Embrace the new normal of regulation and actively explore the growth opportunities of subdivided tracks: the performance of the Internet sector has been ups and downs since 2021. Since the beginning of 2021, the Hang Seng technology index has decreased by about 30%. On the one hand, the sector has ushered in strong regulation, involving platform economy, antitrust, data and information security, education and people’s livelihood, We believe that the regulatory policy is not to restrict growth or oppose profitability, but to encourage benign competition and help guide the long-term and healthy development of the industry. After laying down the general direction guidance, some detailed rules are being issued in succession recently, and the overall policy environment is gradually becoming clearer. In addition, the overall industry has entered an important investment period, the e-commerce industry has ushered in structural growth opportunities, fresh food, FMCG, medical health and other segments with low online penetration have burst out a strong momentum, and various platforms have increased investment in infrastructure; By expanding new categories, investing in new technologies and creating high-quality games, the game industry has entered the overseas market to seize growth opportunities.
Competition in the e-commerce battlefield, explore differentiation and meet the diversified needs of users: ① comprehensive e-commerce: the competition of comprehensive e-commerce platform intensifies, and the growth rate of Ali’s core business gradually converges with the market. It is building a diversified product matrix, making efforts to sink the market, investing in strategic fields and exploring overseas markets to meet challenges. JD’s stable position in the advantageous categories of electrified and large business supermarkets and solid supply chain capacity make its performance more resilient. Pinduoduo buyers has ranked first in the industry and met the diversified needs of users by investing in the agricultural sector and exploring brand cooperation. ② Community group buying: the middle waist platform in the industry is gradually cleared, and the competition pattern is becoming clearer. However, the overall industry is still in an important investment stage. Meituan has significant competitive advantages in selecting and buying more vegetables, the growth rate of panning vegetables is bright, and Jingxi’s investment remains disciplined. ③ Live e-commerce: Live e-commerce guides users to conduct discovery shopping through content. Its development is still in the fast lane. At present, it has formed a pattern of top three. Taobao live broadcasting is an important part of Taobao’s content ecology; Tiktok, positioning interest business; Kwai to create trust business. ④ Local life: the competition pattern of local life track is clear, meituan’s dominant position is stable, and the digital local life service market is still in the initial stage of development. IResearch predicts that the scale of China’s local life service market will increase from 20 trillion yuan in 2020 to 35 trillion yuan in 2025, and the online penetration rate will increase from 24% to 31% in the same period.
Online entertainment track performance differentiation, focusing on the progress of game going to sea and short video commercialization: ① the game industry suggests paying attention to the head company’s new product reserves and going to sea opportunities. Tencent Netease has rich product reserves, and the overseas market is an important driving force for medium and long-term growth. In terms of supervision, the anti addiction of minor users has been gradually implemented, and it is recommended to actively pay attention to the progress of version numbers. 2. Tiktok industry has accumulated a higher user base, but the share of time shares is still expanding. The overall business has great potential for growth. The chattering and fast hand itself rely on entertainment scenes, and the video number is based on WeChat’s acquaintance social relations chain, and Kwai quickly forms a differentiated positioning and operation characteristics.
The concept of metauniverse has burst into new opportunities, and the head Internet company has made positive layout: after 2020, the trend of going offline catalyzed by the epidemic has accelerated. In 2021, roblox’s US stock listing and Facebook’s renaming meta have also attracted keen attention from the market. The head Internet company is also making positive layout of metauniverse. Tencent has put forward the concept of real Internet and called it the next wave of upgrading of mobile Internet; Netease has made technical and planning preparations and will launch a meta universe game platform similar to roblox. We believe that metauniverse is still in the early stage of development. Moving from concept to reality needs to be further driven by core technologies such as artificial intelligence, blockchain and interactive technology. Leading Internet manufacturers with leading technical strength have made forward-looking layout.
Investment suggestions: ① there is still room for upward penetration of e-commerce. It is recommended to pay attention to the growth opportunities of sinking markets and emerging online categories, and Jingdong is preferred (with stable fundamentals and resilience to cope with macro headwinds); Actively pay attention to Alibaba (the layout of e-commerce infrastructure is perfect, and the performance of optional categories is expected to improve with the macro recovery), pinduoduo (invest in the agricultural sector and explore brand cooperation to strengthen the user’s mind). The local life track has a clear competition pattern and is optimistic about meituan (the competitive position is stable and the second growth curve appears). ② It is suggested to pay attention to the progress of game going to sea and short video commercialization. Netease is preferred (performance is catalytic, and many games will be launched in the global market); Long term optimistic about Tencent (head game has long maintained liquidity and is driven by multiple engines); With the gradual expansion of the volume of short and medium video, the proposal to focus on Kwai Fu (adjusting the organizational structure, optimizing operational efficiency, gradually releasing commercial potential), and beep (content ecology and radical marketing strategy to support user growth) are suggested.
Risk warning: the impact of regulatory policies exceeds expectations; The slowdown of macroeconomic growth affects consumption ability and willingness; The competition of different types of applications for the duration of Internet users is intensified; The reduction of tax preference affects profits.
