Earnings Preview: Tencent, JD, Bilibili to Kick off Top China Tech Earnings Season
The new earnings season for US-listed and Hong Kong-listed China technology stocks officially begins this week.
Companies including $TENCENT (00700.HK)$ , $JD.com (JD.US)$/ $JD.com (JD.US)$ , $Bilibili (BILI.US)$ / $BILIBILI-W (09626.HK)$ , and $XIAOMI-W (01810.HK)$ are scheduled to release their latest quarterly financial reports successively.
During the third quarter of 2025, the Hong Kong stock market continued its strong performance. The $Hang Seng Index (800000.HK)$ gained over 11.5% cumulatively over the three months, while the tech-heavy $Hang Seng TECH Index (800700.HK)$ surged approximately 22%. However, since October, the Hong Kong market has experienced volatility, with the Tech Index retreating over 11% from its peak. As these tech companies report their earnings, the question arises: will this present another strategic investment opportunity?
I had compiled market expectations and performance forecasts for some popular China concept tech stocks for investors' reference:
Among them, $Tencent (TCEHY.US)$, JD.com, and Bilibili will be the first to report, all releasing their Q3 results this Thursday (November 13).
Current Market Expectations:
$TENCENT (00700.HK)$
Q3 revenue is widely projected to be RMB 1891.39 billion, a year-on-year increase of 13.13%.
Expected earnings per share are RMB 5.93, up 5.14% YoY.
MORGAN STANLEY previously forecast that Tencent's Q3 revenue and Non-IFRS operating profit would grow 13% and 18% YoY respectively, noting potential for upside in games and advertising, with continued margin expansion.
Value-Added Services revenue is expected to grow 13% YoY, driven primarily by games. Online games revenue is projected at RMB 609.99 billion, up 17.8% YoY.
Online advertising revenue is expected to grow 20% YoY, with AI technology being a key efficiency driver.
FinTech and Business Services revenue is expected to grow 10% YoY, with cloud business growth potentially accelerating.
The report highlights key focus areas including capital expenditure guidance, progress of the Hunyuan large language model, AI application deployment, and penetration INTO consumer-facing scenarios. Morgan Stanley revised down its 2025-2027 capex estimate for Tencent to RMB 320 billion, indicating a more conservative outlook than previous market expectations.
$JD.com (JD.US)$/ $JD.com (JD.US)$
Q3 revenue is expected to reach RMB 2938.32 billion, up 12.84% YoY.
Expected EPS is RMB 1.31, a significant decrease of 83% YoY.
Guosen Securities estimates JD.com's Q3 revenue grew 13% YoY, mainly driven by faster growth in JD Retail revenue due to national subsidy policies. JD Retail revenue is estimated to grow 11% YoY, partly due to a high base effect in electronics categories from last year's subsidy programs. The food delivery business also saw order volume growth compared to Q2.
JD.com's Q3 Non-GAAP net profit is estimated at RMB 4.145 billion, down 69% YoY, with the Non-GAAP net profit margin decreasing by 3.6 percentage points to 1.4%. While JD Retail's operating profit margin improved slightly by 0.3 ppts YoY, losses from the newly launched food delivery business continued to drag down overall profits, though unit economics showed sequential improvement due to reduced user subsidies and a stable proportion of regular meals.
$XIAOMI-W (01810.HK)$
Q3 revenue is expected to be RMB 1156.51 billion, surging 25.02% YoY.
Expected EPS is RMB 0.35, an increase of 64.48% YoY.
Morgan Stanley stated that Xiaomi's Q3 2025 performance would present a "one positive, two concerns" picture:
Positive: Benefiting from better-than-expected electric vehicle sales (over 40,000 units in September alone), this business is expected to reach breakeven a quarter earlier, becoming the core growth engine.
Concerns: 1) Smartphone margins are pressured by rising memory costs, leading to a downgrade of the 2026 gross margin forecast to 10.9% (from 12.4%). 2) AIoT business growth is slowing due to a high base effect, with 2025-2026 revenue forecasts lowered by 5% and 8% respectively.
Overall Sector Trends (per Goldman Sachs)
Goldman Sachs expects Q3 earnings for large-cap Chinese internet companies to be mixed, with aggregate industry profits declining for the second consecutive quarter, down 31% YoY in the September quarter. Common themes include increased AI capital expenditure, accelerating cloud revenue, peak investment in instant retail (with losses potentially persisting), and new investments in AI and international businesses impacting short-term margins for large caps.
Expanding Instant Retail Losses Drag Down Profits
The main reason for the Q3 profit decline is attributed to instant retail losses at $BABA-W (09988.HK)$/ $Alibaba (BABA.US)$ , $MEITUAN-W (03690.HK)$ , and $JD.com (JD.US)$. Instant retail losses for the quarter reportedly reached RMB 36 billion, RMB 20 billion, and RMB 13 billion respectively, worsening from Q2. Goldman Sachs believes achieving "absolute loss halving" in the short term is challenging, and losses are likely to persist into the first half of 2026, with a potential industry profit inflection point gradually emerging in 2026.
Significant Increase in AI Capital Expenditure
Goldman Sachs expects Alibaba and Tencent to be the main drivers of AI capex. Its capex forecast for Alibaba for FY2026-28 is RMB 460 billion (above the company's original target of RMB 380 billion), among the highest market expectations.
Tech Breakthroughs: Tencent's AI Lab launched the Continuous Autoregressive Language Model (CALM), reducing training and inference computational costs by 44% and 33% respectively. Alibaba CEO Eddie Wu stated plans to increase investment in ultra-large-scale AI infrastructure to support full-stack AI cloud products.
Accelerating Cloud Revenue Growth
Q3 revenue growth for Chinese cloud hyper-scalers accelerated sequentially. Alibaba Cloud revenue grew 31% YoY (vs. 26% in Q2). Goldman Sachs estimates combined cloud revenue for Alibaba, Tencent, $Baidu (BIDU.US)$/ $BIDU-SW (09888.HK)$, and $Kingsoft Cloud (KC.US)$ / $KINGSOFT CLOUD (03896.HK)$ grew 27% YoY in Q3. US peers (AWS, Azure, etc.) saw cloud revenue grow 30% YoY, providing a growth reference for the Chinese cloud sector.
Commercialization Progress: ByteDance's daily AI token consumption exceeded 30 trillion in September (doubling from April-May and close to Google's 43 trillion). Alibaba Cloud's token consumption doubles every 2-3 months, indicating a continuous surge in AI inference demand.
As key bellwethers for the Hong Kong market, whether the earnings reports from Tencent, JD.com, Xiaomi, and Alibaba can boost current market confidence is a major focus! Major investment banks generally anticipate that, against the backdrop of AI industry development and the commencement of the US Federal Reserve's interest rate cut cycle, the Hong Kong stock market may continue its upward trend. In particular, Hong Kong-listed tech and growth stocks remain the most resilient segment. Founder Securities believes the Hong Kong stock rally is not over yet; after the recent adjustment, it presents another strategic opportunity, recommending continued attention to the catch-up potential of undervalued stocks represented by the Hang Seng Tech Index.
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