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| HSI1 | 23,153.89 | +482.03 | 172.93B |
| HSCEI1 | 7,670.77 | +209.93 | 49.23B |
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2026-06-29 10:38:18 The recent marked underperformance of the Chinese internet sector versus the broader market has intensified, mainly because the sector has continued to be viewed as a funding source for the rally in global AI hardware stocks, Citi said in its report. However, the latest round of sell-off has created attractive valuation opportunities. The broker believed and hoped that the sector is approaching a floor. Even under stress tests assuming potential earnings cuts of 10-30%, valuations on an ex-cash basis remain highly attractive. Companies with strong core businesses and solid cash flow generation capabilities are expected to navigate through this cycle. The broker noted that most Chinese internet companies maintain solid net cash positions. As of 1Q26, BIDU-SW (09888.HK) had net cash of USD27.9 billion (representing 78.8% of its market cap), while NTES-S (09999.HK) had net cash of USD24.3 billion (33.1% of its market cap). In terms of outstanding share repurchase authorizations, BABA-W (09988.HK) still had USD19.1 billion remaining, TRIP.COM-S (09961.HK) had USD5 billion, BIDU-SW had USD4.8 billion, NTES-S had USD2.9 billion, and JD-SW (09618.HK) had USD1.4 billion. The broker estimated these companies may accelerate their share buybacks in the coming weeks. ~ AASTOCKS Financial News Website: www.aastocks.com | |