Analysis Report | Nvidia's rating and target price have been significantly raised! Can XPeng Inc. rise by 166%?

Kepland: Upgrades NVIDIA's rating to "Buy" with a target price of $645, up 47% from $440.

If calculated at the latest closing price of HKD 468.35, this price implies a 38% upside potential!

The bank stated that with NVIDIA's revenue and data center sales doubling year-on-year, the company seems to have a "market monopoly" in the GPU field.

In addition, the company's gaming business has resumed growth, and although the revenue of the professional visualization business continues to decline, the growth of the data center compensates for this, especially with NVIDIA's collaboration with suppliers to increase capacity for the remaining time of this fiscal year.

"NVIDIA believes that data centers are shifting towards accelerated computing as it is considered the most cost-effective and energy-efficient computing method."

"This platform has realized generative AI technology, greatly improving the productivity of many workloads, which in turn creates further demand for this accelerated computing platform. The company sees this as a long-term industry transformation that will provide sustained strong demand growth for its data center business."

JPMorgan: Maintains "Overweight" rating on NetEase, raises target price by 5% to HKD 195 from HKD 185.

If calculated at the latest closing price of HKD 163.6, this price implies a 19% upside potential!

The bank stated that since NetEase announced its second-quarter results last Thursday, its stock price has fallen by about 4% due to investor concerns about declining revenue from its traditional games. The bank advises investors to buy on the dip, mainly because since June, the company has launched various new games that will drive its online game revenue growth from 2% in the second quarter to 14% and 26% in the third and fourth quarters, respectively, and expects the company's existing game revenue to rebound in the second half of the year.

The bank expects NetEase's non-GAAP operating profit to increase by 39% and 80% year-on-year in the third and fourth quarters, respectively, and expects double-digit growth in the company's annual online game revenue, up 12% year-on-year. The bank has raised its earnings forecasts for NetEase by 17% and 14% for the current and next fiscal years, respectively, to reflect more optimistic expectations for its structural profit expansion and stable game outlook.

JPMorgan: Maintains "Overweight" rating on New Oriental, raises target price to HKD 55.

If calculated at the latest closing price of HKD 42.65, this price implies a 29% upside potential!

The bank stated that New Oriental's subsidiary, Dongfang Zhenxuan, a live-streaming e-commerce company, recently released its annual performance as of the end of May this year, which met expectations. Accordingly, the bank adjusted its operating forecast for New Oriental, with no changes to its core and education business forecasts. This includes adjusting the adjusted net profit for the fiscal year 2024 from $368 million to $369 million, and adjusting the adjusted earnings per share forecast for fiscal years 2023 and 2024 to $0.15 and $0.22, respectively. The bank expressed optimism about the rapid growth of New Oriental's business and predicted a revenue growth rate of over 30% in the coming year. It has a considerable level of profit visibility, and the regulatory environment in the industry is becoming more stable. Coupled with its low valuation, the bank believes that the current price level is undervalued.

First Shanghai Securities: Maintains a "Buy" rating on Meituan with a target price lowered by 6.5% to HKD 201 from HKD 215.

"If calculated based on the latest closing price of HKD 137.3, this price implies a 46% upside!"

The bank pointed out that Meituan's core local business profitability continues to improve, and its flash purchase business maintains high-speed growth. In addition, losses from new businesses have narrowed, and investments in cold chain and logistics have increased.

Based on comprehensive analysis, the bank believes that the food delivery and in-store travel sectors will continue to see increases in daily transaction volume, penetration rate, and a gradual reduction in subsidies, contributing to revenue and profit growth.

Based on the projected financial performance for 2023, the bank maintains the same valuation method for the segments. Considering the current lack of overall liquidity in the Hong Kong stock market and the Federal Reserve's ongoing interest rate hikes, as well as the rise in risk-free interest rates, the bank slightly adjusts the valuation center of the food delivery, in-store travel, and new business segments.

Guotai Junan Securities: Maintains a "Buy" rating on XPeng with a target price of HKD 197.88.

"If calculated based on the latest closing price of HKD 74.3, this price implies a 166% upside!"

Considering XPeng's leading autonomous driving algorithm capabilities and continuous software supply revenue, the bank believes that the company should enjoy a higher valuation. Compared to the industry-leading company Tesla, XPeng is given a 2024 target price-to-sales ratio of 5X.

Given the expectation that the company's strategic cooperation model with Didi will be implemented and scale deliveries will begin next year, the bank maintains the company's revenue for 2023 unchanged. The revenue for 2024-2025 is revised from CNY 57.7/104.5 billion to CNY 63.7/122.5 billion. The bank also maintains the net profit attributable to shareholders for 2023 unchanged, while revising the net profit for 2024-2025 from -CNY 3.5/1 billion to -CNY 3.2/7 billion, corresponding to a price-to-sales ratio of 5/5/3.