Bank Analysis Report | XPeng's target price has been raised! Apple, Tencent, Meituan, Kuaishou, and NetEase are all favored!

J.P. Morgan: Maintains "Overweight" rating on Tencent, target price of HKD 440

See "J.P. Morgan Bullish on 'WeChat Mini Games': Market Still Underestimating Tencent!" for details.

J.P. Morgan: Maintains "Overweight" rating on NetEase-S, target price of HKD 195

Based on the latest closing price of HKD 158, this price implies a 23% upside potential!

The bank stated that although the company's stock price has risen 40% year-to-date, it is expected to continue outperforming the market, making it the preferred choice in the Chinese gaming industry.

The report mentioned that including NetEase in the bank's list of positive catalysts is expected to benefit from several of its games, such as "Nishuihan" mobile game, "Egg Party," "Streetball Party," "Peak Speed," and "Eternal Abyss," with better-than-expected game revenue growth in the third and fourth quarters of this year.

Market peers expect NetEase's monthly incremental revenue from games and value-added services in the third and fourth quarters of this year to be CNY 900 million and CNY 1.2 billion, respectively (compared to the second quarter of 2023), considering these forecasts to be relatively conservative.

The bank predicts that with the leverage of revenue from new games and increased contribution from internal distribution channels, the gross margin will improve in the second half of this year, potentially leading to further upward revisions of its profit forecasts for the next two years, supporting its stock price.

CICC: Maintains "Outperform" rating on Meituan-W, target price of HKD 184

Based on the latest closing price of HKD 117.2, this price implies a 57% upside potential!

The bank stated that during the company's non-transactional roadshow with management, they addressed market concerns such as competition in the in-store business, growth in food delivery orders, and progress in reducing losses in the preferred selection business. The bank believes that the current stock price already reflects market sentiment, and the company's food delivery barriers remain high, in-store competition is stabilizing, and there have been no significant changes in the fundamentals. They recommend investors to accumulate positions on dips.

The report mentioned that the company stated that the ratio of pre-redemption GMV to Douyin has stabilized at 2:1, and the ratio after redemption has stabilized at 3:1. Considering that Meituan and Douyin have different classification criteria for local life, with Douyin's local life including categories that Meituan does not cover, such as travel agencies and shopping malls, the stability of the competition ratio indicates that Meituan's series of competitive measures have achieved phased results. However, the company stated that it will maintain a high level of investment in response to the peak summer season in Q3, with an OPM guidance of 30%-35%.

Looking ahead to Q4, if there are no significant changes in the competitive environment, the bank expects Meituan's in-store OPM to bottom out and rebound during the off-peak season. In the long term, the company still maintains its guidance of 35% OPM for the 25-year in-store hotel and travel business.

FURUI: Recommends "Buy" rating for Kuaishou, target price of HKD 113

Based on the latest closing price of HKD 61.85, this price implies an upside potential of 83%!

The bank stated that Kuaishou's management believes that content ecosystem, product capabilities, and traffic strategy are crucial. It is expected that the average daily usage time of users in the third quarter will perform well, with a target of reaching 120 minutes for the full year. The daily active users are close to 400 million, and user experience and commercialization will be the focus in the future.

The report pointed out that Kuaishou has various advertising models and a deep understanding of user preferences, which is important for advertisers. The rich content ecosystem and increased advertising budgets are favorable for Kuaishou. It is expected that video views and ad placements will experience high-quality growth. Kuaishou is the main beneficiary as mainland users spend more time watching short videos and live broadcasts.

Goldman Sachs: Reiterates "Buy" rating for Xiaopeng Motors, raises target price by 8% to HKD 80

Based on the latest closing price of HKD 65.7, this price implies an upside potential of 22%!

The bank expects G9's gross margin to be higher than G6, and the selling price to be higher as well. Both models are based on Xiaopeng's SEPA2.0 platform and use 80% common components. The bank has raised the group's 2023 sales forecast from 143,000 units to 156,000 units. Therefore, revenue forecasts for 2023-2025 have been raised by 6-10%.

Wedbush: Maintains "Outperform" rating for Apple, target price of USD 240

Based on the latest closing price of USD 174.79, this price implies an upside potential of 37%!

The bank stated that the demand for iPhone 15 Pro and iPhone 15 Pro Max is still "very strong." "So far, consumers are most interested in the iPhone 15 Pro Max, and the shortage of this model has begun to intensify throughout the supply chain."

The analyst added that the pre-order volume of the iPhone 15 series exceeded the bank's and most of Wall Street's expectations. Investigations into the Asian supply chain indicate that Apple's shipments may reach 85-90 million units, as the promotional activities by carriers such as AT&T, Verizon, and T-Mobile are "remarkable."