Recently, the overall market sentiment turned negative, leading to a correction in the sector, CICC published a research report saying. Currently, the sector's overall valuation is between the mean and the 25th percentile.

From a fundamental perspective, the sector's overall performance was solid, with healthy growth in major areas such as advertising and game. Key companies like TENCENT (00700.HK)  +1.000 (+0.166%)    Short selling $221.61M; Ratio 5.028%   continued to show improved profit margins and operating leverage.

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Overall, fundamentals were sound, and AI potential remains, but valuations are decreasing, making the sector more attractive. In summary, CICC's core recommendation is TENCENT, with suggestions to pay attention to KUAISHOU-W (01024.HK)  +0.250 (+0.389%)    Short selling $32.11M; Ratio 4.710%   , NTES-S (09999.HK)  +0.400 (+0.188%)    Short selling $61.96M; Ratio 15.274%   , NEWBORNTOWN (09911.HK)  +0.080 (+0.703%)    Short selling $3.27M; Ratio 16.546%   and BILIBILI-W (09626.HK)  -2.400 (-1.238%)    Short selling $22.38M; Ratio 9.734%   .

Most Chinese online platform companies entered the 'reasonable' range of 2026 projected PE ratios of 15-20x, meaning that, if any company's results beat expectations in the future, it may enjoy both results and valuation growth, CICC added.

BILIBILI-W has long been at an extremely high valuation within the sector, while BOSS ZHIPIN-W (02076.HK)  -0.750 (-0.931%)    Short selling $144.31K; Ratio 12.274%   , TME-SW (01698.HK)  -0.500 (-0.718%)    Short selling $28.52M; Ratio 35.853%   and NETEASE MUSIC (09899.HK)  +0.600 (+0.321%)    Short selling $4.48M; Ratio 19.709%   have been at medium to high valuation levels.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-12-24 12:25.)