Goldman Sachs expects five major Chinese internet companies to lift their combined third-quarter net income about 9% from a year earlier, following back-to-back quarterly declines.
That increase applies to the group total. The individual outlooks cover different measures, including business-line revenue and margins, adjusted operating profit and companywide net income. They are projections, not reported third-quarter results, and do not mean each firm’s profit is expected to rise by the same amount.
For Tencent, Goldman projects gaming revenue will grow 8% and advertising revenue 19%. At Alibaba, it expects cloud revenue to increase 53%, with the cloud division’s operating margin near 12.5%. The bank also forecasts Alibaba’s adjusted earnings before interest, taxes and amortization to rise 238%, to about 31 billion yuan.
Meituan’s adjusted operating profit is forecast to climb 104%, to about 700 million yuan. Goldman sees JD.com’s group net profit rising 39%, to about 8 billion yuan.
Goldman views PDD Holdings’ cash and free cash flow positively, but expects expansion and platform investment to pressure earnings in the near term. It also expects gaming and entertainment to hold up better than e-commerce, advertising and local services while consumer spending in China remains weak.
JD.com is scheduled to release results Nov. 17, Tencent on Nov. 18 and Alibaba on Nov. 19.
