Daily Investment Strategy
Daily focus：Tencent holding（0700）
Tencent delivered strong performance in Q4 2024, with total revenue reaching RMB172.4bn, up 11% yoy and 3% quarter-on-quarter, exceeding analyst expectations by 2-3.5%. Non-IFRS net profit was RMB55.3bn, achieving significant yoy growth of 30%, with earnings per share reaching RMB5.91, exceeding market expectations by 8% . By segment, Value-Added Services revenue was RMB79.0bn (up 14% yoy), with online games revenue reaching RMB49.2bn (up 20% yoy) and domestic games performance particularly strong, growing 23% yoy to RMB33.2bn; online advertising revenue reached RMB35.0bn (up 17% yoy), primarily driven by strong demand for Video Accounts, Mini Programs, and WeChat search; Fintech and Business Services revenue was RMB56.1bn (up 3% yoy). The company significantly increased capital expenditure to RMB36.6bn (up 386% yoy), with full-year 2024 capital expenditure reaching RMB76.8bn (up 221% yoy), reflecting major investments in artificial intelligence infrastructure. Total Value-Added Services subscribers grew 7% yoy to 262mn, with video subscribers reaching 113mn and music subscribers reaching 121mn.
The Fed maintained the rates and downgraded economic growth
The Fed maintained the fed fund rate at 4.25%-4.50% at its latest interest rate meeting, in line with market expectations. Chairman Powell said after the meeting that the downward trend in inflation may be delayed due to factors such as tariffs, indicating that concerns about the inflation outlook have intensified. The Fed also lowered its economic growth forecast for this year to 1.7% (down from 2.1% previously) and raised its inflation forecast to reflect increased economic uncertainty. Powell's comments suggested the Fed may need to keep interest rates higher for longer to counter potential inflationary pressures. In addition, the Federal Reserve announced that it would implement a new balance sheet policy starting in April, which would help ease market concerns about bank reserves and provide some support to financial markets. The decisions reflect the Fed's strategy of seeking a balance between slowing economic growth and inflation risks.
Hong Kong Stock Connect recorded a net inflow of HK$11.79bn on Wednesday, of which Tracker Fund of Hong Kong (2800) recorded the largest net inflow of HK$3.88bn, followed by Hang Seng China Enterprises (2828); Meituan (3690) recorded the largest net outflow of HK$860mn, followed by Tencent (0700).
Cheung Cho Shing, Joseph 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/ACQ030/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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