Dolphin Research

Below is Dolphin Research's Trans of $TENCENT(00700.HK) FY26 Q1 earnings call. For our post-results take, see 'Tencent: No Longer Resting on Past Laurels; AI Is the Way Forward'.

1) Shareholder returns: Q1 buybacks totaled approx. RMB 7.9bn. Management believes the stock is undervalued, is accelerating monetization of the investment portfolio to fund continued buybacks through the year, and sees now as a particularly attractive window for repurchases.

2) Outlook: CapEx is expected to increase materially vs. last year. Guidance points to a sharp step-up this year...

Full-year retail revenue guidance raised. Now implies 30%-35% YoY growth.

RevPAR turns positive for the first time in two years

$TENCENT(00700.HK) Q1 results are out, and the read is mixed with plenty to unpack. There are several points that warrant a closer look.

ATAT 1Q26 First Take: Overall results were solid, with RevPAR turning positive YoY for the first time in two years. Retail also beat the guidance the company issued at end-2025, and full-year revenue growth guidance was raised from +20%-24% to +24%-28%.

1) Hotel biz.: RevPAR was RMB 312 per night in Q1, up 2.4% YoY and positive on a quarterly YoY basis for the first time in two years. By driver, ADR reached RMB 427 (+2.2% YoY), marking a second straight quarter of growth and remaining the key lever.

Industry supply growth has slowed, shifting pricing power toward brands, while a higher mix of premium products at Atour structurally lifted ADR. OCC was 70.6% (+40bps YoY).

On franchise expansion, 110 hotels opened in Q1, bringing operating stores to 2,088 (+20.9% YoY). The pipeline stood at 751, with Jianye and Qingju continuing as the main opening drivers.

2) Retail biz.: Revenue was RMB 1.12bn, up 51% YoY. Based on Jiuqian channel data, Q1 online GMV across Atour's three channels rose 41% YoY, far outpacing the home textiles market (-10%), indicating further share gains.

3) Profit: GPM fell 190bps to 41.4% on higher supply-chain costs and hotel opex, including increased room service and consumables. The opex ratio edged down slightly on operating leverage.

Alibaba 4QFY26 First Take: As widely expected, this quarter’s results were weak. The key drag was heavy spending around Lunar New Year on the Qianwen app’s cash handouts and related promotions, which pushed group adj. EBITA down to RMB 5.1bn, even below profits during the peak food-delivery war in 3Q last year.

That said, the print landed toward the low end of top brokers’ ranges, so the miss vs. expectations was not severe. Specifically:

1) Marketplace CMR rose 1.2% YoY, in line with the Street. This reflects an accounting change that reclassified merchant subsidies from marketing expense to a contra-revenue item. On a like-for-like basis, CMR growth would have been ~8%.

Consistent with consensus, ecommerce growth has rebounded from the trough in 4Q last year. Adj. EBITA for the domestic ecommerce segment was RMB 24.0bn, near the lower bound of sell-side estimates.

Implied losses in food delivery remain elevated; we estimate roughly RMB 17.0bn vs. ~RMB 25.0bn in the prior quarter. Similar to last quarter, losses were near the top end of the market range, suggesting Flash Purchase is narrowing losses but Alibaba has not materially dialed back investment or its focus on delivery share.

2) Cloud revenue rose 38% YoY, in line with Bloomberg consensus but below top brokers’ ~40% view, hence a slight miss. External revenue grew 40%, showing more compute was allocated to third-party monetization, but that did not change the overall undershoot.

Segment margin was 9.1%, up 10bps QoQ. It did not deteriorate as some feared, a small positive.

Management disclosed AI-related revenue of nearly RMB 9.0bn for the quarter, or ~RMB 36.0bn annualized, now over one-fifth of total cloud revenue and still growing triple digits. Overall, cloud performance this quarter was just middling.

3) The biggest swing factor was Other Biz., which still houses Qianwen and related units under current reporting. The Lunar New Year cash giveaways on the Qianwen app and free-delivery tie-ins with Flash Purchase alone cost over RMB 5.0bn by some foreign bank estimates, and combined with model R&D and other AI investments, drove segment losses to over RMB 21.1bn, above the already-raised sell-side expectation of RMB 20.0bn.

New-biz losses increased by over RMB 11.0bn QoQ, while delivery narrowed by only ~RMB 8.0bn. Combined with seasonally weak profits in the Jan–Mar quarter, this pushed Alibaba’s overall profit to the lowest level in recent years.$Alibaba(BABA.US) $BABA-W(09988.HK)

Tencent 1Q26 First Take: Q1 delivered a mixed print vs. expectations. There is plenty to unpack.

At this stage, the market’s top questions center on AI: the roadmap, the scale of planned investment, how it could weigh on profit and buybacks, and which businesses will fund it. We offer quick takes alongside the print; expect more color on the call.

1) AI spend is set to rise: Q1 capex recognized was RMB 31.9bn (+16% YoY), which looks modest, but cash capex reached RMB 37.0bn, again reflecting prepayments for capacity.

Capex will rise meaningfully this year. Annualizing Q1 implies north of RMB 120bn.

Mgmt often includes compute leasing and foundational development spend booked in Opex when sizing total AI investment. Stripping out personnel from R&D, foundational tech spend rose 61% YoY in Q1, an acceleration.

2) Profit and buybacks under pressure: The drag has already started. In Q1, ad GPM reflected some AI-related depreciation, down 50bps YoY.

Core operating profit was RMB 66.1bn (GP minus operating expenses), up 12% YoY. While margin improved YoY, profit will likely be under pressure this year, and the Street now models low single-digit growth with a slight margin decline.

The hit to buybacks is larger. Q1 repurchases totaled HK$7.6bn, more than halved YoY.

3) Growth drivers: Turning to revenue. Q1 grew 9% YoY, with ads and games carrying the load.

(1) Ads rose 20%, beating expectations despite a weak macro, driven by better performance in Channels and search.

(2) Games rose 8% YoY, with domestic +6% and overseas +13% (+14% cc), overall below expectations.

Deferred revenue reached RMB 141.3bn at end-Q1, up 15% YoY and clearly accelerating vs. Q4.

(3) FinTech & Biz Services were broadly in line. FinTech grew single digits, while Biz Services rose ~20% on AI cloud demand and higher tech commissions from WeChat Shops。$TENCENT(00700.HK) $Tencent(TCEHY.US)

0513 | Dolphin Research Focus: 🐬 Macro/Industry 1) On May 12, the Bureau of Labor Statistics reported April CPI rose 0.6% MoM and 3.8% YoY, with core CPI at 2.8% YoY, all higher vs. prior. Energy and shelter remain the key drivers.

JD 1Q26 First Take: a brief note first, with a fuller review to follow when time permits. Overall, results beat market expectations and align with prior guidance that performance has bottomed and is turning up.At the headline level, revenue growth reaccelerated to ~5%, ahead of the 3.4% consensus. Adj. OP came in at RMB 5.6bn; with a sharp reduction in food-delivery losses, profit improved markedly vs. Q2–Q4 2025, though it was still down by more than half YoY.

By segment, core Mall revenue growth recovered to 1.8%. Within that, appliances and electronics revenue fell nearly 9% YoY as state subsidies faded, while general merchandise and 3P services posted solid growth, driving a slightly better-than-expected recovery for the Mall segment.Mall profit materially beat as well, returning to growth at +16.5% YoY vs. Bloomberg cons. expecting a decline. Despite opex rising ~11% YoY, the key driver was a significant GPM expansion of 180bps.Beyond mix shifts, JD likely secured better supplier terms, partially offsetting the drag from lower state subsidies.

Other businesses, including food delivery, posted a loss of ~RMB 10.4bn this quarter, narrowing by ~RMB 4.5bn QoQ. This clearly reflects sharply lower losses after JD largely exited head-on competition in food delivery.

With Mall profitability beating, food delivery losses narrowing as expected, and logistics performing well, JD delivered a solid quarter. That said, the rebound had been well telegraphed, so the surprise vs. expectations is limited.$JD.com(JD.US) $JD-SW(09618.HK)

Below is Dolphin Research's Trans of $Sea(SE.US) FY26Q1 earnings call.

Often dubbed Southeast Asia's 'mini Tencent', $Sea(SE.US) reported Q1 2026 results pre-market on May 12 (U.S. time). The quarter was solid, with revenue growth and profit delivery both beating estimates.

Below are Dolphin Research's notes from the $Tencent Music(TME.US) FY26 Q1 earnings call.

$Tencent Music(TME.US) Q1 results were largely in line with expectations, consistent with last quarter's guidance. Expenses came in slightly lower than the Street had modeled.

After a sharp pullback in the share price, bearish sentiment on Pop Mart has built quickly. How should we view the stock at current levels? Based on the newly released Q1 data, here is a quick take on $POP MART(09992.HK).

A quick math check: using channel checks and assuming last year's Q1 contributed 40% of 1H revenue (~RMB 5.5bn), and taking the midpoint of a 75%–80% growth range, 1Q26 revenue is roughly RMB 9.8bn.Against last year's peak Q4 (estimated ~RMB 10.4bn, assuming 2H was 45% of full-year), the QoQ decline is single digit.This contrasts with some foreign brokers' expectations for a double-digit QoQ drop and, in our view, constitutes a topline beat.

China: +100%–105% YoY stands out as the biggest surprise, driven by the rapid ramp of newer IPs such as Xingxingren and continued strength in online channels.With category expansion into accessories and desserts, the domestic market is far from saturated, and refined operations still leave ample room for growth.

APAC: +25%–30% YoY remains the core overseas base and the earliest to scale.After two years of explosive growth in SEA, the region has entered a 'high-penetration + high-base' normalized phase, making this growth pace steady and broadly in line.

Americas: +55%–60% YoY / Europe: +60%–65% YoY look soft considering the low base and low penetration a year ago, falling short of the expected high-growth elasticity.Management flagged on the call that both regions are in an organizational upgrade and localization transition, and will temporarily slow the pace of store openings and marketing.This is also the main reason the company proactively trimmed its 2026 growth target.

Taking guidance of no less than 20% growth and the stronger-than-expected domestic Q1, we model a mid-to-high case of +23%, implying full-year net profit of ~RMB 16bn (c. 12x P/E).The market appears to price Pop Mart as a cyclical consumer name 'highly dependent on a single IP, with growth decelerating and margins peaking'.In our view, its core competitive moat remains intact, and the current levels underestimate the platform value.

SE 1Q26 First Take: solid print, with both revenue growth and profits beating.

Total revenue was ~$7.1bn, up 47% YoY, well above last quarter's pace and street estimates.

Margins were below the record highs of the prior-year quarter.

Games was the standout.

Based on company disclosures and press reports, the beat was driven by another Free Fire tie-up with top IP Jujutsu Kaisen, with engagement on par with the Naruto event.

E-com performed fine but not stellar.

E-com segment margin was 0.6% of GMV this quarter, defying guidance for further slippage with a small QoQ rebound.

Fin. services was softer.

GPM continued to improve.

TME 1Q26 First Take: Q1 results were largely in line with prior guidance, with slightly lower-than-expected opex driving a modest earnings beat. Core music subs growth slowed under intensifying competition, while management pushed into non-subscription adjacencies.

More notable than the print, pre-mkt approval of the Ximalaya acquisition paves the way for faster integration and access to audiobook users. It also clears the path to resume buybacks; with healthy cash generation, a largely unused two-year RMB 1bn repurchase authorization, and a RMB 370mn dividend, the implied total shareholder return is ~6.2% on a RMB 14bn market cap if executed as planned.

(1) Total revenue grew 7%, with subscription revenue up 6.6%. Management stopped disclosing paying-user metrics from this quarter. Based on last quarter's strategy to lower the paywall to improve stickiness, we estimate Q1 net adds of ~1mn subs, with ARPPU down QoQ to RMB 11.7 (for reference).

(2) Non-subscription revenue (ads, offline concerts, digital albums, etc.) rose 28%, with growth decelerating QoQ. The slowdown likely reflects a late Chinese New Year amplifying concerts' off-season effects, yet growth remains robust.

(3) Social entertainment revenue fell 11%, worsening further. Beyond ongoing pressure on live streaming, QM data suggest the karaoke business is being hit by traditional peers and AI, as one of AI's main C-end use cases is song covers that overlap with the K-song experience. As a result, WeSing MAUs continue to decline.

(4) GPM was 44.9%, up 30bps QoQ, helped by mix shift toward higher-margin non-sub businesses (e.g., ads) and scaled content-cost optimization. On opex, S&M stayed elevated, reflecting sustained user acquisition and marketing efforts, while G&A was flat YoY and down QoQ, likely due to headcount optimization.$Tencent Music(TME.US) $TME-SW(01698.HK)

0512 | Dolphin Research Focus — Macro/Industry. The BLS will release Apr CPI at 20:30 Beijing time on Tue, with the street expecting 3.7%–3.8% YoY and 0.6% MoM, as core inflation is supported by rents and oil.

Below is Dolphin Research's Trans of $Circle(CRCL.US) Q1 2026 earnings call. For our take, see 'Circle: Ugly tape, but the No.1 stablecoin play keeps expanding'.

On May 11 pre-market ET, the first listed stablecoin play $Circle(CRCL.US) reported Q1 2026 results. The release frames how investors assess drivers beyond rates and USDC scale.

Because USDC circulating supply and reserve asset yields are public, roughly 95% of interest income is largely knowable. As a result, Circle's share price has mostly tracked changes in USDC market cap, effectively a proxy for rate-cut expectations and shifts in crypto policy.

Where the print can surprise is in non-interest revenue, internal operating efficiency, and the guidance. These elements signal the company's medium- to long-term strategic priorities.

Circle 1Q26 First Take: With USDC supply and reserve asset yields publicly known, interest income, ~95% of revenue, is largely predictable. As a result, Circle's share price tends to move with USDC, essentially tracking rate-cut expectations and shifts in crypto policy.

The real delta in the print lies in non-interest income. It also reflects internal operating efficiency and guidance that signals mid-to-long-term strategic goals.

Q1 results looked softer than expected. Core indicators did not miss.

(1) Revenue delta: Mostly from interest income, which is driven by the above public data and timing lags. Other revenue tied to ecosystem expansion (CPN, Arc chain, etc.) beat. USDC Avg. circulating supply was $75.2bn, down QoQ on weaker crypto trading activity, while USDC's stablecoin market share held flat at 28%.

(2) Profit under pressure: OP declined markedly YoY. In a rigid investment cycle, when the largest component, interest income, is hit, profits are highly sensitive.

However, as the share of USDC retained on Circle's platform continued to rise (up 100bps QoQ to 18%), the external revenue-sharing ratio on reserve interest dipped by 100bps. This should keep optimizing and lift profitability.

Additionally, mgmt kept FY26 Adj. opex guidance at $570–585mn. That is better than the market's higher spend assumption of $725mn.

(3) Call focus: The CLARITY Act saw fresh progress last week, with a compromise framework moving forward though details remain to be clarified. Coinbase mgmt expects enactment by late summer; watch Circle mgmt's comments for corroboration.

Also watch how mgmt plans to balance elevated current investment with future output, and the pacing of that transition. $Circle(CRCL.US)

0511 | Dolphin Research Watch: 🐬 Macro/Industry update. U.S. President Trump will pay a state visit to China on May 13–15, the first by a U.S. president in nine years.

Below is Dolphin Research's Trans of $Block(XYZ.US) FY26 Q1 earnings call. For the earnings analysis, please see 'US Alipay Block: growth driven by credit, profits from layoffs?'.

The US 'Alipay' — $Block(XYZ.US) (XYZ.US) — reported Q1 2026 results after the US close on May 8. The quarter was solid, with revenue and profit beating estimates and momentum improving. Guidance for next quarter was also constructive, with a positive tone on trends.

1) Growth and profitability were both strong. Total revenue rose ~5% YoY, weighed by a sharp decline in bitcoin revenue.

Ex‑bitcoin, core revenue was about $4.26bn (+~23% YoY). Growth accelerated by ~100bps vs. last quarter and was clearly ahead of Bloomberg estimates...

Below is the FY26Q1 Airbnb earnings call Trans compiled by Dolphin Research. For our earnings review, see 'Airbnb: Near-term results look fine, but facing a midlife crisis?'.

Alt. stays leader Airbnb$Airbnb(ABNB.US) released FY26 Q1 results this morning (May 8). Overall, the quarter was solid, with most metrics slightly beating estimates. Growth metrics accelerated on FX tailwinds.