[ET Net News Agency, 22 November 2024] In the early stage, the Hong Kong stock market
showed a narrow and soft trend. However, later on, Li Yunze, Director of the National
Financial Regulatory Administration, stated at the seventh member conference of the China
Insurance Industry Association that the insurance industry must effectively transform its
development model. Domestic insurance stocks leading the decline. The Hang Seng Index
reported 19,343 at midday, down 257 points or 1.3%, with the main board turnover exceeding
HKD 79.6 billion. The Hang Seng China Enterprises Index reported 6,935, down 98 points or
1.4%. The Hang Seng Tech Index reported 4,306, down 51 points or 1.2%.

"Jaseper Tsang: expects over 6 trillion yuan market support measures at two major December
meetings"

The Hang Seng Index has been stagnant recently, with a slight increase at the opening
today but later trading narrowly. The fluctuation range is about 200 points. Jaseper
Tsang, the investment director of Rafter Capital, told ET Net News Agency that the market
is anticipating the outcomes of the Central Political Bureau meeting and the Central
Economic Work Conference scheduled in Mainland China in December. It is expected that
market support measures ranging from 6 trillion to 10 trillion yuan will be introduced,
mainly focusing on clearing existing housing inventories, land digestion, and possibly
some funds being directed towards consumption. On the other hand, there are concerns in
the market regarding the policies that may be implemented by Trump after taking office in
January next year, which could be unfavourable to the Chinese economy and trade.
Therefore, the market is currently more conservative.
He specifically pointed out that although the recent market support measures introduced
by the central government were not as anticipated by the market, there hasn't been a
significant increase in short selling, indicating that there are expectations for the two
major conferences in December. Jaseper Tsang expects the short-term Hang Seng Index to
fluctuate between 19,200 and 20,000 points, as it has recently tested the 19,300 level,
with a chance of dropping to 19,200 points in the short term.

"Baidu AI and autonomous driving have clear advantages but realization requires time"

Baidu (09888) reported a third-quarter net profit of 7.632 billion yuan as of the end of
September, a 14% year-on-year increase; non-generally accepted accounting principles net
profit was 5.886 billion yuan, a 19% year-on-year decrease, meeting expectations; adjusted
EBITDA was 8.733 billion yuan, an 8% year-on-year decrease, below expectations. The
overall performance meets expectations but still disappoints the market, with its U.S.
stock falling by 5.90% to USD 81.63 the previous night; trading lower by over 5% in the
morning today, dropping by more than 10% at one point to a low of USD 75.20, marking a new
low since December 2022.
Baidu's co-founder and CEO Robin Li mentioned in the earnings report that Baidu's core
revenue remained flat in the third quarter, reflecting continued weakness in online
marketing business but offset by growth in its intelligent cloud business. Despite facing
short-term pressures, the company remains committed to an AI-centric strategy and is
confident in long-term development trends.
Jaseper Tsang stated that the main reason for the decline in Baidu's net profit is the
company's commitment to developing AI. The monetization of AI requires a significant
amount of time and financial investment, and may face certain obstacles during the
monetization process. Therefore, Baidu's future profitability is weaker compared to other
internet companies. He further pointed out that both the growth rate of Apollo Go and
AI-related revenue are below market expectations, so Baidu's stock price is likely to be
affected post-earnings.
In the third quarter, Baidu's autonomous driving service Apollo Go provided 988,000
automatic driving orders, a 20% year-on-year increase. As of 28 October this year, Apollo
has provided over 8 million automatic driving service orders to the public. In the third
quarter, Apollo Go's fully unmanned driving order volume accounted for over 70% of the
national total order volume. In October, the proportion of fully unmanned driving orders
further increased to 80%.
Jaseper Tsang believes that Baidu's two major advantages, AI and intelligent driving
cars, have promising development prospects, but achieving commercialization and reaching
the high growth rate and high monetization capability of the early e-commerce period will
take a long time in the entire AI industry. Additionally, Baidu's intelligent vehicles
have established a certain industry moat domestically, possessing strong competitive
advantages, but they also face monetization issues.
He stated that he is optimistic about Baidu's future and recommends investors who view
Baidu as a long-term investment to gradually accumulate shares. The first batch can be
purchased below HKD 75, with a second batch around the technical low of HKD 73 in October
2022. However, in terms of short-term speculation, Jaseper Tsang is not optimistic about
Baidu, believing that the chances of a rebound are small and there is no stimulating news
in the short term.