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<Research>G Sachs: Investors Concern about TENCENT's Game Biz Re-acceleration, BABA E-Commerce, Cloud Biz Growth, Shareholder Return Guidance
Recommend 55 Positive 84 Negative 37 |
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The share prices in Chinese Internet sector surged by a total of 15% YTD, Goldman Sachs released a research report saying. With TENCENT (00700.HK) and BABA-SW (09988.HK) set to release results tomorrow, Goldman Sachs focused on a number of key figures from the results of the two companies mentioned above. Goldman Sachs believed that the market's focus on the company's 1Q24 net profit, forward-looking comments around 2Q24's top line growth, and any updates to shareholder return policies will be closely watched as the next key share price drivers. While Goldman Sachs expected only mid-single-digit YoY group revenue growth for 1Q24 at both companies, for TENCENT, the broker believed that the double-digit growth in the company's games from March to April could provide clarity on the growth pace of the games business in 2Q24, according to the report. As for BABA-SW, Goldman Sachs noticed that the total parcel volume in China was better than expected recently, with growth of over 20% in April, and a 30% YoY growth during the Labor Day holiday period. Goldman Sachs believed that the BABA management's counterattack strategy for the e-commerce sector continues to gain traction, and that the sales growth rate of Taobao-Tmall will outpace the national sales growth rate in the recent months. Goldman Sachs continued to prefer the internet sector, followed by education, games and e-commerce. Among the stocks with rating at Buy, Goldman Sachs liked Full Truck Alliance Co. Ltd. (YMM.US), BOSS ZHIPIN-W (02076.HK) and Tencent Music Entertainment Group (TME.US) in the internet sector. The broker was optimistic about New Oriental Education (EDU.US) in the education sector. Goldman Sachs also preferred TENCENT and NTES-S (09999.HK) over other smaller players in the game sector. Among e-commerce ads stocks, Goldman Sachs liked KUAISHOU-W (01024.HK), while BABA-SW is preferred over PDD Holdings Inc. (PDD.US). AAStocks Financial News |
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