Rating Quick Look | Ideanomics, Bilibili Ratings and Target Prices All Significantly Lowered! "Buy" Tencent, "Hold" Kuaishou-W

CICC: Maintains "Buy" rating on TENCENT, lowers target price by 3.2% to HKD 388

The bank stated that although WeChat's public courses will not be open to the public in 2024, it still sees important strategic directions for WeChat in terms of user experience, commercialization, and technological upgrades. The bank expects a 7% increase in revenue and a 12% increase in net profit in 2024, which is a 2% and 8% decrease from the original forecast.

The bank believes that TENCENT's long-term business shows a stable growth trend. While growth may slow down due to business volume, the bank expects future profit growth to continue to outpace revenue growth due to the sustainability of business stability, healthy growth, and continuous optimization of profitability.

It is also expected that the group's total revenue in the fourth quarter of 2023 will increase by 8% to RMB 156 billion, compared to market expectations of 9% growth. Taking into account the increase in marketing and promotion expenses due to the launch of new games, the net profit is expected to increase by 33% to RMB 39.5 billion, and the profit margin is expected to increase by 5 percentage points to 25.4%.

Daiwa: Downgrades rating of Ideal Motors-W from "Buy" to "Sell", significantly lowers target price from HKD 190 to HKD 100

The bank stated that due to weak sales and market competition, it has lowered the delivery forecasts for the next two years by 14% and 33% to 500,000 and 650,000 vehicles, respectively. The company's target of delivering 800,000 vehicles this year is believed to be difficult to achieve.

The report pointed out that the company's profitability is facing headwinds, as its monopoly position in extended-range electric vehicles (EREV) is being challenged by new competitors. Sales trends have weakened this year, mainly due to market slowdown and intensified competition. The company has already reduced prices by 8% to 10%, and further price reductions are expected. The bank has lowered its net profit forecasts for the period from 2023 to 2025 by 12%, 35%, and 55% respectively.

Morgan Stanley: Maintains "Overweight" rating on Kuaishou-W, target price of HKD 70

The bank stated that the incremental contribution from short videos and mini-games has driven the external advertising revenue to grow by over 10% YoY in the fourth quarter of last year, continuing the growth momentum from the second and third quarters. The bank also expects strong growth in e-commerce GMV, with a YoY increase of 29%, and sets the target price at HKD 70. Looking ahead to 2024, the bank predicts that Kuaishou's daily active users (DAU) in the second half of the year will exceed 400 million, with a 3% annual growth.

The bank expects Kuaishou to continue to outperform its peers in terms of growth, with better-than-expected profitability in the fourth quarter of last year and strong growth momentum. The bank predicts that Kuaishou's revenue in the fourth quarter of last year will increase by 16% YoY to RMB 32.8 billion, mainly driven by a 41% YoY increase in other income such as e-commerce and a 22% YoY increase in advertising revenue, while live streaming revenue is expected to remain flat YoY. The gross profit margin for the quarter is expected to increase to 52%, and the non-IFRS net profit forecast is RMB 4 billion, 25% higher than market expectations.

Nomura: Downgrades rating of Bilibili from "Buy" to "Hold", significantly lowers target price from HKD 160 to HKD 77

The bank stated that Bilibili lacks short-term catalysts, coupled with intense market competition and macroeconomic uncertainties, which puts pressure on increasing revenue from advertising business.

Citigroup: Raises target price for TSMC to NT$740, reiterates "Buy" rating

TSMC's fourth-quarter results were better than expected, with net income of NT$238.7 billion, up 13% QoQ but down 19% YoY. Management remains optimistic about the recovery this year, expecting revenue growth in the low to mid-20% range, about 20% higher than market expectations. TSMC maintains its long-term gross margin target of over 53% and capital expenditure guidance for this year of $28 billion to $32 billion, in line with the bank's expectations.

The bank believes that TSMC's HPC business is expected to experience strong growth, raising its sales portfolio guidance for AI chips to reach double-digit growth by 2027. Considering the company's strong project pipeline, the bank expects the company to achieve its target earlier.

Benchmark: Raises Netflix's target price from $350 to $425

The bank expects recent performance to be supported by strong fourth-quarter subscriber growth, with the addition of over 10 million new subscribers.

The bank also expects Netflix's shift towards ad-supported video on demand (AVOD) to create at least $52 of final stock value.