Summary of Key Points Core Viewpoint - On April 25, the Hang Seng Index rose by 0.32%, with southbound funds recording a total transaction amount of HKD 861.88 billion, resulting in a net sell of HKD 70.19 billion [1]. Southbound Fund Transactions - The total transaction amount for southbound funds was HKD 861.88 billion, with buy transactions at HKD 395.84 billion and sell transactions at HKD 466.03 billion, leading to a net sell of HKD 70.19 billion [1]. - The breakdown of transactions showed that the Hong Kong Stock Connect (Shenzhen) had a total transaction amount of HKD 341.67 billion, with net selling of HKD 48.61 billion, while the Hong Kong Stock Connect (Shanghai) had a total transaction amount of HKD 520.21 billion, with net selling of HKD 21.59 billion [1]. Active Stocks - Tencent Holdings had the highest transaction amount among active stocks, totaling HKD 53.89 billion, followed by Xiaomi Group-W at HKD 51.11 billion and Alibaba-W at HKD 47.94 billion [1]. - The stocks with the highest net buying included Meituan-W with a net buying amount of HKD 7.45 billion, followed by Sunac China with HKD 1.70 billion and Chifeng Jilong Gold Mining with HKD 22.19 million [1]. - Conversely, Tencent Holdings experienced the largest net selling at HKD 14.89 billion, while Alibaba-W and Pop Mart faced net selling of HKD 8.95 billion and HKD 6.52 billion, respectively [1]. Continuous Net Buying and Selling - Two stocks, Chifeng Jilong Gold Mining and Meituan-W, saw continuous net buying for 7 days and 3 days, respectively, with Meituan-W having the highest net buying amount of HKD 26.15 billion [2]. - Four stocks experienced continuous net selling, with Xiaomi Group-W, China Mobile, and Tencent Holdings leading in net selling amounts of HKD 48.57 billion, HKD 22.89 billion, and HKD 20.92 billion, respectively [2].

Group 1 - Southbound funds recorded a net sell of 70.19 billion HKD today [1] - Tencent Holdings faced the highest net sell at 14.89 billion HKD [1] - Alibaba-W also experienced significant net selling of 8.95 billion HKD [1] Group 2 - Meituan-W saw a net buy of 7.45 billion HKD [1]

Group 1 - Southbound funds experienced a significant net sell-off of 70.19 billion yuan today [1] - In the Hong Kong Stock Connect (Shanghai), Tencent Holdings and Alibaba-W saw net sell-offs of 9.12 million HKD and 7.22 million HKD respectively [1] - Meituan-W had the highest net buy amount at 4.68 million HKD in the Hong Kong Stock Connect (Shanghai) [1] Group 2 - In the Hong Kong Stock Connect (Shenzhen), Tencent Holdings and Pop Mart experienced net sell-offs of 5.77 million HKD and 5.06 million HKD respectively [1] - Meituan-W again led with the highest net buy amount at 2.77 million HKD in the Hong Kong Stock Connect (Shenzhen) [1]

Group 1 - Tencent Holdings saw a nearly 3% increase in stock price, closing at 484 HKD with a trading volume of 5.687 billion HKD [1] - CICC's report indicates that Tencent Games is expected to maintain a positive trend in 2025, with a projected 10% year-on-year revenue growth despite high revenue baselines from the previous year [1] - Tencent continues to focus on its flagship evergreen games, including "Honor of Kings," "Peacekeeper Elite," and various IPs like "League of Legends" and "CrossFire," demonstrating strong operational capabilities [1] Group 2 - The gaming industry is experiencing a significant shift towards AI integration, moving from auxiliary development tools to core gameplay design and interactive storytelling [2] - At the SPARK 2025 Tencent Games conference, "Peacekeeper Elite" announced advancements in AI technology, introducing AI teammates capable of real-time dialogue, marking a new case study for sustainable evolution of large models [2]

Group 1 - Hong Kong tech stocks saw a pre-market increase, with NetEase (09999.HK) and Bilibili (09626.HK) rising over 4% [1] - Alibaba (09988.HK) and Baidu (09888.HK) both increased by more than 2% [1] - Tencent Holdings (00700.HK) experienced a nearly 2% rise [1]

Group 1 - The report highlights the changes in institutional holdings for various companies in the first quarter of 2025, indicating a significant interest from fund managers [1] - Tencent Holdings saw an increase of 361 in the number of institutional holdings, with a market value of 72.55 billion, representing 1.72% of the circulating shares [1] - Contemporary Amperex Technology Co., Ltd. (宁德时代) had 191 new institutional holdings, with a market value of 57.92 billion, accounting for 5.87% of the circulating shares [1] Group 2 - Kweichow Moutai (贵州茅台) experienced 16 new institutional holdings, with a market value of 45.36 billion, which is 2.31% of the circulating shares [1] - Alibaba Group (阿里巴巴-W) had 431 new institutional holdings, with a market value of 36.40 billion, representing 1.62% of the circulating shares [1] - Midea Group (美的集团) recorded 71 new institutional holdings, with a market value of 34.58 billion, accounting for 6.39% of the circulating shares [1]

Core Insights - Tencent Holdings has officially released the 2.5 version of its Mix Yuan 3D generative model, significantly enhancing modeling precision and achieving ultra-high-definition geometric detail modeling [1] - The total parameter count of the Mix Yuan 3D model has increased from 1 billion to 10 billion, with the effective polygon count rising over tenfold [1] - The new version supports 4K high-definition textures and fine-grained bump mapping, improving the visual effects of surface textures [1] Group 1 - The effective geometric resolution has been upgraded to 1024, transitioning from standard definition to high definition [1] - The Mix Yuan 3D AI creation engine has been fully updated to the v2.5 model base, with the free generation quota doubled to 20 times per day [1] - The Mix Yuan 3D generation API has been officially launched on Tencent Cloud, available for enterprises and developers [1] Group 2 - The new version is the first in the industry to achieve multi-view input for generating PBR models, significantly enhancing the quality and realism of generated outputs [1] - The bone skinning system has been optimized to support automatic bone binding and weight assignment under non-standard poses, greatly improving 3D animation generation efficiency [1] - The 3D generation workflow features have been further upgraded, providing professional pipeline templates for intelligent decimation models and multi-view 3D models [1] Group 3 - Tencent Mix Yuan actively embraces the open-source ecosystem, with foundational models 1.0 and 2.0, as well as accelerated, multi-view, and lightweight models, all open-sourced [2] - The total number of stars on GitHub for Mix Yuan 3D has exceeded 12,000, continuously enriching the 3D AIGC community [2]

Group 1 - Southbound funds recorded a net purchase of 2.309 billion yuan today [1] - In the Hong Kong Stock Connect (Shanghai), Pop Mart and Alibaba-W received net purchases of 353 million HKD and 311 million HKD respectively [1] - Xiaomi Group-W had the highest net sell amount at 615 million HKD [1] Group 2 - In the Hong Kong Stock Connect (Shenzhen), Tencent Holdings and Alibaba-W received net purchases of 700 million HKD and 525 million HKD respectively [1] - The Yingfu Fund had the highest net sell amount at 1.4 billion HKD [1]

Group 1 - The core viewpoint of the report is that due to revenue growth in advertising and cloud computing, the company has raised its revenue forecasts for 2025 and 2026 by 1% and 2% respectively, maintaining its "outperform" rating [1] - The target price has been increased by 8.5% to HKD 600, corresponding to a projected Non-IFRS P/E ratio of 20.6 times for this year [1] - In the gaming sector, the company reported a 20% year-on-year increase in gaming revenue for the last quarter, reaching RMB 49.2 billion, exceeding expectations by 3% [1] Group 2 - The company is pursuing a multi-model strategy for its AI layout, combining self-developed models with external open-source models to enhance consumer products [2] - For 2024, the company plans to invest RMB 76.8 billion in capital expenditures, with guidance for 2025 indicating a low double-digit percentage of revenue for capital expenditures [2] - The company announced a 32% increase in annual dividends for 2025 to HKD 41 billion and plans to repurchase at least HKD 80 billion worth of shares [2]

Core Viewpoint - The report from CICC indicates that the valuation of domestic internet companies has seen some recovery this year due to the AI wave, but recent external tariff changes have led to a valuation pullback. Overall, the domestic internet sector remains in a reasonably low valuation range with a safety margin still present [1] Industry Overview - The online advertising market grew by 14% year-on-year in Q4, driven by e-commerce promotional activities and the gradual implementation of AI technology in ad material generation and efficiency optimization [2] - The Chinese gaming market saw a 16% year-on-year growth in Q4, with a seasonal decline of 5% quarter-on-quarter, while Tencent's older games performed well during the Spring Festival [2] - BOSS Zhipin-W reported a 15% year-on-year revenue growth in Q4, with a historical high in daily active users, and AI technology is enhancing matching efficiency and review effectiveness in the recruitment sector [2] AI Impact on Internet Industry - Domestic internet companies have reached near-international advanced levels in model capabilities, optimizing iteration strategies through self-developed and open-source models [3] - AI Agents are becoming a significant development direction, with companies like ByteDance and Tencent building intelligent ecosystems and rapidly growing user bases for dialogue robots [3] - AI is empowering productivity tools and cloud computing services, with products like Meitu Design Studio and Kuaishou-W achieving commercial breakthroughs, driving revenue growth through deep integration of cloud computing and AI [3] - AI is enhancing existing businesses, particularly in advertising and gaming, with companies like Tencent, Kuaishou, and Baidu integrating AI to improve ad targeting and game development efficiency [3] - Domestic internet companies are entering an AI investment cycle, significantly increasing capital expenditures focused on reasoning capabilities, which is expected to drive future commercial growth [3] 2025 Outlook - CICC recommends Tencent as a core investment due to its strong gaming business, organic growth in advertising through video accounts, and a recovering payment business, with a low valuation and strong shareholder return capability [4] - Kuaishou is highlighted for its high profit growth certainty in 2025, with overseas profitability and domestic growth, alongside improved profit margins and a stabilizing e-commerce market [4] - Keling is recognized as a leading global video generation model with mature application scenarios and commercialization models, expected to show strong growth potential [4] - NetEase-S is suggested for long-term attention due to its historically low valuation and long-term content innovation capabilities in the gaming sector [4]