On August 16, 2024, the Hang Seng Technology Index in Hong Kong rose over 2%, while the Hang Seng Index rose nearly 1.9%. JD.com is strengthening, with JD Logistics up 14%, JD up nearly 8%, and JD Health up nearly 6%. In addition, Alibaba, Meituan, Baidu, and Wanguo Data all rose by over 3%.
In terms of related ETFs, the Hang Seng Technology Index ETF (159742) opened high and rose, now up 1.72%, with a turnover of over 78 million and a turnover rate of 8.04%, indicating active trading. The constituent stocks have more gains and less losses, with JD Group rising over 8%; JD Health has risen by over 7%; Kingdee International rose nearly 5%; Meituan and Alibaba have risen by over 3%; Baidu Group, Ideal Auto, Ping An Good Doctor, and Alibaba Health have risen by over 2%.
Hong Kong stock Internet ETF (159568) rose by 1.72% in intraday volatility, with turnover exceeding 2 million, turnover rate of 5.65%, and active trading. Component stocks tend to rise more than fall, with JD Health rising over 7%; Kingdee International and Weimeng Group rose by over 4%; Meituan has risen by over 3%; Alibaba Pictures and Maoyan Entertainment have risen by over 2%.
On the news front, Alibaba announced the performance of 1QFY25 (ending in March): total revenue was RMB 243.2 billion, a year-on-year increase of 3.9%, lower than the consensus expectation of 2.6%, due to the reduction of certain direct sales businesses and lower than expected growth in customer management revenue (CMR). The adjusted EBITA/non GAAP net profit for this quarter were RMB 45 billion/RMB 40.3 billion, both 6% higher than expected, thanks to the operational efficiency improvement of almost all major business departments exceeding expectations.
CMB International believes that these performance indicators demonstrate Alibaba's ability to improve operational efficiency in its business units, and the management has identified a clear path to enhance the profitability of Taobao Group in the coming quarters. We believe that key strategic growth areas such as Cloud Intelligence Group and International Digital Commerce Group will support Alibaba's long-term revenue and profit growth, while potential dual major listings in Hong Kong and inclusion in the Hong Kong Stock Connect may drive valuation reassessment.
At the same time, JD.com announced better than expected 2Q24 performance: revenue of RMB 291.4 billion, a year-on-year increase of 1%, in line with CMB International's expectations and consistent expectations; The non GAAP net profit was RMB 14.5 billion, exceeding CMB International's expectations/market consensus expectations of RMB 9.9 billion/RMB 9.6 billion, thanks to the expansion of gross profit margin caused by economies of scale exceeding expectations, as well as better than expected other revenue items. We hold a positive attitude towards JD's profit growth trajectory in the second half of 2024, thanks to cautious investment under strict ROI targets and the benefits brought by economies of scale. However, in addition to the additional benefits brought by the national home appliance trade in program, considering that the company's stock repurchase plan is nearing its limit, JD.com needs to demonstrate its ability to maintain market share in the core electric product category to drive further valuation reassessment in the current market environment.