Big Moves | Microsoft + OpenAI, at least a $40 increase in market value? Netflix target price gets raised!

Goldman Sachs: MEITUAN-W rated "Buy" with a target price of HKD 207

If calculated at the latest closing price of HKD 110.2, this price implies an 88% upside!

The bank believes that MEITUAN-W maintains a leading position in the food delivery industry.

The bank stated that it had a meeting with MEITUAN-W management yesterday and quoted the management's expectation that the core local business revenue will increase by more than 30% year-on-year this year, and the estimated average annual compound growth rate of core local business EBIT in the next few years will exceed 20%. The unused RMB 500 million budget in the first quarter will be reinvested in the second quarter's budget for store merchants' rebates/subsidies.

In addition, the company's management still has confidence in achieving the target of GTV of over RMB 600 billion for the current fiscal year for in-store, hotel, and travel transactions, and continues to expect a 35% profit margin for in-store business in the fiscal year 2025. At the same time, the management expects that the order volume of the food delivery business this year is expected to increase by more than 20% year-on-year, and the EBIT of each order will increase even more, supporting the strategic reinvestment of in-store business.

Goldman Sachs: SUNNY OPTICAL rated "Neutral" with a target price lowered by 10% to HKD 103

If calculated at the latest closing price of HKD 73.6, this price implies a 40% upside!

The bank mentioned that most new models of smartphones in China have been launched from March to May, and the replenishment cycle is reaching its peak and may end in June.

The bank believes that due to the limited number of new models and the soft terminal demand caused by macro challenges and slower replacement cycles, the growth momentum of Android phones will slow down in the second half of the year. At the same time, due to the weak automotive retail data from the beginning of the year to the present, the bank holds a more conservative view on the revenue growth of the company's automotive camera module.

Jefferies: Netflix rated "Buy" with a target price raised from USD 405 to USD 440, up 9%

If calculated at the latest closing price of USD 392.98, this price implies a 12% upside!

Netflix announced last week that it will start cracking down on password sharing in the United States. Analysts said that the new rules and pricing "are completely consistent with our model" and believe that a considerable number of users who borrow accounts will switch to new subscription packages. They also believe that the change in password sharing policy will drive subscription user growth.

The bank stated that considering that competitors are deleting content, reducing budgets, and raising prices, the bank's concerns about intensified competition have also decreased.

Wedbush: Microsoft's target price raised to USD 375

If calculated at the latest closing price of USD 331.21, this price implies a 13% upside! The line indicates that the AI revolution is gaining momentum, and Microsoft's integration of ChatGPT technology "changes the game rules."

"We firmly believe that Microsoft's first step is Azure/Office 365, and the next step is the monetization of ChatGPT/artificial intelligence in the consumer and enterprise fields, which will increase Microsoft's total market value per share by $40 to $50."

The line indicates that Nvidia's recently released "eye-catching performance guidance" is a direct barometer of Microsoft. Recent surveys show that the company's monetization opportunities "are much earlier than Wall Street expected," as recent surveys and on-site investigations of customers and partners show that Microsoft is leading the monetization of artificial intelligence in cloud technology.

"We expect that Microsoft's spending of $35-40 on artificial intelligence for every $100 spent on Azure in the past few years will change the game rules and change the entire target market for CEO Satya Nadella and his company in the future."

The line also points out that as the artificial intelligence market expands to an estimated value of $800 billion over the next 10 years, there will be other beneficiaries, including Google, Amazon, Oracle, Palantir, and Salesforce.

Analysts also point out that ChatGPT is likely to become the next "growth pillar," helping Microsoft increase revenue and profit margins in the next fiscal year. In recent months, ChatGPT has been expanded to several of Microsoft's products and services.