Recommended Stock：Tencent（700）
As China's macroeconomic outlook improves, Tencent's payment business may benefit from a recovery in the retail market, while its advertising business could gain from increased spending by merchants. However, if the macroeconomic situation does not improve, Tencent maintains a defensive position compared to other tech stocks due to its game segment, which accounts for over one-third of its revenue and is less correlated with economic cycles. Market research firm Sensor Tower announced that TENCENT's "Honor of Kings" remains the highest-grossing mobile game worldwide. Meanwhile, "Pokemon Trading Card Game Pocket" secured the second spot, followed closely by "Royal Match", "MONOPOLY GO!" and "Last War: Survival". Tencent is one of our top picks for 2025. Target price: $507.
US Consumer Confidence dropped
US Conference Board Consumer Confidence dropped to 104.7 in December, falling short of expectations for 113.2 and down from 112.8 in November. Consumer views of current labor market conditions continued to improve, consistent with recent jobs and unemployment data, but their assessment of business conditions weakened. Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes. Moreover, pessimism about future employment prospects returned after cautious optimism prevailed in October and November.
Hong Kong Stock Connect had a net inflow of HK$2.65bn on Monday of which ICBC (1398) had the largest net inflow, reaching HK$1.07bn; followed by SMIC (981). Meituan (3690) recorded the largest net outflow at $1.22bn, followed by Kuaishou (1024).
On Christmas Eve, the Hong Kong stock market will be close for second half trading session. The Hang Seng Index opened 28 points higher and then expanded its gains, rose by 282 points at one point to reach a high of 20,165 points. It closed up 215 points or 1.1% at 20,098 points. The China Enterprises Index rose 90 points or 1.2% to close at 7,303 points. The Hang Seng Tech Index rose 49 points or 1.1% to close at 4,507 points. The total turnover for the half-day session was HKD 84.59 billion. Xiaomi's (1810) mobile division president, Lu Weibing, estimated that Xiaomi's annual smartphone shipments would reach 170 million units, an increase of 16% year-on-year. Xiaomi's stock price rose 3.2% to HKD 32.75, hitting a more than three-and-a-half-year high.
Source: KGI Investment Strategy
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The dot plot indicates that there may only be two rate cuts next year, and the long-term terminal rate will be raised. In terms of investment themes, the resurgence of mergers and acquisitions in industrial stocks is beneficial for the industry's performance. Mergers and acquisitions are expected to rebound from the bottom in 2025, investors should pay attention to…