Big speed read | Meta Platforms rating and target price both significantly raised! TENCENT still has 40% upside potential?

CICC: Maintains TENCENT's "Outperform" rating with a target price of HKD 475

If calculated based on the latest closing price of HKD 344.8, this price implies a 38% upside potential!

The SPARK 2023 TENCENT game conference was held on May 15, 2023. The conference was divided into three modules: new technological exploration, new product experience (including new and old games), and more new value (involving social value content such as disease patients and minors protection).

1. Use technology as a spear to achieve the "third expansion".

The bank believes that TENCENT has achieved a new upgrade of the game technology thinking paradigm-the game involves many cutting-edge fields of technology, which has commonality with the "hard technology" field. It can not only promote the development of underlying technologies such as chips, cloud computing, and artificial intelligence but also is expected to cross-border empower education, medical care, business, and other fields.

1. Heavy new games are intensively scheduled, waiting for subsequent new performance.

The bank believes that whether it is a new game launch or an old game iteration, it reflects the company's deep accumulation and calm rhythm of the game business, and the certainty of the recovery of the game business throughout the year is relatively strong.

1. Don't forget the original intention and keep in mind the social value.

Based on TENCENT's previous style, the bank believes that TENCENT's various business aspects will take social value as one of the key considerations, and is expected to get better development in the company's advantageous fields.

Bank of America: Upgrades Xiaomi's rating from "Underperform" to "Neutral" and raises the target price from HKD 8.6 to HKD 11.9, a 38% increase.

If calculated based on the latest closing price of HKD 11.22, this price implies a 6% upside potential!

The bank believes that electric vehicles will still be a cost burden for Xiaomi. The operating expenses related to it this year are expected to be between RMB 7.5 billion and RMB 8 billion. The valuation re-evaluation is expected to be affected by intensified market competition. However, the potential positive progress of electric vehicles may promote short-term rebound. In addition, due to the sluggish demand for smartphones and the weakening momentum of electric vehicles, the valuation may be limited.

Morgan Stanley: Upgrades Sunny Optical's rating from "In Line" to "Overweight" with a target price of HKD 106.

If calculated based on the latest closing price of HKD 84.25, this price implies a 26% upside potential!

The bank believes that the re-rating of Sunny Optical is mainly based on the breakthrough of new orders. The bank expects that the potential breakthrough of new orders in its smartphone lenses and automotive lenses/modules in the next 6-12 months will become a key catalyst.

Citigroup: Upgrades SMIC's rating from "Sell" to "Neutral" and raises the target price from HKD 16 to HKD 21, a 31% increase.

Loop Capital: Upgrades Meta from "Hold" to "Buy", raises target price by 45% to $320, up 34% from the latest closing price of HKD 238.86!

According to the bank, SMIC's Q1 revenue fell 10% QoQ, with a gross margin of 20.8%, in line with guidance. Q2 revenue is expected to grow by about 6% QoQ, with a midpoint gross margin of 20%, better than expected.

The report believes that SMIC's strong rebound is mainly driven by the increasing demand for new products from mainland customers under the trend of decoupling. The bank expects that its mainland customers can continue to increase their market share in consumer applications, and the momentum of inventory growth will continue for several quarters. The recent low point of the stock has passed.

Analysts believe that the cost rationalization of Meta is a one-time driving factor, but they are becoming more optimistic about the company's revenue prospects.

The bank believes that in addition to the acceleration brought about by the normalization of the base, the strong growth of the Advantage+ product and the profit momentum of Reels are also expected to boost Meta's performance.