Daily Investment Strategy
Daily focus：Tencent Holdings（0700）
The company demonstrated solid growth in its second-quarter 2025 results, with total revenue increasing 15% YoY to RMB 184.5bn, exceeding market expectations. Strong performance across all business segments was driven by strong growth in gaming revenue and online advertising revenue, with year-on-year increases of 22% and 20%, respectively, becoming key growth drivers. A highlight of this quarter's financial report was that profit growth outpaced revenue growth, with gross profit increasing 22% YoY, primarily driven by contributions from high-margin businesses such as domestic games and improved cost efficiency. Furthermore, the application of artificial intelligence technology has shown initial success, injecting new momentum into future growth.
Rate cut on September come more certain
The Federal Reserve’s potential shift in policy is becoming the most important macroeconomic driver for global markets. July inflation data showed that while core inflation rose to 3.1%, the overall moderate inflation performance has provided the Fed with room for policy pivot. Market expectations for a September rate cut have approached certainty, with even Treasury Secretary Bessent publicly suggesting implementing a substantial 50 basis point cut to compensate for previously missed opportunities. This shift in policy expectations is reshaping global capital flow patterns, with dollar weakening expectations driving funds toward emerging markets, particularly benefiting Asian equity markets significantly. The extension of the China-US trade truce provides an additional stabilizing factor for markets.
Southbound Stock Connect recorded a net outflow of HKD 8.27 billion on Wednesday. Among the stocks, Innovent Biologics (1801) saw the largest net inflow of HKD 709 million, followed by Li Auto (2015). On the other hand, Tracker Fund of Hong Kong (2800) recorded the largest net outflow of HKD 6.85 billion, followed by Hang Seng China Enterprises Index ETF (2828).
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.
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