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<Research>JPM: Improved Capital Mkt, Financial Outlook for CN Internet Hint Shr Rally; 6-12Mth Top Picks in Pecking Order Tencent, PDD, TME, Ctrip, NetEase, Meituan
Recommend 21 Positive 35 Negative 18 |
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JP Morgan released a research report, saying that there has been a systemic valuation multiple de-rating in China's Internet sector since 2Q23, as the reopening effect of the epidemic began to subside. The broker attributed the sector-wide downgrade to net capital outflows from the sector due to China's weakening macro outlook following the reopening of the economy. However, the systemic valuation multiple de-rating may have come to an end in 1Q24, possibly indicating that net capital outflows have stabilized, and that a new normal in capital market conditions has begun, where a positive correlation between share price movement and earnings revisions will be re-set. JP Morgan was more optimistic about the 6- to 12-month outlook for China's Internet share price and expected investors to regain confidence in the sector's 1- to 2-year earnings outlook. The broker said its 6-12 month top picks were TENCENT (00700.HK), Pinduoduo (PDD.US), Tencent Music (TME.US), Ctrip (TCOM.US), NetEase (NTES.US) and MEITUAN-W (03690.HK). AAStocks Financial News |
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