TENCENT Earnings Report Released Today: Institutional Outlook and HK$740M Inflows into Internet ETF (513770)

Deep News
Yesterday

On November 13, Hong Kong stocks turned sluggish again, with the Hang Seng Tech Index dropping 0.77% intraday. Most tech giants retreated, with TENCENT down 0.91%, while Alibaba-W, Xiaomi-W, Meituan-W, and Kuaishou-W fell over 1%.

The Hong Kong Internet ETF (513770), heavily weighted in internet leaders, dipped 1.03%, approaching its half-year moving average. Persistent intraday premiums signaled strong buying interest.

As earnings season begins for Hong Kong’s internet giants, TENCENT is set to report today. CLSA forecasts a 14% YoY revenue rise to RMB190 billion, with adjusted EBIT up 21% to RMB74.1 billion. Key drivers include an 18% growth in gaming, 20% in advertising (boosted by tech upgrades), and over 20% in cloud services. CLSA highlights TENCENT as a prime AI beneficiary, expecting resilient growth in Q4.

Analysts note November’s strong fundamental momentum for Hong Kong stocks, with tech growth assets maintaining solid industry logic amid volatility. Huatai Securities emphasizes tech self-sufficiency as a long-term theme under China’s 15th Five-Year Plan, urging focus on TENCENT and Alibaba’s AI-linked earnings.

Despite market swings, investors are positioning ahead of earnings. The Hong Kong Internet ETF (513770) saw inflows for 9 of the past 10 days, totaling HK$742 million.

The ETF tracks the CSI Hong Kong Internet Index, which is dominated by Alibaba-W (18.89%), TENCENT (17.01%), and Xiaomi-W (10.05%), with top 10 holdings comprising over 73%.

Boosted by AI, the sector has outperformed the Hang Seng Tech Index. Valuation remains attractive, with the index’s PE at 24.44x (10-year 24.8% percentile), below Nasdaq 100 (35.94x) and ChiNext (41.27x).

With assets exceeding RMB11.8 billion and average daily turnover over RMB600 million, the ETF offers T+0 trading without QDII limits. For lower volatility exposure, consider the Hong Kong Large-Cap 30 ETF (520560), blending tech (TENCENT, Alibaba) with high-dividend stocks (CCB, Ping An).

Warning: Recent volatility underscores the need for risk management. Past index performance (2020: +109.31%; 2021: -36.61%; 2022: -23.01%; 2023: -24.74%; 2024: +23.04%) doesn’t guarantee future results. The ETF carries R4 (high-risk) rating, suitable for aggressive investors (C4+).

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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