🎁Tencent and Alibaba's earnings have been released, and PDD Holdings, Kuaishou, and Meituan are next. Will the market cast a vote of confidence?

Last week,$TENCENT (00700.HK)$and$BABA-W (09988.HK)$After the two giants delivered seemingly impressive results,their share prices plunged, wiping out $66 billion in market value in a single day.This blow hit not only the two companies but also sent a chill through the entire Chinese tech sector.

This week, the earnings season spotlight shifts to three more key players: Kuaishou and PDD Holdings will release their results on March 25, followed by Meituan on the 26th.They will face investor scrutiny at an extremely sensitive time:The valuation of Hong Kong's technology sector has retreated to historical lows,meaning any minor fluctuations could be amplified by the market.

And this sensitivity has already shown initial signs in the recent market trends. On March 16, AI concepts like OpenClaw 'Lobster' once pushed$Hang Seng TECH Index (800700.HK)$above the 5100-point mark, but in the following few trading days, it fell into narrow range fluctuations. Although there was a rebound, trading volume failed to expand, showing insufficient momentum. This entangled state of wanting to rise but hesitating precisely confirms a deeper consensus:The underlying logic of the internet industry is undergoing profound changes.

Kuaishou, PDD Holdings, and Meituan, though in different sectors, now stand in the same stormy sea. The era of savage growth and burning cash for scale has come to an end, and all three are under pressure from the reconstruction of their valuation systems,shifting from enjoying high growth premiums in the past to now being measured by the market with a harsher yardstick on profitability and cash flow. Challenges from the macro consumption environment, normalization of regulatory policies, and fierce competition in a saturated market are unavoidable shared issues for them.

More crucially! They are all striving to find their second growth curve: Kuaishou is betting on AI and overseas expansion, PDD Holdings is expanding Temu, and Meituan is exploring new businesses.However, these ambitious investments are unlikely to translate into profits in the short term, causing the market to oscillate between anticipation and skepticism.

Although the challenges are similar, a deeper analysis reveals thatthe situations and narrative logic of the three are completely different, which also suggests they may face contrasting fates in this round of earnings tests.

🔎Kuaishou

$KUAISHOU-W (01024.HK)$'s story now revolves around 'hope and valuation'.Despite the current share price retreating from its higher levels, the core narrative has shifted from being just a short-video platform to an 'AI rising star.' The rapid development of Kuaishou’s AI business, particularly explosive overseas revenue growth—reaching $20 million in monthly revenue by December 2025 with an annualized run rate of $240 million—has opened up significant new potential for the company.

In its research report, UBS Group optimistically projected that Kuaishou's AI revenue could reach RMB 2.3 billion in 2026, raising its target price to HKD 108. JPMorgan described it as 'one of the cheapest AI stocks globally,' expecting 20% profit growth in 2026, assigning a target price of HKD 89 and a 'buy' rating.

This leads the market to both worry about its domestic traffic plateau while still granting some optimism regarding its AI monetization potential.Of course, challenges lie ahead,including the sustainability of the commercialization path—whether it can convert its technological advantages into stable subscription and API service revenues rather than relying solely on one-off hit applications.

For this earnings release, the market will focus on several forward-looking indicators: quarter-over-quarter revenue growth of the AI business, growth in paying users, progress in overseas market expansion, and the efficiency ratio of AI R&D investment to output.

🔎PDD Holdings

$PDD Holdings (PDD.US)$has taken a very different path.It has chosen to proactively slow its growth rate,using the '100 Billion Support' plan to reconstruct the supply chain ecosystem,which is particularly unique in the current market environment. While other tech companies are still striving to maintain growth figures,PDD Holdings’ management repeatedly emphasizes that short-term profits will fluctuate, urging everyone not to expect too much,this 'against-the-trend' stance gives it certain defensive attributes amid weak market sentiment.

Growth on its domestic main platform has slowed significantly, but its massive cash reserves and extreme cost control also provide a safety net for its stock price after significant declines. The market has assigned it a forward PE ratio of only about 8.9x, or just 5.4x excluding cash, which is among the lowest for major tech giants.

Meanwhile, the market's focus has shifted more towards Temu.After navigating through trade policy volatility earlier this year, Temu stabilized by swiftly transitioning from a 'fully managed' to a 'semi-managed' model,UBS Group analysts pointed out that this transformation effectively reduced the impact of tariffs on the final selling price from 54% to 13-18%. Temu is expected to achieve quarterly breakeven by the end of 2026.However, JPMorgan's stance is more cautious, believing that Temu’s profitability will not see significant improvement next year, and growth in online marketing services will also struggle to show meaningful progress over the next one to two quarters. Thus, they maintained a 'Neutral' rating.

For PDD Holdings, the core suspense of these earnings lies in when high-growth Temu can achieve breakeven and whether the domestic business can stabilize its foundation.

🔎Meituan

In comparison,$MEITUAN-W (03690.HK)$The situation is most severe. A dramatic reversal in fundamentals—from a profit of 35.8 billion yuan to an expected loss exceeding 23 billion yuan—has caught investors off guard.Alibaba’s declaration of 'no profitability assessment for three years' in the local life services sector, along with ByteDance’s aggressive entry, has plunged food delivery and in-store services into fierce 'internecine' competition. The stock price has dropped more than 60% from its peak, with market capitalization falling below 500 billion Hong Kong dollars. Even continuous buying from southbound funds has failed to reverse the decline.

Nevertheless, there are some glimmers of hope amid the harsh winter.

CICC observed that competition intensity in the food delivery industry declined somewhat in the fourth quarter of last year.User subsidies, though still at a high level, have narrowed quarter-over-quarter, and per-order losses in food delivery are expected to improve compared to Q3.Citi also noted that under the influence of regulatory scrutiny and seasonal off-peak effects, platform subsidy strategies are becoming more nuanced—though not completely withdrawn—which could help drive a modest recovery in unit economics.

The market's expectations for Meituan have shifted from growth to survival, with the focus on when this war of attrition will see an end.Will there be any signs of improvement in the unit economics (UE) model? How will management outline the path to stopping the bleeding by 2026?

Three narratives are about to directly collide with market sentiment!

Whose story would you place your trust in?

[Prize Activity]

🏆 Event One: Big Rally Competition

Choose the stock you think will have the highest increase on the first day after earnings release. Fellow investors who predict correctly will share the rewards.30,000 points!

🏆 Activity Two: Speak Your Mind

Kuaishou VS PDD Holdings VS Meituan!Do you believe more in Kuaishou’s valuation potential under the AI narrative, are optimistic about PDD Holdings reversing after being extremely undervalued, or think Meituan has hit rock bottom and all negative factors are priced in?

Share your insights in the comment section—write over 30 words with sound reasoning to earn 66 points!

Note: Both Event One and Event Two will conclude at 15:00 Beijing Time on March 26; if all three stocks close lower on the first day post-earnings in Event One, all voting fellow investors will share the points equally. Rewards from both events can stack, and rewards will be distributed uniformly after this earnings season ends.

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Ask Futubull AI: What key variables should we focus on in Kuaishou’s accelerated commercialization of its AI model, PDD Holdings’ Temu push for breakeven, and Meituan’s deep involvement in subsidy wars?

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