Daily Investment Strategy
Daily focus：Tencent Music（1698）
Tencent Music continues to show steady growth in its performance, mainly benefiting from a strategic shift—from previously focusing on user quantity to now emphasizing increasing user revenue contribution. Recently, the company has been actively acquiring or increasing stakes in similar enterprises to expand its resources. Earlier, it announced an equity investment in SM Entertainment, acquiring a 9.66% stake and becoming the second-largest shareholder. This marks an upgrade in their strategic partnership. Yesterday, Tencent Music further announced the acquisition of Ximalaya Holdings, a major audio platform in China whose core businesses include audiobooks and popular entertainment content podcasts. This acquisition is expected to help Tencent Music integrate resources and enhance user experience.
China-US trade negotiations are becoming more optimistic
The US stock market showed a cautiously optimistic trend yesterday, with the S&P 500 index rising slightly by 0.2%, approaching its historical high, reflecting investors' cautious expectations for the progress of China-US trade negotiations. US Commerce Secretary Lutnick said that the second round of London talks went "very smoothly", injecting positive sentiment into the market, especially the semiconductor sector, which benefited from the expectation that chip export restrictions may be relaxed and rose by 2.4%. However, investors are still closely watching the breakthrough progress of core issues such as technology transfer and rare earth exports. With the upcoming release of inflation data on Wednesday, the market is worried that the Trump administration's tariff increase may push up the inflation rate, which in turn affects the Federal Reserve's interest rate policy. Any substantial improvement in Sino-US trade relations will have a profound impact on the reconstruction of the global supply chain, especially for the technology and energy sectors. This is not only related to short-term market fluctuations, but also to the reconfiguration of long-term investment strategies and the adjustment of risk assessment frameworks.
Hong Kong Stock Connect recorded a net inflow of HK$7.6bn on Tuesday, of which Meituan (3690) had the largest net inflow of HK$990mn, followed by CSPC Pharmaceutical Group (1093); Tencent (0700) recorded the largest net outflow of HK$1.9bn, followed by Xiaomi Group (1810).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to: https://apps.sfc.https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.
