Review of Q1 2025 data for Chinese concept stocks

The financial results of China's leading concept stocks for Q1 2025 have all been disclosed. Here is a summary of the data for ten of these leading Chinese concept companies:

Tencent Holdings, Alibaba, JD.com, Pinduoduo, Meituan, Baidu, Kuaishou, NetEase, KE Holdings, and Bilibili.

Although not strictly the TOP10, these ten companies' combined revenue and net profit likely account for at least 70%~80% of the overall Chinese concept stocks, broadly reflecting the overall trend.

[Data Overview]

Note: The table shows aggregated data for the ten Chinese concept companies mentioned above.

1) From a performance data perspective, compared to the overall A-share market, Chinese concept stocks, as representatives of China's top private enterprises, still perform significantly better:

Q1 2025: Overall A-shares vs. Chinese Concept Stocks

Revenue growth: -0.15% vs. 12.36%;

Net profit growth: 4.72% vs. 13.46%;

Gross margin: 17.82% vs. 37.59%;

The data speaks for itself.

2) For these ten Chinese concept stocks, I used to categorize them into two groups: Pinduoduo and the other nine (excluding Pinduoduo).

This is because previously, Pinduoduo's performance was too outstanding, far exceeding the average of Chinese concept stocks, which could distort the aggregated data.

However, currently, the situation is the opposite. Especially in Q1 2025, Pinduoduo was the only Chinese concept stock that significantly underperformed expectations, with negative profit growth, becoming a "drag" for the quarter.

Excluding Pinduoduo, the net profit growth of the remaining Chinese concept stocks was still 24.95%, significantly higher than the revenue growth of 12.36%, indicating that cost-cutting and efficiency improvements are still effective.

3) The growth rate of operating cash flow declined in the quarter, turning from positive (5.03% in Q4 2024) to negative (-3.75% in Q1 2025);

4) By segment:

Gaming performed the best, with Tencent and NetEase both showing improved gaming growth, consistent with the overall gaming market. Growth increased from 16.42% in Q4 2024 to 21.82% in Q1 2025;

Advertising was steady, with growth slightly increasing from 11.62% in Q4 2024 to 12.15% in Q1 2025;

E-commerce declined, with overall growth dropping from 16.03% in Q4 2024 to 10.47% in Q1 2025. This was mainly due to Pinduoduo's transaction commission growth plummeting from 33.31% to 5.85%, dragging down the sector, while Alibaba, JD.com, and Kuaishou's e-commerce growth all improved this quarter.

[Segment Data]

Operating Revenue

Revenue growth in Q1 2025 was 12.36%, slightly down from 12.77% in Q4 2024;

Operating Profit:

Operating profit growth in Q1 2025 was 16.76%, significantly lower than 44.13% in Q4 2024;

Non-IFRS Net Profit Attributable to Shareholders:

Non-IFRS net profit growth in Q1 2025 was 9.99%, a significant drop from 20.53% in Q4 2024;

Gross Margin:

Gross margin in Q1 2025 was 37.59%, slightly down from 38.31% in Q4 2024;

Cost & Expense Ratios:

In Q1 2025, the cost ratio slightly decreased from 63.03% to 62.41%, while the total expense ratio slightly increased from 20.70% to 21.14%.

The combined cost & expense ratio slightly decreased from 83.74% to 83.55%.

Operating Cash Flow:

Operating cash flow growth in Q1 2025 was -3.75%, turning negative from 5.03% in Q4 2024.

Advertising:

Advertising revenue growth in Q1 2025 was 12.15%, slightly up from 11.62% in Q4 2024.

E-commerce Commissions:

E-commerce commission growth in Q1 2025 was 10.47%, down from 16.03% in Q4 2024.

Gaming:

Gaming growth in Q1 2025 was 21.82%, up from 16.42% in Q4 2024.

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