Big Moves | Can TENCENT rise by another 50%? BIDU-SW target price gets raised!

Wall Street collectively raises TME-SW target price, with nearly 50% upside potential

See "TME-SW fell after earnings, but Wall Street collectively raised target price! Why?" for details.

Morgan Stanley: Maintains Tencent Music "Overweight" rating, raises target price by 5% from $10 to $10.5

If calculated based on the latest closing price of $8.31, this price means there is still 26% upside potential!

The bank expects music business revenue to surpass social entertainment service revenue in the second quarter, and music business profits to exceed social entertainment service profits next year. In addition, subscription revenue growth in the first quarter hit a record high, and the momentum is expected to continue into next year, with the music business operating profit margin expected to exceed 15% for the year. The bank raised its earnings per share forecast for this year and next year by 20%; and pointed out that Tencent Music's current valuation, excluding cash, is equivalent to a forecast price-earnings ratio of 9 times, which is attractive.

Credit Suisse: Maintains Baidu "Outperform" rating, raises target price by 2% from HKD 171 to HKD 174

If calculated based on the latest closing price of HKD 125.6, this price means there is still 39% upside potential!

The bank pointed out that Baidu's core revenue in the first quarter increased by 8% year-on-year to RMB 23 billion, exceeding expectations. Among them, core advertising revenue increased by 6% year-on-year, and the adjusted core operating profit margin was 23%, mainly due to the higher advertising business portfolio and the adjusted cloud business operating profit reaching a balance of income and expenditure.

The bank expects Baidu's core advertising revenue to increase by 13% year-on-year to RMB 19 billion in the second quarter, and by 10% year-on-year in 2023. At the same time, it also raised its forecast for the full-year core operating profit margin from 20% to 23%. The bank raised Baidu's adjusted earnings per share forecast for this year by 20%, reflecting a clearer prospect for advertising recovery.

Daiwa: Upgrades Xtep from "Outperform" to "Buy", target price HKD 11.5

If calculated based on the latest closing price of HKD 8.74, this price means there is still 32% upside potential!

The bank stated that Xtep's retail sales have continued to record strong growth since the second quarter. The report mentioned that the group's management stated that although the market still has concerns about the recovery of consumer sentiment and the return of global brands, and domestic brands also face destocking pressure in the second quarter of this year, the bank is encouraged by Xtep's resilience in retail sales since the beginning of the year and believes that the company is in a more favorable position among its peers and can adapt to consumers' demand for products. The bank has raised its potential guidance to a short-term stock price catalyst, citing the low base effect of the group in the second half of last year, and believes that if sales momentum can be sustained until June, the group may raise its guidance.

Daiwa: Maintains a "outperform" rating for 9.9, and lowers the target price from HKD 21.4 to HKD 17.2, a decrease of 20%.

If calculated at the latest closing price of HKD 14, this price means that there is still a 23% upside!

The bank stated that against the background of unstable consumer sentiment in the mainland, it has always maintained a pragmatic attitude towards the gradual recovery of same-store sales growth in the mainland catering industry. However, 9.9 is not the only company that has not returned to pre-epidemic levels of same-store sales.

The bank stated that it will re-examine its revenue growth expectations for 9.9 to take into account recent market sentiment changes, and will reduce its earnings per share forecast for 2023 to 2025 by 12% to 17%. However, it believes that the current stock price underestimates the potential core competitiveness of 9.9 in multi-brand execution, and is optimistic about its ability to maintain brand traction and improve new concepts in the long term.