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2026-11-09 16:24:12 Goldman Sachs said in a research report that key themes for the upcoming 3Q results of major Chinese internet companies include: first, mixed revenue performance, with weak consumption continuing to weigh on e-commerce, advertising and local services, while gaming (the broker's preferred sub-sector), cloud and internet verticals provide more defensive growth; second, free cash flow and capex financing, with hyperscale cloud providers expected to see AI capex decline QoQ in the quarters ending December and March due to short-term chip supply constraints, though capex forecasts for 2027-2028 are still expected to be revised upward given rising computing procurement prices and expanding domestic computing capacity; third, AI model improvement and monetization; and fourth, ongoing regulatory developments in both AI and non-AI areas. The broker forecast combined net profit for Chinese internet companies to rise 9% YoY in the September quarter, compared with YoY declines of 10% and 32% in the June and March quarters respectively. Among them, BABA-W (09988.HK) is expected to report a 165% YoY increase in net profit due to reduced food delivery investment and higher cloud profit; MEITUAN-W (03690.HK) is expected to report a 114% YoY increase in net profit driven by improved food delivery unit economics; JD-SW (09618.HK) is expected to report a 39% YoY increase in net profit due to lower food delivery investment; TENCENT (00700.HK) is expected to post a 3% YoY decline in net profit due to increased AI-related investment; and PDD Holdings Inc. (PDD.US) is expected to report a 21% YoY decline in net profit due to costs related to the removal of Temu's small-parcel exemption in Europe and increased investment in "New Pinduo". The broker maintained a Buy rating on TENCENT (00700.HK) with an unchanged 12-month TP of HKD650, while slightly lowering its 2026-2028 net profit forecasts by 0.3% to 0.9%. It expects 3Q revenue to rise 9% YoY and adjusted EBIT to fall 1% YoY, with gaming and marketing services revenue increasing 8% and 19% YoY respectively. Goldman Sachs maintained a Buy rating on Alibaba Group Holding Limited (BABA.US), with TP for Alibaba ADR and H shares at USD177 and HKD172 respectively. It expects customer management revenue to decline 5% YoY (or rise 1% on a comparable basis), cloud revenue growth to accelerate to 53%, and adjusted EBITA to rise 238% YoY. The broker maintained a Buy rating on PDD Holdings Inc. (PDD.US) with a TP of USD134. It expects 3Q revenue to rise 4% YoY and adjusted EBIT to decline 20% YoY. Goldman Sachs maintained a Buy rating on MEITUAN-W (03690.HK) with a TP of HKD123. It expects 3Q revenue to rise 19% YoY and adjusted EBIT to rise 104% YoY. Goldman Sachs maintained a Buy rating on JD.com, Inc. (JD.US), with TP for JD ADR and H shares at USD43 and HKD169 respectively. It expects 3Q revenue to rise 3% YoY, adjusted EBIT to increase 24.58x YoY, and group net profit to rise 39% YoY.(da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |