Daily focus：Tencent Music(1698)
has demonstrated strong defensive capabilities and competitive advantages in a highly competitive market through its integrated online and offline services. While recent market concerns about competition from emerging platforms causing stock price volatility suggest an overreaction, analysts believe the market has actually overreacted. In fact, the group's paid subscriber base has increased rather than decreased, reflecting extremely high user stickiness. Through long-term exclusive collaborations with top artists and the active development of "fan economy" initiatives such as concerts and merchandise, the group has successfully consolidated its core customer base and effectively driven growth in average revenue per user (ARPU) and the number of paying subscribers by enhancing its SVIP membership strategy. In terms of valuation, the current stock price level provides an excellent margin of safety for investment. As the market digests competition concerns, the forward price-to-earnings ratio has fallen, making valuations increasingly attractive.
Baidu Announces Spin-off of AI Chip Unit "Kunlunxin"
Baidu announced the spin-off of its AI chip unit, "Kunlunxin," for a Hong Kong listing. This move significantly boosted Baidu's stock price, reflecting a market reassessment of the potential value of tech giants. From a macro-strategic perspective, this signifies a shift in the capital operation model of Chinese internet giants: from the "soft economy" of monetizing traffic to the "hard technology" of building underlying computing power. Against the backdrop of tightening US chip export restrictions, spinning off the semiconductor business not only avoids the conglomerate discount of the parent company but also allows direct access to industrial capital focused on hard technology, resulting in higher valuation premiums. If more tech leaders follow this "asset independence" strategy, it will drive the Hong Kong stock market's structural transformation from the traditional internet sector to the AI hardware industry chain through capital means, providing a new core growth engine for the market.
The Hong Kong Stock Connect was closed last Friday and will resume today.
Hong Kong stock market closed today on Lunar New Year's Eve. The HSI opened 53 points lower and continued to fall, closing down 224 points, or nearly 0.9%, at 25,630. The HSCEI closed down 77 points, or nearly 0.9%, at 8,913. The HSTECH closed down 62 points, or 1.1%, at 5,515. Total market turnover was HK$119.67bn. Some resource stocks bucked the trend and were favored. Zijin Mining (2899) issued a profit warning, expecting its full-year profit to increase by about 59% to 62%, and its share price closed up 0.8%. Major auto stocks diverged, with Great Wall Motor (2333) rising more than 3%; however, BYD (1211) and Li Auto (2015) fell 2.3% and 1.4%, respectively.
Source: KGI Investment Products and Solutions Department
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