Daily Investment Strategy
Daily focus：Tencent（0700）
On February 15, WeChat's homepage began testing the integration of DeepSeek's "AI Search." This integration utilized AI Agent technology to streamline WeChat's ecosystem, for example, by automating the entire process of restaurant reservations, thereby breaking through the existing modularized and fragmented state. This data-closed loop not only enhanced the efficiency of advertising recommendations (similar to Meta's monetization model) but also facilitated the exploration of new business models, such as subscription-based AI assistants. With WeChat's 1.33bn monthly active users as a foundation, the report suggested that if DeepSeek could increase the average daily usage time by 10%, it could theoretically create an incremental value of over 10bn value. Tencent was one of the stock picks in 2025. As the current stock price had already exceeded the target price of HKD 507, the recommendation was to raise the target price to HK$550.
Patrick Harker remains confident in the long-term trajectory for U.S. interest rate cuts.
Philadelphia Federal Reserve President Patrick Harker stated that the current restrictive monetary policy was at an appropriate level, emphasizing the need to maintain stable interest rates until inflation cooled down sustainably. He noted that despite the market's resilience following three interest rate cuts last year (with 2024 GDP growth at 2.5% and an unemployment rate holding at 3.7%), the 3.1% yoy increase in the January CPI indicated persistent inflationary pressures. Harker believed it was necessary to clarify the interference of seasonal adjustment factors on the data. He supported the Federal Reserve's decision to pause interest rate cuts in February, anticipating that if the economy progressed on its current trajectory, inflation was likely to fall back to the 2% target in the next two years. That means the higher interest rate policy would naturally decline.
On Monday, net inflows into Hong Kong stocks via the Stock Connect totaled HK$10.8bn. Alibaba (9988) saw the largest net inflow at HK$3.66bn, followed by China Mobile (0941). Conversely, Tencent experienced the largest net outflow at HK$1.67bn, followed by Meituan (3690).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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