Daily Investment Strategy
Daily focus：Meituan（3690）
The U.S. Department of Defense announced last Monday that it has added Chinese tech giants including Tencent Holdings and CATL to the 1260H list. This move has reignited market fears of further pressure on Chinese companies, potentially leading to short-term capital outflows from stocks with higher geopolitical risks to those perceived as safer, including Meituan. Since the end of September, a series of monetary and fiscal stimulus measures have been introduced in mainland China, which are expected to improve consumer sentiment and benefit Meituan. The "Super Member" program, offering discounts across food delivery, in- store, and travel services, enhances cross-selling opportunities. Meituan’s In-store and travel orders rose over 50% yoy in 3Q24, with record-high active users and merchants. We expect that this year's policy focus will be on intensifying efforts to drive consumption recovery, with large-scale consumer stimulus likely to be mentioned again at the "Two Sessions." Meituan stands to benefit from the policy tailwind. Target price: $180.
US PPI lower than expected
The U.S. producer price index rose 0.2% in December from the previous month, which was lower than the expected 0.4% increase. Compared to a year earlier, PPI increased by 3.3%, higher than the 3.0% last month, but lower than the 3.5% expected. Cooling inflation data helped stem a rise in U.S. Treasury yields. Meanwhile, the consumer price index will be released on Wednesday. Economists expect the CPI to increase by 2.9% annually in December, higher than the 2.7% increase last month. On a monthly basis, the figure is expected to be unchanged from November's 0.3%.
Hong Kong Stock Connect had a net inflow of HK$12.1bn on Tuesday of which Tencent (700) had the largest net inflow, reaching HK$3.15bn; followed by SMIC (981). XPeng (9868) recorded the largest net outflow at $0.08bn, followed by Weimob (2013).
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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