$TENCENT(00700)$ , $MEITUAN-W(03690)$ , and $PDD Holdings Inc(PDD)$ are expected to report their Q4 2024 results this week, with solid performance anticipated.
Revenue growth is forecasted at 8%, 19%, and 24% year-on-year, respectively, with adjusted EBIT growth of 22%, 405%, and 11%. Investor focus is on AI-related investments, competition in e-commerce and offline services, international investment budgets, profit growth expectations across business segments, and shareholder return plans.
Goldman Sachs rates Tencent as "Buy" with a target price of HKD 534.
Q4 game revenue is expected to grow by 17%, and ad revenue by 12%, with adjusted EBIT at RMB 60 billion, up 22% YoY. Investors are focused on Tencent's balance between AI investments and shareholder returns, especially after last year's stock buybacks. Tencent’s classic games continue to grow healthily, and AI-driven online ad revenue is expected to expand.
Meituan also receives a "Buy" rating with a target price of HKD 200.
Q4 food delivery volume is expected to rise 10%, with IHT EBIT at RMB 4.6 billion, and group EBIT at RMB 9.5 billion. Investors are interested in Meituan's focus on grocery retail, international business, and AI/robotics. Despite competition with Douyin, Meituan aims to maintain GTV and content/merchant coverage leadership. Core Local Commerce EBIT is expected to grow 17%, below the consensus estimate of 22%.
Pinduoduo is rated "Buy" with a target price of $157.
Q4 online marketing revenue is forecasted to grow 17% YoY to RMB 56.7 billion, with commission revenue up 34% to RMB 53.7 billion, and adjusted net profit of RMB 28.4 billion, up 11%. Investors are concerned about Pinduoduo's response to tax policies and tariffs for its U.S. business, and its GMV growth outlook. While profit growth is expected to slow to 11%, Pinduoduo’s strong free cash flow may lead to a reassessment of shareholder returns.
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