[ET Net News Agency, 21 February 2025] Concerns over US President Trump's new tariff
plans are creating uncertainty for the economy, leading to significant declines in the
three major US stock indices on Thursday. However, Chinese concept stocks are performing
strongly, with the Hang Seng Index opening over 500 points higher, surpassing the 23,000
mark immediately. The index closed at 23,238, up 661 points or 2.9%, reaching a three-year
high. The main board recorded a turnover of nearly HKD 209.4 billion. The Hang Seng China
Enterprises Index rose by 241 points or 2.9% to 8,564, while the Hang Seng Tech Index
increased by 257 points or 4.7% to 5,757.

"Lee Wai Kit: Alibaba's performance is expected to boost HK stocks"

US Treasury Secretary Scott Bessent plans to speak with Chinese Finance Minister Lan
Feng'an on Friday, urging China to rebalance its economic development. Meanwhile,
President Trump indicated that the likelihood of reaching a trade agreement with China is
high. Additionally, Alibaba (09988) reported strong quarterly results. The Hang Seng Index
broke through 23,000 at the open and continued to rise, surpassing the policy peak from
early October, reaching a high of 23,256, a near three-year high. Lee Wai Kit, a director
of the Brokerage Department of TF International Securities, told ET Net News Agency that
today's surge in the Hang Seng Index is primarily driven by Alibaba's strong performance,
which has led tech stocks upwards. He emphasised that Alibaba's AI and cloud-related
businesses are performing exceptionally well, enhancing its valuation and suggesting that
this upward momentum will continue to positively influence the Hang Seng Index, rather
than being a mere short-term reaction to earnings.
He noted that the market sentiment is generally optimistic, especially following
AI-related news, which has led to rising valuations for many tech stocks. Given that tech
stocks hold a significant weight in the Hang Seng Index, this provides sustained upward
momentum. He predicts that the Hang Seng Index has the potential to reach higher levels in
the first half of the year, such as 25,000 points, with short-term support seen at 22,500.

"Bilibili's long game lifecycle is expected to drive performance"

Bilibili (09626) reported a net profit of approximately RMB 89.96 million for the fourth
quarter ending 31 December, marking its first quarter of profitability under generally
accepted accounting principles, with earnings per share of RMB 0.22, compared to a loss of
approximately RMB 1.296 billion in the same period of 2023. Notably, the mobile gaming
business showed impressive performance, with revenues surging 79% to RMB 1.8 billion,
primarily due to the strong performance of the exclusive licensed game "Three Kingdoms:
Strategy to Win the World" launched last year.
For the full year, total net revenue was RMB 26.832 billion, an increase of 19%, with
gross profit reaching RMB 8.774 billion, up 61%, attributed to improved monetisation
efficiency and reduced platform operation costs. The operating loss narrowed to RMB 1.344
billion from a loss of RMB 5 billion in 2023.
Lee Wai Kit expressed a positive outlook for Bilibili, noting that the strong quarterly
data has created a favourable impression and forecasting continuous improvement in the
company's performance by 2025. He further pointed out that Bilibili excels in gaming, and
games like "Three Kingdoms: Strategy to Win the World" typically have long lifecycles,
which could continue to generate profits. However, as a newcomer in the mobile gaming
sector, Bilibili must remain vigilant against competition from industry leaders like
Tencent. Additionally, the future performance of the company's advertising business will
need to be considered in light of macroeconomic conditions.
Regarding stock performance, Lee Wai Kit believes the price is approaching a previous
peak of around RMB 178. If it successfully breaks through this level and the market
atmosphere remains favourable, there may be an opportunity to challenge the higher levels
seen in November last year, around RMB 191.