CICC published a report stating that the online platform sector has been relatively sluggish since the beginning of this year, with consumption-related tracks facing short-term pressure. Meanwhile, market AI narratives have further shifted toward hardware and models, and sector valuations have fallen to below the 25th percentile of historical levels. Against a backdrop of low valuations, the broker believes there is no need to be overly pessimistic and recommends a bottom-up approach to select stocks with still-solid fundamentals.

The broker recommends TENCENT (00700.HK) -0.400 (-0.089%) Short selling $274.60M; Ratio 7.403% , believing it is a company with a low probability of long-term failure and a high probability of success in the AI era. TENCENT’s current valuation is close to the trough level of the past five years. Its core businesses, including gaming and advertising, have demonstrated strong resilience, while its AI deployment has shown signs of acceleration. Products such as Weixin Agent are expected to continue advancing and may drive valuation re-rating. Investors are also advised to pay attention to KUAISHOU-W (01024.HK) +2.680 (+6.031%) Short selling $96.75M; Ratio 6.830% , NEWBORNTOWN (09911.HK) +0.160 (+1.995%) Short selling $564.26K; Ratio 1.471% , JOYY Inc. (JOYY.US) , NTES-S (09999.HK) -1.700 (-0.869%) Short selling $92.93M; Ratio 27.848% , and BOSS ZHIPIN-W (02076.HK) -3.250 (-6.007%) Short selling $361.01K; Ratio 12.186% .

The report noted that most online platforms reported 1Q26 revenue and profit results that met or even exceeded expectations, with NTES-S delivering results that comprehensively beat forecasts. Considering gaming resilience and gross margin optimization, the broker previously raised its 2026 earnings forecast for NTES-S. It maintained forecasts for most other companies. Except for TENCENT and KUAISHOU-W, most companies’ AI investments in 2026 are expected to be partially offset by operational optimization, implying a relatively limited impact on profits. In addition, most companies maintained or accelerated shareholder returns on a YoY basis.

With increased AI investment, progress has been made in Weixin Agent. TENCENT’s 1Q26 capital expenditure reached RMB31.9 billion, up 16% YoY, of which RMB8.8 billion was invested in new AI products. The broker expects its full-year capital expenditure to grow significantly YoY, but believes the incremental capital expenditure will have a limited impact on 2026 profits. Since 1Q26, models have undergone intensive iterations. Hy3 preview and DeepSeek-V4 achieved breakthroughs, while Kling 3.0 and Seedance 2.0 have entered the first tier globally among multimodal foundation models. Recently, Weixin Agent has initiated ecosystem development and already covers high-frequency consumption scenarios. The broker believes it benefits from ecosystem and user scale advantages. However, ToC Agent applications have yet to establish a mature demand positioning and may require a longer testing period. On the enterprise side, Tencent Cloud and Kouzi have launched full-stack Agent-native tools, accelerating enterprise-level Agent deployment. (ha/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-17 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)