To The Moon

$Alibaba(BABA)$ $TENCENT(00700)$ The week of August 11-15, 2025, brings a critical spotlight to China’s tech giants as Tencent Holdings and Alibaba Group unveil their interim reports, shaping the Hang Seng Index and global investor sentiment. With Tencent reporting on Wednesday, August 13, and Alibaba on Friday, August 15, expectations are high amid a 14% Hang Seng Tech Index rally and tariff uncertainties (30% on EU/Mexico, 35% on Canada). The S&P 500 at 6,297.36 and Nasdaq at 20,884.27 reflect a bullish U.S. market, but China’s tech sector faces unique pressures from AI investments and domestic consumption shifts. Unpack the forecasts, key catalysts, and trading strategies to navigate this high-stakes earnings season.

Market Context: A Crucial Week Ahead

Economic Backdrop

• Tariff Tensions: The 90-day U.S.-China tariff truce expires Tuesday, August 12, with UBS estimating a potential 30-40% tariff hike, impacting China ADRs.

• China Data: July retail sales (expected 3.5% YoY) and industrial production (4.8% YoY) out Monday could set the tone.

• Global Sentiment: Oil at $75/barrel and the Israel-Iran conflict add geopolitical risks, while the Hang Seng’s 2.3% weekly gain signals optimism.

Recent Trends

The Hang Seng Tech Index, up 14% from its March low, reflects renewed hope in China tech, driven by AI breakthroughs like Tencent’s DeepSeek and Alibaba’s Qwen models. However, a potential August pullback (S&P 500 RSI 65, VIX 15.94) looms, per market analysts.

What to Expect from Tencent and Alibaba

Tencent Holdings (0700.HK)

• Earnings Date: Wednesday, August 13, 2025.

• Forecast: Analysts expect revenue of RMB 165 billion (17% YoY), driven by gaming (Domestic +24%, International +23%) and advertising (+20%), per Bloomberg. Adjusted net income is projected at RMB 63 billion (+22% YoY).

• Key Catalysts: Gaming Growth: Q1 2025 saw Domestic Games at RMB 42.9 billion and International at RMB 16.6 billion, with new titles like Honor of Kings boosting margins. AI Push: DeepSeek’s February breakthrough could lift cloud and ad revenues if monetized effectively. Share Repurchases: Q1’s HKD 17.1 billion buyback signals confidence, potentially supporting the stock.

• Risks: Tariff pressures on exports and a 5% YoY capex cut could slow AI infrastructure, per Goldman Sachs.

• Stock Levels: Trading at HKD 550, with support at HKD 530 and resistance at HKD 580.

Alibaba Group (9988.HK)

• Earnings Date: Friday, August 15, 2025.

• Forecast: Revenue is projected at RMB 245 billion (15% YoY), with cloud computing up 17% and e-commerce showing signs of recovery, per Reuters. Adjusted net income is expected at RMB 35 billion (+18% YoY).

• Key Catalysts: Cloud Momentum: Q1 growth of 18% to RMB 25.6 billion, with AI tools like Qwen driving enterprise adoption. E-commerce Revival: Taobao and Tmall seeing 10% GMV growth, aided by stimulus measures. AI Investments: Partnerships with SAP for AI process optimization could boost margins.

• Risks: Heavy cloud capex and a 53% YTD share gain (HKD 130) raise valuation concerns (forward P/E 18x).

• Stock Levels: Trading at HKD 130, with support at HKD 125 and resistance at HKD 140.

Trading Opportunities

Short-Term Plays

• Buy Tencent on Earnings Beat: Enter at HKD 530-540, target HKD 580-600, stop at HKD 520. A 7-12% gain if gaming and AI exceed forecasts.

• Buy Alibaba on Dip: Grab at HKD 125-127, target HKD 140-145, stop at HKD 122. A 10-15% gain if cloud and e-commerce shine.

• Options Straddle: Buy HKD 550 calls/puts on Tencent or HKD 130 calls/puts on Alibaba (August expiry) for volatility, targeting 200-300% gains on a 10%+ move.

• Scalp Post-Earnings: Buy Tencent at HKD 550-560, sell at HKD 570-580, stop at HKD 540; or Alibaba at HKD 130-132, sell at HKD 135-138, stop at HKD 128. A 3-6% gain on momentum.

Long-Term Investments

• Hold 0700.HK: Buy at HKD 530-540, target HKD 600-650 by 2026, for 9-18% upside with AI and gaming growth. Stop at HKD 510.

• Hold 9988.HK: Buy at HKD 125-127, target HKD 150-160 by 2026, for 15-23% upside with cloud and e-commerce. Stop at HKD 120.

• Diversify with HSTECH ETF: Buy at HKD 4,500, target HKD 5,000, stop at HKD 4,300, for tech exposure.

• Defensive Play: Buy HSBC (0005.HK) at HKD 70-72, target HKD 75-78, for 4-8% upside with stability.

Hedge Strategies

• VIXY ETF: Buy at $15, target $18, stop at $13, to hedge tariff or market volatility.

• HSI ETF Puts: Use puts at 19,500 to protect against a 5-10% Hang Seng pullback.

• Gold ETF (GLD): Buy at $200, target $220, stop at $190, as a safe-haven hedge.

My Trading Plan

I’m moderately bullish on both stocks, targeting HKD 580-600 for Tencent and HKD 140-145 for Alibaba by September 2025 if earnings beat expectations. I’ll buy 0700.HK at HKD 530-540, targeting HKD 580-600, with a HKD 520 stop, and 9988.HK at HKD 125-127, targeting HKD 140-145, with a HKD 122 stop. I’ll use HKD 550/130 call/put straddles for volatility. For diversification, I’ll add HSTECH at HKD 4,500, targeting HKD 5,000, with a HKD 4,300 stop, and HSBC at HKD 70-72, targeting HKD 75, with a HKD 68 stop. I’m hedging with VIXY at $15, targeting $18, and keeping 20% cash for dips if tariffs or weak China data hit. I’ll watch earnings calls, tariff truce outcomes, and AI revenue updates.

Key Metrics

The Bigger Picture

Tencent and Alibaba’s interim reports on August 13 and 15, 2025, are pivotal for China ADRs, with Tencent’s gaming and AI growth and Alibaba’s cloud and e-commerce revival in focus. The Hang Seng Tech Index’s 14% rally offers a tailwind, but tariff risks and a potential pullback (RSI 65) pose challenges. Strong earnings could push Tencent to HKD 580-600 and Alibaba to HKD 140-145, while misses might test supports at HKD 530 and HKD 125. Investors should buy on dips, leverage options for volatility, and hedge with VIXY or HSI puts to manage risks. This week could redefine China tech—position yourself to win.

Which stock are you betting on—Tencent or Alibaba? Share your earnings play below! 🎁

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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