Big Moves | Nvidia and PDD Target Prices Significantly Raised! MEITUAN-W Suffers Violent "Price Cut"

Daiwa: Reiterate "Buy" rating on MEITUAN-W, target price lowered by 17% to HKD 170

If calculated based on the latest closing price of HKD 115.8, this price implies a 47% upside potential!

The bank pointed out that although MEITUAN-W's first-quarter profit exceeded expectations, it is expected that aggressive strategies such as discounts and rewards to increase market share in the next two quarters will cause the operating profit margin of the company's in-store, hotel, and tourism businesses to reach 30%, which may disappoint investors, and investors will worry about further downside potential for profits.

The bank expects the profit margin to reach 35% from 2023 to 2025, and believes that the profit of the catering and takeaway delivery business can exceed expectations, and new businesses can make up for the additional expenses of the in-store business, and the loss is expected to narrow. Therefore, the bank raised the group's profit forecast for 2023 to 2025 by 17% to 41%.

UBS: Maintain "Buy" rating on CLOUD MUSIC, target price raised by 1% to HKD 175

If calculated based on the latest closing price of HKD 139.9, this price implies a 25% upside potential!

The bank stated that NTES-S's first-quarter revenue and gross profit exceeded expectations, and the year-on-year growth of mobile games in the period exceeded expectations, mainly driven by the new mobile game "Eggy Party" and strong revenue from existing games. Although the second quarter is a traditional off-season, seeing the launch of new games in June, including "Justice Mobile", "Badlanders", "Racing Maste" and the first anniversary of "Eggy Party" will also become a catalyst.

The bank pointed out that due to the timing of the above new releases and activities, it should accelerate the year-on-year growth of CLOUD MUSIC's third and fourth quarter revenue, and is optimistic about CLOUD MUSIC's first-quarter performance, believing that it is defensive in the macro environment and has provided a good fundamental outlook for the remaining time this year, which is seen as a catalyst.

Goldman Sachs: Maintain "Buy" rating on Kuaishou, target price HKD 90

If calculated based on the latest closing price of HKD 51.2, this price implies a 76% upside potential!

The bank stated that despite some challenges in the market, it is optimistic about Kuaishou's performance in the face of competition and market changes. Kuaishou has achieved positive results in user engagement, e-commerce advertising, and external advertising, and plans to further improve performance by strengthening video content production and monetization. It is believed that Kuaishou will maintain stable growth in the future quarters and has good long-term growth potential.

Goldman Sachs: Reiterate "Buy" rating on NVIDIA, target price raised by 60% to USD 440

Goldman Sachs: Reiterates "Buy" rating on Microsoft, raises target price by 4% to $350

"If calculated at the latest closing price of $332.89, this price means there is still 5% upside potential!"

The bank said that Microsoft's product release at the Build developer conference is believed to bring higher average monthly revenue per user (ARPU) to the company's large product suite. The bank believes that Microsoft is still firmly incorporating generative AI capabilities into all aspects of its products. Currently, 4,500 enterprise customers are using Azure OpenAI services, and it is expected that the contribution of generative AI to Azure's growth will accelerate from the fourth quarter of this year.

The bank further raised its forecast for Microsoft Azure's revenue growth next year from 22.7% to 23.4% to reflect Microsoft's accelerated innovation in product accessories around the chatbot Copilot.

Morgan Stanley: Maintains "Buy" rating on Pinduoduo, raises target price by 8% to $98 from $91

"If calculated at the latest closing price of $71.42, this price means there is still 37% upside potential!"

The bank said that Pinduoduo's revenue growth of 58% YoY to RMB 37.6 billion was mainly driven by strong advertising revenue (online marketing services) and GMV growth, exceeding Morgan Stanley's valuation and market forecasts of 15%/17%. Adjusted net profit reached RMB 10 billion, exceeding the market's general forecast of RMB 6.2 billion. Management remains optimistic about the recovery momentum and emphasizes further improving consumer awareness by providing better services and high-quality supply.

The bank is optimistic about the company's revenue growth potential, but holds a relatively conservative view on profits.

UBS: Reiterates "Buy" rating on NVIDIA, raises target price by 13% to $900

"If calculated at the latest closing price of $389.46, this price means there is still 13% upside potential!"

The bank pointed out that with the development of generative AI, NVIDIA's first-quarter earnings per share exceeded market expectations by 18%, giving a second-quarter revenue guidance of $11 billion, which was raised by 53% from the previous forecast, indicating that the data center business is close to doubling and has sustainability.

Although the sustainability is highly questioned, the bank believes that the expansion of generative AI in various vertical fields, coupled with the promised supply chain utilization, will support continuous growth in the quarters ending in October and January.

The bank pointed out that although there is competition from large cloud service providers (CSPs) and other computing semiconductor suppliers, it believes that NVIDIA will maintain its industry standard position in the foreseeable future because the group has competitive advantages and the urgency of customers to develop/deploy complex AI models is increasing.