. The top 3 names saw US$8.6bn of buying. 
The trend continues to net sales of ETFs and high div SOEs. net buying is very, very broad-based. 
I expect HK-listed tech to continue getting bought. It is something of a safe haven against Trump tariffs as they don't compete in the US much.


HK Connect SOUTHBOUND Flows (To 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

<ul>
<li>We expect operating profit will reach a record high to RMB54 billion in 3Q24.</li>
<li>We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market share to Tencent.</li>
<li>We set the upside at 27% and the price target at HK$542 for the end of 2025. Buy.</li>
</ul>


We expect operating profit will reach a record high to RMB54 billion in 3Q24.
We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market share to Tencent.
We set the upside at 27% and the price target at HK$542 for the end of 2025. Buy.


Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

Easou Technology Holdings (2550 HK) has dropped 80%+ in the last few trading days and is on the verge of missing out on HSIII addition in March 2025.

Janaghan Jeyakumar, CFA

[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts

Tencent's Q3 results meet expectations, with strong growth in fintech and consumption driving recovery. TP raised to HK$518, still a top pick in...

Blue Lotus Research Institute

Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins

In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY. The gross margins of all business lines improve in 3Q24. We set the...

Ming Lu

HK Connect SOUTHBOUND Flows (To 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

SOUTHBOUND was a Very Big Buyer of HK shares last week. Given the movement in ADRs after the close because of no fiscal stim, one should expect...

Travis Lundy

Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

We expect operating profit will reach a record high in 3Q24. We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

Easou Technology Holdings (2550 HK) has dropped 80%+ in the last few trading days and is on the verge of missing out on HSIII addition in March 2025.

Janaghan Jeyakumar, CFA

[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts

​Tencent's Q3 results meet expectations, with strong growth in fintech and consumption driving recovery. TP raised to HK$518, still a top pick in...

Blue Lotus Research Institute

Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins

In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY. The gross margins of all business lines improve in 3Q24. We set the...

Ming Lu

HK Connect SOUTHBOUND Flows (To 8 Nov 2024); High-Div SOEs Sold, Tech Bought... Again

SOUTHBOUND was a Very Big Buyer of HK shares last week. Given the movement in ADRs after the close because of no fiscal stim, one should expect...

Travis Lundy

Tencent (700 HK) 3Q24 Earning Preview: Expecting Record High Operating Profit, 27% Upside

We expect operating profit will reach a record high in 3Q24. We believe both Alibaba’s usage of WeChat Pay and boycotted JD.com will provide market...

Ming Lu

Tencent's Q3 results meet expectations, with strong growth in fintech and consumption driving recovery. TP raised to HK$518, still a top pick in...