G Sachs: CN Internet Magnates' 2Q Earnings Preview Focuses on Cloud Growth and AI Capex; MEITUAN-W TP Raised
I'm LongbridgeAI, I can summarize articles.Goldman Sachs previewed Q2 earnings for major Chinese internet firms, highlighting cloud growth and AI capex. It raised Meituan's target price to HKD123 with a Buy rating, forecasting strong profit growth due to reduced competition. Forecasts include 9% revenue growth for Tencent and Alibaba, while JD.com expects a surge in adjusted EBIT despite revenue decline. PDD Holdings anticipates an EBIT drop. The broker prefers cloud/data centers over gaming and e-commerce.
Goldman Sachs published a report on China's internet, previewing the upcoming 2Q results of major internet companies. The broker foresaw key themes to include cloud growth as a highlight, upward revisions to full-year capex, an inflection point in transaction platform profit, and increasing market focus on SOTP valuation. The broker raised its TP for MEITUAN-W (03690.HK) +0.550 (+0.597%) Short selling $655.36M; Ratio 25.102% from HKD116 to HKD123 and maintained a Buy rating.
Goldman Sachs anticipated TENCENT (00700.HK) -0.400 (-0.084%) Short selling $603.12M; Ratio 7.729% to announce results on August 12, forecasting 2Q revenue growth of 9% YoY and adjusted EBIT growth of 9% YoY to RMB75.2 billion. Key focuses include AI capex and resource allocation priorities, Hunyuan model strategy, WorkBuddy and WeChat Agent metrics, gaming pipeline, and upside from AI-driven advertising.
BABA-W (09988.HK) +2.600 (+2.100%) Short selling $732.96M; Ratio 10.201% will announce 1FQ results on August 20. The broker forecast 2Q revenue growth of 9% YoY, while adjusted EBITA was expected to fall 33% YoY to RMB26 billion. Key focuses include funding sources for AI capex, margin upside for AI cloud/GPUaaS over the coming quarters, Qwen strategy, e-commerce cash flow, and talent retention. The broker expected Alibaba Cloud growth to accelerate to 45%, and estimated quick commerce investment in 2Q at around RMB10 billion.
For MEITUAN-W (03690.HK) +0.550 (+0.597%) Short selling $655.36M; Ratio 25.102% , Goldman Sachs raised its adjusted net profit forecasts for 2026-28, mainly reflecting reduced competition intensity in food delivery. The broker estimated 2Q revenue growth of 10% YoY and adjusted EBIT growth of 56% YoY to RMB5.8 billion.
The broker predicted JD-SW (09618.HK) +2.300 (+1.804%) Short selling $119.07M; Ratio 17.921% 2Q revenue to decline 3% YoY, while adjusted EBIT was forecast to surge 587% YoY to RMB6.2 billion. JD Retail profit was estimated at RMB13.5 billion with a margin of 4.6%. Key focuses include JD Retail growth prospects, shareholder return policy, Joybuy international expansion, and AI applications.
For PDD Holdings Inc. (PDD.US) , the broker forecast 2Q revenue growth of 8% YoY, and adjusted EBIT to sink 4% YoY to RMB26.7 billion. Key focuses include Temu's GMV and profitability, drivers of core platform GMV growth, community group-buying strategy, and AI advertising technology applications.
The broker's sub-sector preferences, in pecking order, are cloud and data centers (including GDS Holdings Limited (GDS.US) , VNET Group, Inc. (VNET.US) , Alibaba, and Kingsoft Cloud Holdings Limited (KC.US) ), followed by gaming and entertainment, e-commerce and mobility, and AI models.
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