Quick Look at the Big Banks | Is there a buying opportunity for Tencent? How much more can it rise? Tesla's target price has been downgraded!
Citi expects that the revaluation potential of Tencent's subsidiary, Huan Yuan, may gradually emerge in the coming months. The recent weakness in the stock price is due to weak macro sentiment, lack of buying catalysts, and unnecessary concerns about potential selling by major shareholders. However, this also presents buying opportunities in the market.
Deutsche Bank: Maintains "Buy" rating on Tesla, lowers target price by 5% to $285
See "Be cautious starting from the third quarter! Why is Tesla dangerous next year?" for details.
Citigroup: Reaffirms "Buy" rating on Tencent, target price of HKD 496
Based on the latest closing price of HKD 297.4, this price implies a 67% upside!
The bank stated that the weak performance of the group is due to weak macro sentiment, lack of buying catalysts, and unnecessary concerns about potential selling by its largest shareholder, Prosus, following recent management changes.
The bank believes that the resilience of Tencent's platform ecosystem, the efforts of management to improve operational sustainability and quality profits, and the recent release of the Metaverse large-scale language model have not yet been recognized by investors. However, it is expected that the continued attractiveness of video account advertising, especially driven by increasing user engagement and enhanced AI advertising technology, will provide multiple growth opportunities for its cloud and business service products, relying on the Metaverse and faster profit growth trends. This could be a mid-term catalyst.
The bank expects the revaluation potential of Tencent's Metaverse to gradually emerge in the coming months. The bank pointed out that the recent weakness in the stock price provides buying opportunities for the market and initiates a 90-day positive catalyst observation.
Macquarie: Maintains "Outperform" rating on New Oriental, raises target price by 20% to HKD 53
Based on the latest closing price of HKD 46.1, this price implies a 15% upside!
The bank expects New Oriental's revenue in the first quarter of fiscal year 2024 to grow by 35% YoY, reaching the upper limit of the company's guidance, mainly driven by steady demand for overseas test preparation and new education businesses. In addition, the bank expects New Oriental's non-GAAP operating margin in the first fiscal quarter to reach 15%, an increase of 2 percentage points YoY, mainly due to utilization rate improving to 60%, compared to 70% to 80% during peak times.
The bank expects the company's gross margin to further increase in the next two to three years due to revenue scale growth. The bank pointed out that due to the increase in the gross margin forecast for New Oriental Education, the non-GAAP net profit for fiscal years 2024 to 2026 is raised by 0.9%, 0.8%, and 0.7%, respectively.
CITIC Securities: Maintains "Buy" rating on Beike, lowers target price by 5% to HKD 76
Based on the latest closing price of HKD 40.4, this price implies an 88% upside!From a static perspective, the bank's calculation suggests that the reduction in commission fees by Beijing Lianjia may affect net profit by approximately 5 percentage points. From a dynamic perspective, the increase in market share and the development of new housing and home decoration businesses are factors that the company can rely on to offset the decline in fees. Moreover, the market's recovery trend since the third quarter may result in the company's Gross Transaction Value (GTV) performing significantly better than the bank's previous expectations.