Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: https://www.research.hsbc.com   Senior leadership of NetEase, Baidu, Ctrip, 58.com and Momo  NetEase optimistic on gaming pipeline while Baidu positive on long-term potential of search and news feed opportunity  Maintain Buy on Baidu, NetEase, Ctrip, Momo and 58.com, with target prices unchanged Face-to-face with chief decision-makers Our meetings with management helped address key investor debates on select stocks. NetEase Founder and CEO Ding Lei discussed Minecraft as well as new game launches and strategy. Minecraft has consistently been in the top five game app downloads since launch, achieving management’s goal of user adoption. Mr Ding commented that monetisation would be gradual, starting in mid-October through item sales. In 4Q, the company expects to launch a number of “escape” and “survival” mobile games, leveraging a genre newly popular on PCs. Baidu’s Group COO, Dr Qi Lu, expects search usage to continue to grow due to product innovations and richer content while the “strong signals” from intent-driven query data should continue to improve conversions (click-through rates). Further, news feed represents a material and meaningful new incremental growth opportunity (without cannibalising core search). Ctrip: Cindy Wang, CFO, believes Ctrip has high barriers to entry in the hotel business, with stakes in economy hotel chains as well as good relationships with mid-market to high-end hotels. Ctrip’s international expansion plan rests with Skyscanner, leading with international air ticketing. Management is gradually testing opt-in and partial opt-in for its services, as well as membership programmes that include express lanes and discounts on lounges. Momo: Jonathan Zhang, CFO, pointed to the company’s continued evolution as a video social platform. He said its live streaming business is on track, with short videos gaining momentum in terms of user engagement. Short video ads, which have much higher eCPM, should contribute materially to revenue growth from 4Q. If the actual channel marketing expenses are lower than budget, there may be upside to margins. 58.com: Hao Zhou, CFO, maintained a cautious view on the housing market, as some housing agencies may downsize given the persistent policy restriction in China. But he expects other business lines, especially jobs, to perform well. Losses from its investees, such as 58 Home, will likely continue to shrink due to limited competition. 27 September 2017 Chi Tsang*, CFA Global Head of Internet & E-commerce Research The Hongkong and Shanghai Banking Corporation Limited chitsang@hsbc.com.hk +852 2822 2590 Wayne Wang* Associate The Hongkong and Shanghai Banking Corporation Limited wayne.n.wang@hsbc.com.hk +852 2914 9935 Heather Q Li* Associate The Hongkong and Shanghai Banking Corporation Limited heather.q.li@hsbc.com.hk +852 2996 6574 *Employed by a non-US affiliate of HSBC Securities (USA) Inc. and not registered/qualified pursuant to FINRA regulations China Internet EQUITIES INTERNET CHINA MiFIDII–ResearchIsyouraccessagreed?CONTACT us todayHSBC Global Research 1st annual Internet CEO/CFO trip takeaways  EQUITIES ● INTERNET 27 September 2017 2 Optimistic on the Future of Search Search meets the fundamental need to gain knowledge and seek services Dr Qi Lu, Vice Chairman, Group President and Chief Operating Officer, discussed his view of the future of search. Baidu’s core focus is to increase users and usage. Despite market concerns on growth, search remains the natural gateway to access digital information and Baidu’s own product innovation will expand search usage. Search content will become richer, per Dr Qi, incorporating multi-media and video, bringing search closer to intent. Baidu is also working on new modalities for search, including voice and image input methods. Further, search is ideally suited for long-tail queries. Nearly 20% of search queries daily are new and have never been asked. 25m new URLs are registered daily. As usage grows, Baidu expects to use data and personalisation drive higher conversion rates. Using AI, Baidu has already seen meaningful improvement in click through rates, with more potential ahead. Dr Lu noted that Baidu has the broadest and deepest knowledge of its users. Search queries reflect intent and is very explicit, representing a very strong signal, whereas page views on PC are weak signals. Baidu is working to integrate all the signals it receives from search queries, different verticals and Baidu wallet to deliver the most targeted and relevant information and advertisements to its users. News Feed represents significant incremental opportunity Baidu launched its news feed feature on Mobile Baidu earlier this year and h