英文【高盛】探索中国互联网：财报季之后的行动方向及关键关注点 辩论；TechNet总体要点

China Internet companies mostly reported solid 1Q top line and profit beats (see Exhibit 10), but with incremental conservative tones on 2Q profitability amid investments into platform ecosystems (merchants, consumers), food delivery subsidies (by eCommerce players), AI (applications and hyperscaler GPU depreciation) and overseas expansions. With the conclusion of China internet results season and our recent TechNet China Conference, key investor focuses/questions have centered around 1) food delivery competition & eCommerce players’ re-investments, given PDD’s 1Q profit miss on merchant support and JD’s substantial inroads into food delivery (from entrance to 20mn daily orders in three months). Key debates continue to be on duration and intensity of the current competition and risk/reward from here on different eventual scenarios. We lower our eCommerce sub-sector preference to #4 (from #3) on a more challenged near-term profit outlook but see most favorable upward risk-reward within eCommerce for JD (on a 12-month view), 2) AI application beneficiaries, where we see Tencent’s ads+games businesses as most directly benefiting from the application of AI in adtech/gaming experience, alongside Kuaishou’s Kling (text-to-video) with strong global progress. Meanwhile, there continue to be debates on the ultimate form of AI assistants — between super-apps (e.g., WeChat) vs. handset makers (e.g. Xiaomi), and 3) navigating implications from geopolitics/tariffs developments. We fine-tune our five over-arching themes for 2025 at this mid-year juncture incorporating TechNet takeaways (see Exhibit 1, on further rise in competition in transaction platforms, fall in eCommerce GMV/food delivery GTV margins on investments; the AI application race; going global and shareholder returns). Given the weaker 2Q profit set-up for transaction platforms, we recommend a dual-pronged approach on stock picking (with higher emphasis on defensive sub-sectors + domestic policy beneficiaries that are on discounted valuations). Accordingly, games continue to be our #1 preferred sub-sector, and we continue to like mobility (#2 preferred) on stable landscapes. We lift internet verticals to #3 (from #4) as investors look for businesses with favorable market structures/higher barriers of entry, on the back of Commerce/local services competition. We lay out key stock ideas in China Internet (two mega-cap and five large/SMID) by our sub-sector preference Games: Tencent and NetEase, Mobility: Full Truck Alliance, Internet verticals: Xiaomi and Ronald Keung, CFA +852-2978-0856 | ronald.keung@gs.com Goldman Sachs (Asia) L.L.C. Lincoln Kong, CFA +852-2978-6603 | lincoln.kong@gs.com Goldman Sachs (Asia) L.L.C. Timothy Zhao +852-2978-2673 | timothy.zhao@gs.com Goldman Sachs (Asia) L.L.C. Steve Qiu +852-2978-2672 | steve.qiu@gs.com Goldman Sachs (Asia) L.L.C. Eunice Liu +852-2978-7472 | eunice.liu@gs.com Goldman Sachs (Asia) L.L.C. Luqing Zhou +852-3465-4207 | luqing.zhou@gs.com Goldman Sachs (Asia) L.L