{Market Preview}NTES may continue to fall

  The Hang Seng Index closed at 17,573 in the morning session, down 67 points or 0.4%, with main board turnover of nearly HKD 41.7 billion. The Hang Seng China Enterprises Index was at 6,199, down 24 points or 0.4%. The Hang Seng Tech Index reported at 3,455, down 53 points or 1.5%.
  The three largest traded stocks in the Hang Seng Index were Tencent (00700), Ping An (02318) and Alibaba (09988); Tencent reported HKD 377.6, down HKD 0.2 or less than 0.1%, with a turnover of HKD 2.832 billion; Ping An reported HKD 35.55, up HKD 1.25 or 3.6%, with a turnover of HKD 1.481 billion; Alibaba reported HKD 81.95, up HKD 0.3 or 0.4%, with a turnover of HKD 1.466 billion. The three largest traded stocks on the Hang Seng China Enterprises Index are Tencent, Ping An and Alibaba. The three largest traded stocks on the Hang Seng Tech Index were Tencent, Alibaba and NTES (09999); NTES reported HKD 124.6, down HKD 18.4 or 12.9%, with a turnover of HKD 1.34 billion.

"Lee Wai Kit: the Hang Seng Index shows signs of rising and is still optimistic about holding steady at 17,300"

  The trend of Hong Kong stocks remained stagnant, hovering near the 50-day moving average for half a day. Lee Wai Kit, a director of the brokerage department at Huasheng Securities, told the ET Net News Agency that the recent market conditions have shown signs of steady upward trend. Although there are few daily changes, there has not been a sharp drop. The market is expected to be gaining momentum, but the strong wait-and-see atmosphere has caused a weak strength.
  He mentioned that the Hang Seng Index has formed a short-term upward channel since 5 August. If it maintains the current upward track extension support level of about 17,300, it will still have the opportunity to rise repeatedly. Investors can wait and see the Jackson Hole global central bank annual meeting and the performance of Chinese financial stocks to see whether it will drive the Hang Seng Index up.

"NTES may fall to HKD 113, 3A game development will take time"

  NTES (09999) and Blizzard collaborated again in April this year. The market expects the combination will drive NTES's performance. Unfortunately, NTES yesterday announced that its second-quarter adjusted net profit fell 13% year-on-year to RMB 7.8 billion, which was worse than market expectations. The second interim dividend also decreased by 17% year-on-year to USD 8.7 cents, dragging the stock price down by nearly 15% in half a day. Lee Wai Kit pointed out that the combination with Blizzard has increased the market's expectations for NTES, but this time it has obviously disappointed the market, causing a drop of more than 10% this morning.
  He believes that reuniting with Blizzard is theoretically beneficial to NTES, but this performance does not seem to reflect relevant expectations. He believes that the current stock price will face a major adjustment after falling below the support of the important horizontal zone of HKD 140. It is not recommended to buy it at the current price. It may fall to last year's low of about HKD 113 before it finds support, because only then can the market's views on this performance be fully reflected.
  Recently, Mainland China's first 3A game "Black Myth: Wukong" has swept the world, attracting market attention to related stocks and even the development of 3A games. Lee Wai Kit believes that NTES is backed by Blizzard, and its development of 3A games is also exciting. If popular game comes from NTES, it will also help to expand NTES's territory. However, it should be noted that 3A games require huge investment. It takes a long time to develop a game like "Black Myth: Wukong". Investors need to be patient while waiting for NTES to catch up.