[ET Net News Agency, 21 May 2025] The atmosphere in the US stock market is one of caution, while Hong Kong stocks continue to perform well today. The Hang Seng Index briefly reached 23,884 points, hitting a new high since 24 March. In the first half of the day, it rose by 125 points (0.5%) to 23,807, with the main board turnover nearing HKD 119.3 billion. The Hang Seng China Enterprises Index stood at 8,647, up 58 points (0.7%). The Hang Seng Tech Index reported 5,338, an increase of 22 points (0.4%).
"Central government support policies ahead, making a significant drop in the Hang Seng Index unlikely in the short term"
US stocks saw a slight pullback overnight, but Hong Kong stocks maintained yesterday's upward momentum, opening higher by several dozen points this morning. The index gained momentum early on, rising nearly 200 points to a high of 23,878, the highest since the tariff war began. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the recent reduction in the LPR (Loan Prime Rate) in China boosted market sentiment. Additionally, the National Development and Reform Commission indicated that it would accelerate the introduction of measures to stabilise employment and the economy, promoting high-quality development, with most policies expected to be implemented by the end of June, providing further upward momentum for the market. Cheung Chi Wai believes that with just about a month until the end of June, the market is optimistic about the favourable policies, making a significant short-term drop in the Hang Seng Index unlikely. The trend is expected to show large gains with minor pullbacks, with a potential test of the resistance at 24,106. He anticipates that even if the index corrects, it will find support around the 8 May low of 22,600.
"Bilibili turns a profit in the first quarter, with mobile games as a highlight"
Bilibili (09626) announced a profit in the first quarter of this year, reporting an adjusted net profit of RMB 363 million, compared to an adjusted net loss of RMB 440 million in the same period last year. The net loss narrowed significantly to RMB 9.1 million from RMB 750 million a year ago. Total net revenue reached RMB 7.003 billion, a year-on-year increase of 24%. Of this, advertising revenue was RMB 1.998 billion, up 20% year-on-year, while mobile game revenue rose 76% to RMB 1.731 billion.
Cheung Chi Wai noted that Bilibili's overall performance was good, especially the strong showing of mobile games in the first quarter. According to data released by the group last year, mobile games accounted for about 20% of total revenue, which has now increased to approximately 24% in the first quarter. Cheung Chi Wai mentioned that the group plans to launch a traditional Chinese version of "Romance of the Three Kingdoms" in the second half of the year, further expanding into the Hong Kong, Macao, Taiwan, and overseas Chinese markets, creating new growth points for the company. As mobile game revenue growth outpaces other segments like advertising, its share of total revenue is expected to continue rising.
Following the earnings announcement, major brokerages gave positive ratings, with Daiwa and Jefferies both raising their price targets. However, Bilibili's stock price rose moderately this morning. Cheung Chi Wai pointed out that Bilibili's stock peaked at HKD 190.8 in March due to expectations of strong first-quarter results. Now that the results are out, the market has largely digested the positive news of turning profitable, and investors are comparing Bilibili to other companies with significant gaming revenue. Bilibili's projected P/E ratio is around 70 times, which may improve with sustained high growth. However, compared to Tencent (00700) and NetEase (09999), which also have substantial gaming revenue, Bilibili's stock price seems somewhat expensive. Currently, Tencent's projected P/E ratio is around 20 times, while NetEase's is even lower at about 16 times. Therefore, Bilibili's attractiveness to investors is relatively low.
"Central government support policies ahead, making a significant drop in the Hang Seng Index unlikely in the short term"
US stocks saw a slight pullback overnight, but Hong Kong stocks maintained yesterday's upward momentum, opening higher by several dozen points this morning. The index gained momentum early on, rising nearly 200 points to a high of 23,878, the highest since the tariff war began. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the recent reduction in the LPR (Loan Prime Rate) in China boosted market sentiment. Additionally, the National Development and Reform Commission indicated that it would accelerate the introduction of measures to stabilise employment and the economy, promoting high-quality development, with most policies expected to be implemented by the end of June, providing further upward momentum for the market. Cheung Chi Wai believes that with just about a month until the end of June, the market is optimistic about the favourable policies, making a significant short-term drop in the Hang Seng Index unlikely. The trend is expected to show large gains with minor pullbacks, with a potential test of the resistance at 24,106. He anticipates that even if the index corrects, it will find support around the 8 May low of 22,600.
"Bilibili turns a profit in the first quarter, with mobile games as a highlight"
Bilibili (09626) announced a profit in the first quarter of this year, reporting an adjusted net profit of RMB 363 million, compared to an adjusted net loss of RMB 440 million in the same period last year. The net loss narrowed significantly to RMB 9.1 million from RMB 750 million a year ago. Total net revenue reached RMB 7.003 billion, a year-on-year increase of 24%. Of this, advertising revenue was RMB 1.998 billion, up 20% year-on-year, while mobile game revenue rose 76% to RMB 1.731 billion.
Cheung Chi Wai noted that Bilibili's overall performance was good, especially the strong showing of mobile games in the first quarter. According to data released by the group last year, mobile games accounted for about 20% of total revenue, which has now increased to approximately 24% in the first quarter. Cheung Chi Wai mentioned that the group plans to launch a traditional Chinese version of "Romance of the Three Kingdoms" in the second half of the year, further expanding into the Hong Kong, Macao, Taiwan, and overseas Chinese markets, creating new growth points for the company. As mobile game revenue growth outpaces other segments like advertising, its share of total revenue is expected to continue rising.
Following the earnings announcement, major brokerages gave positive ratings, with Daiwa and Jefferies both raising their price targets. However, Bilibili's stock price rose moderately this morning. Cheung Chi Wai pointed out that Bilibili's stock peaked at HKD 190.8 in March due to expectations of strong first-quarter results. Now that the results are out, the market has largely digested the positive news of turning profitable, and investors are comparing Bilibili to other companies with significant gaming revenue. Bilibili's projected P/E ratio is around 70 times, which may improve with sustained high growth. However, compared to Tencent (00700) and NetEase (09999), which also have substantial gaming revenue, Bilibili's stock price seems somewhat expensive. Currently, Tencent's projected P/E ratio is around 20 times, while NetEase's is even lower at about 16 times. Therefore, Bilibili's attractiveness to investors is relatively low.