UOB Kay Hian said the highlights of Greater China's internet sector in 2Q26 remained AI/AI cloud. AI cloud revenue of BABA-W (09988.HK) +3.100 (+2.884%) Short selling $660.59M; Ratio 14.335% and BIDU-W (09888.HK) +3.550 (+3.880%) Short selling $115.39M; Ratio 21.579% grew 45% YoY and 50% YoY respectively, while TENCENT (00700.HK) +13.400 (+3.095%) Short selling $332.45M; Ratio 6.799% also saw healthy cloud business growth driven by AI demand. Overall e-commerce remained soft, with only signs of stabilization in certain segments. Gaming remained resilient and was largely unaffected by macroeconomic headwinds. Travel demand weakened, but the outlook for 2H26 has improved compared with earlier concerns. The broker maintained its "Market Weight" rating on the sector, with Buy calls on BABA-W (09988.HK) +3.100 (+2.884%) Short selling $660.59M; Ratio 14.335% , TRIP.COM-S (09961.HK) +0.400 (+0.123%) Short selling $254.02M; Ratio 48.706% , NTES (09999.HK) +5.800 (+3.169%) Short selling $123.68M; Ratio 25.966% and Z.AI (02513.HK) -15.000 (-1.354%) Short selling $924.73M; Ratio 28.031% .

The broker said e-commerce remained weak and could improve QoQ in 3Q26, though it stayed cautious. In 2Q26, core e-commerce/monetization revenue of BABA-W (09988.HK) +3.100 (+2.884%) Short selling $660.59M; Ratio 14.335% , JD-SW (09618.HK) +4.000 (+3.742%) Short selling $122.49M; Ratio 32.246% , PDD Holdings Inc. (PDD.US) and KUAISHOU-W (01024.HK) +1.120 (+3.419%) Short selling $121.48M; Ratio 11.580% changed by +1%, -4.7%, +3.5% and +4.4% YoY respectively. Their adjusted net profit under non-GAAP/non-IFRS changed by -38%, +21%, -13% and -30% YoY respectively. In gaming, TENCENT (00700.HK) +13.400 (+3.095%) Short selling $332.45M; Ratio 6.799% 's online gaming revenue rose 8% YoY, while NTES (09999.HK) +5.800 (+3.169%) Short selling $123.68M; Ratio 25.966% 's online gaming revenue increased 10% YoY, with gross margin expanding to 76.1%. In AI cloud, BABA-W (09988.HK) +3.100 (+2.884%) Short selling $660.59M; Ratio 14.335% 's AI cloud and computing power revenue for the first fiscal quarter ended June rose 45% YoY, while BIDU-W (09888.HK) +3.550 (+3.880%) Short selling $115.39M; Ratio 21.579% 's AI cloud infrastructure revenue increased 50% YoY to RMB7.3 billion. Management expects growth to accelerate further in 3Q26.

In online travel, TONGCHENGTRAVEL (00780.HK) +0.390 (+3.467%) Short selling $15.61M; Ratio 10.618% 's 2Q26 revenue/core OTA revenue rose 6.8% and 8.4% YoY respectively, while adjusted net profit increased 9.8% YoY. TRIP.COM-S (09961.HK) +0.400 (+0.123%) Short selling $254.02M; Ratio 48.706% has yet to announce its 2Q26 results, but the broker remained positive on its medium-term outbound travel exposure. The broker maintained Buy ratings on BABA-W (09988.HK) +3.100 (+2.884%) Short selling $660.59M; Ratio 14.335% , TENCENT (00700.HK) +13.400 (+3.095%) Short selling $332.45M; Ratio 6.799% , TRIP.COM-S (09961.HK) +0.400 (+0.123%) Short selling $254.02M; Ratio 48.706% , NTES (09999.HK) +5.800 (+3.169%) Short selling $123.68M; Ratio 25.966% and Z.AI (02513.HK) -15.000 (-1.354%) Short selling $924.73M; Ratio 28.031% , with target prices of HKD188, HKD608, HKD508, HKD252 and HKD1,830 respectively. (da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-09-04 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)