In today’s briefing:
- Tencent (700 HK): 2Q24, Gross Margins of All Business Lines Improved Significantly
- Tencent 2Q: Recent Launch of DnF Mobile Helps Domestic Gaming Return to Growth
- Midea A/H Listing – Getting Closer to the US$3bn+ Raising, Has a Narrow Window
- Fu Shou Yuan (1448.HK) – Negative Growth in 24H1 Seems Inevitable
- TAL Education Group: A Tale Of Expansion and Diversification in Learning Devices! – Major Drivers
Tencent (700 HK): 2Q24, Gross Margins of All Business Lines Improved Significantly
- Total revenue increased by 8% YoY in 2Q24, lightly higher than 1Q24 and 4Q23.
- The gross margins of all business lines Improved significantly YoY.
- We set the upside at 35% and the price target at HK$506 for the end of 2025. Buy.
Tencent 2Q: Recent Launch of DnF Mobile Helps Domestic Gaming Return to Growth
- Tencent (700 HK) reported 2Q2024 results today which beat consensus. Domestic gaming resumed growth driven by the successful launch of DnF Mobile which continues to dominate charts in China.
- All three business segments saw improvement in margins driven by Tencent’s high-margin businesses incl. mini-programs, video accounts, short-videos, etc.
- We expect continued recovery in Tencent’s earnings, however, remain cautious given slowdown in consumption spending and macroeconomic uncertainties.
Midea A/H Listing – Getting Closer to the US$3bn+ Raising, Has a Narrow Window
- Midea Group Co Ltd A (000333 CH) one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.
- Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
- We have covered the company and deal background in our previous notes. In this note, we talk about the updates since then.
Fu Shou Yuan (1448.HK) – Negative Growth in 24H1 Seems Inevitable
- According to the management, the performance of 24H1 should be better than that of 21H1, but Fu Shou Yuan’s performance in 2024 full year may still fall short of expectations.
- In the future, the development strategy of Fu Shou Yuan would rely more on endogenous growth. Without aggressive M&A, long-term revenue growth rate could fall to single digit.
- Special dividends will continue in the future. However, one major risk for Fu Shou Yuan is policy risk. The bottom line is the demand for the funeral industry always exists.
TAL Education Group: A Tale Of Expansion and Diversification in Learning Devices! – Major Drivers
- TAL Education Group delivered a robust set of results in its fiscal first quarter of 2025, showcasing significant revenue growth and strategic expansions in both its learning services and content solutions sectors.
- These outcomes reflect the company’s focused execution on its operational strategies and its adaptability to the evolving educational needs.
- Financially, TAL Education Group reported a net revenue of USD 414.2 million, a substantial increase of 50.4% from the previous year, paralleled by a 56.9% increase in RMB terms.
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