Recently, the Hong Kong stock market has risen strongly and has recovered all of its decline since September last year. As of yesterday's close, the Hang Seng Index and the Hengke Index had reached the key positions of 19,000 and 4,000 points respectively. The signal was significant.

In this round of “big counterattack” of Hong Kong stocks, TechNet stocks performed very well. According to the data, the Hong Kong Stock Internet ETF, which is a major Internet leader in Hong Kong stocks, surged 2.5% to hit a new high during the new year. Since late April, the ETF has been booming, and has reached a new high of 7 times during the new year.

At this time, Hong Kong stocks and China Securities will usher in a peak period of a round of performance disclosure. After today's Hong Kong stock market, Alibaba and Tencent announced their latest results, and JD and Baidu will also “relay” tomorrow.

The weight accounts for more than a quarter of the MSCI China Index. Can the latest performance of these four internet giants add another “spark” to the breakneck rise of Hong Kong stocks?

On May 9, Goldman Sachs released$TENCENT (00700.HK)$und$Alibaba (BABA.US)$/$BABA-SW (09988.HK)$According to the forward-looking performance report, Tencent's Q1 operating profit for FY24 is expected to increase 15% year over year, and game revenue will drop 3% year on year; Alibaba's Q4 EBITA for FY24 will drop 8% year on year (note: Alibaba's fiscal year is April 1 to March 31 of the following year), and GMV will increase 6% year over year.

Tencent: Net profit increased by more than 20% year on year, and game revenue stabilized

The report predicts that Tencent's Q1 game revenue will drop 3% year over year, advertising revenue will increase 19% year over year, and adjusted total revenue will increase 15% year over year.

At the same time, the report pointed out that considering Tencent Gaming's strong revenue in March-April, the year-on-year growth rate reached double digits, which may bring obvious visibility to its game revenue.

Boosted by video channel advertising revenue, the report suggests that Tencent's financial technology sector stabilized in the first half of the year, and the cloud computing sector continued to recover, and the company's Q1 and Q2 profit growth rates will remain above 20%; the company's compound annual growth rate will be the main driving force for stock prices in the second half of this year.

The buyback plan will be the focus of this Tencent earnings report. The company previously promised to buy back 100 billion yuan in 2024. So far, the company has completed about a quarter of the repurchase plan. According to media reports, as the technology company with the highest market capitalization in China, any change in its commitment to increase shareholder returns will have a broad impact on the Chinese market.

In addition, the report also lists notable information points in Tencent's latest financial report:

• The sustainability of domestic gaming growth. In particular, the revenue situation and revenue guidelines of its “Wang Zhe Rongyao” and “Peace Elite”.

• The growing momentum of online advertising on WeChat/WeChat. The state of the video channel advertising business (advertising, pricing, e-commerce GMV), and a schedule plan to level the revenue levels of other short video platforms.

• Business Services/Cloud Growth. The assessment of cloud service revenue growth prospects during the year focuses on public clouds and other SaaS/AI drivers.

• Cost control and operating leverage. Revenue inflection points are gradually emerging, and the company needs to further reduce costs to achieve a high-quality revenue growth model.

Since this year, the stock price of Tencent Holdings (ADR) has accumulated a cumulative increase of more than 30%, and the price-earnings ratio is 17 times.

Ali: GMV resumed positive growth, and Taotian EBITA declined

The report predicts that Alibaba's Q4 GMV (total commodity transaction value) will resume positive growth, increasing 6% year over year, CMR (customer management revenue, approximately equal to advertising fee+commission) increasing 2% year on year, and Taotian EBITA falling 2% year on year.

Furthermore, the report predicts that Alibaba International Digital Commerce Group (AIDC)'s loss in Q4 will increase from 400 million yuan in the same period last year to 3.5 billion yuan.

Considering the effectiveness of Alibaba's management's business strategy changes, the report said that GMV's growth may translate into a new acceleration of Alibaba's CMR growth in the second half of the year.

According to the report, the following information should also be paid attention to in Ali's latest financial report:

• A time when Taotian GMV grew and its market share stabilized. Can the “user first” strategy be transformed into a stable market share within 1-2 years, when will the “full site promotion” marketing tool be introduced to more merchants, and when will Taotian MPV reach an inflection point. Performance during the April to early May and June 18 shopping festival promotions is expected to be the key to influencing the company's Q2 performance growth.

• Taotian's FY25 EBITA Guidelines. Due to the company's possible decline in Q3/Q4 in FY24, investors will focus on the reasons (such as a high year-on-year base/impact on investment strategies) and whether management will stabilize Taotian EBITA as one of the performance targets for FY25.

• The operation status of international e-commerce platforms. The impact of the expansion of AIDC losses on profits; in order to reduce losses, Temu has switched from a fully managed model to a semi-managed model in the US and other developed markets, and is concerned whether AliExpress will follow suit and make strategic changes.

• In the second half of the year, cloud computing accelerated again and became the driving force for growth. Cloud services are expected to resume growth as the negative effects of major customer bytes leaving and reducing private/hybrid cloud investment subside.

• Shareholder returns. Focusing on repurchase and dividend policies, the company previously promised to repurchase $12 billion in 2024. So far, the company has completed a $48 repurchase program.

Since this year, Alibaba's (BABA) stock price has accumulated a cumulative increase of more than 9%, and the price-earnings ratio is less than 7 times. Goldman Sachs believes that the lower valuation means that Alibaba's stock price still has room to rise.

Editor/Somer