Spinee wrote a post · Dec 11, 2023 16:26

M Stanley Expects CN Dotcoms to be Curbed by Weak Macro in 2024; Top Pick PDD; NetEase, Tencent, New Oriental, Tencent Music, Baidu Favored

Morgan Stanley's Report Highlights:
Chinese tech and internet stocks slightly outperformed the broader mainland market this year.
Individual stock performance varies.
Next year's performance expected to be dominated by non-market risks due to weak macro factors.

Morgan Stanley's Bullish Picks:
- Top Pick: Pinduoduo ( $PDD Holdings (PDD.US)$ ) is highly recommended, showcasing unique growth opportunities in both local and overseas markets.
Other Overweight-Rated Stocks:
- $BABA-W (09988.HK)$ , $MEITUAN-W (03690.HK)$ , $JD-SW (09618.HK)$ , and $BILIBILI-W (09626.HK)$ are all rated Overweight, indicating positive prospects according to Morgan Stanley.

Rationale for Top Picks:
- Pinduoduo (PDD): Identified as the top pick due to its exceptional growth potential in local and international markets.

Resilient Sectors:
- Game and Music Content Providers: Resilience observed in companies like $NTES-S (09999.HK)$ , $TENCENT (00700.HK)$ , and $TME-SW (01698.HK)$ despite market fluctuations.

Specific Opportunities and Focus Areas:
- Unique Growth Opportunities: Attention directed towards PDD for its distinctive growth potential.
- Education Stocks: Notable interest in education stocks like $NEW ORIENTAL-S (09901.HK)$ and $TAL Education (TAL.US)$ .

AI Adoption and Positive Outlook:
- $BIDU-SW (09888.HK)$ : Despite gradual AI adoption, Morgan Stanley maintains a constructive outlook on Baidu.

Market Growth Forecasts for Highlighted Stocks (Next Year):
- PDD: Expected to benefit from unique growth prospects.
- Others (Alibaba, MEITUAN-W, JD, Bilibili): Rated Overweight, suggesting positive expectations.

Overall Industry Outlook (Next Year):
- Dot-Com Sector: Anticipated revenue growth of 10%, operating profit growth of 23%, and a 40 bps improvement in return on equity to 17.5%.

$KraneShares CSI China Internet ETF (KWEB.US)$ $Baidu (BIDU.US)$ $NetEase (NTES.US)$ $Tencent (TCEHY.US)$ $Alibaba (BABA.US)$ $Bilibili (BILI.US)$ $Pinduoduo Concept (LIST0724.SH)$ $Meituan ADR (MPNGY.US)$ $JD.com (JD.US)$

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