This week, China's three major Internet giants-Tencent, Meituan and Pinduoduo-will successively release their fourth quarter 2024 financial results.Although the market generally expects its core business to continue to grow, analytical reports from Goldman Sachs and other institutions have revealed a complex picture beyond the financial results in advance.

Tencent: Dual engines of games and AI

Tencent's financial report undoubtedly focuses on the recovery of its game business and the commercialization of AI technology.Goldman Sachs predicts that Tencent's game revenue in the fourth quarter will increase by 17% year-on-year, mainly due to the strong performance of "Glory of the King" and "Peace Elite" during the Spring Festival, and the increase in the proportion of game revenue in the international market to a new high of 30%.However, there are hidden concerns behind this growth: the "Dungeon and Warriors" mobile game (mDnF) launched in May last year will face a high base effect in the second half of 2025. Coupled with the stricter approval of domestic game version numbers, the annual growth rate may fall back to 10%.At the same time, Tencent's advertising business is undergoing structural upgrades through the deepening of the WeChat ecosystem. The linkage between Advertising Product 3.0 and WeChat Ministores is expected to accelerate online advertising revenue to 15% in 2025.

Capital allocation strategy is another major attraction.In 2023, Tencent spent 103 billion yuan to buy back shares and pay dividends, but the market is more concerned about how it balances investment in AI R & D and returns to shareholders.The integration of DeepSeek R1 model and WeChat AI search has achieved initial results, but Goldman Sachs pointed out that if AI-related capital expenditures exceed market expectations in 2025, it may suppress short-term profits.This contradiction reflects the typical dilemma of Internet giants during their transition-how to reconcile the long-term value of technology investment with the capital market's demands for immediate returns.

Meituan: Profitability resilience of local businesses versus global trial and error costs

Meituan's core local commercial segment is expected to deliver 46% year-on-year EBIT growth, takeout transaction volume will increase by 10%, and in-store liquor tourism profit margin will stabilize at 31.6%, demonstrating its operating efficiency in the existing market.However, high base effects and competitive pressures are reshaping the logic of growth: the GMV of Douyin Local Life Service will exceed 400 billion yuan in 2024, forcing Meituan to tilt resources towards merchant content coverage and user subsidies, which may erode its 2025 GTV profit margin (expected to remain at 3%).What is even more noteworthy is the cost of trial and error in new businesses-the expansion of Keeta, the Middle East takeout platform, the continued investment in fresh food retail, and the research and development of robot technology may all become variables that drag on profits.

Uncertainty in the policy environment further exacerbates risks.Although Meituan's domestic business has been less directly affected, the Trump administration's repeated tariff policies have caused fluctuations in cross-border logistics costs. If U.S. restrictions on China technology companies are escalated in 2025, its overseas expansion plans may face more pressure from review.This two-line battle of "defending the city and expanding the border" tests the accuracy of Meituan management in capital allocation.

Panduo: Temu's paradox of globalization

Pinduo's financial report will become a touchstone for testing the feasibility of "globalization of China's low-price model."Although Goldman Sachs forecast an 11% year-on-year increase in adjusted net income in the fourth quarter, the growth rate slowed significantly from the 48% in the third quarter, exposing the pain of Temu's business model adjustment period.The repetition of U.S. tariff policies has forced the platform to accelerate its transition to a semi-managed model: it attempts to circumvent tariff barriers by attracting local sellers to settle in and arranging overseas warehouses.However, this transformation is accompanied by a decline in inventory turnover and an increase in operating costs. CITIC Securities estimates that if the United States implements a 10% tariff and cancels the US$800 tax exemption policy, Temu's commodity price advantage will narrow from 40% to 27%, while small and medium-sized sellers may withdraw in batches due to the fragile capital chain.

The domestic market is also undercurrent.The marginal benefits of Pinduoduo's "tens of billions of subsidies" are diminishing, and the revenue growth rate in the third quarter of 2023 has dropped to 44%, which is lower than market expectations.Although Goldman Sachs expects that the low-base effect will boost profits in the second half of 2025, Jingdong's restart of "tens of billions of subsidies" and Douyin E-commerce's GMV exceeded 3 trillion yuan are squeezing its growth space.Pinduoduo's response strategy-reducing merchant liquidity in exchange for GMV growth-has led to a 9 percentage point month-on-month decline in operating profit margins. If this trend continues, the capital market's narrative logic of "growth for profit" may be shaken.