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<Research Report>JPM Initiates Kuaishou at Overweight with $120 TP; 2022 Dotcom Top Picks Tencent, Baidu, JD, Meituan, Netease
JPMorgan initiated KUAISHOU-W (01024.HK) at Overweight, with a target price of $120. KUAISHOU-W's share price accumulated a decrease of 79% from its peak in mid-February 2021, mainly due to the disappointing quarterly results and lower earnings forecast. The broker, however, estimated KUAISHOU-W to enter a positive earnings revision cycle in the coming few quarters, which will likely drive up its share price.
JPMorgan's 4Q21E and 2022E adjusted EPS of KUAISHOU-W exceeded the market consensus by 31% and 8%, respectively. Viewing the stock as the best contrarian play among the Chinese dotcoms this year, the broker advised the investors to seize the opportunity and accumulate the stock before the announcement of 4Q results.
On another note, JPMorgan expressed in the 2022 outlook report for Chinese dotcoms that the visibility of the financial outlook and earnings forecast direction of the sector remains low at the moment and that investors are advised to be selective on trends and stocks with high certainty events that are not yet priced into the current share price. The broker's top picks for the internet sector include KUAISHOU-W, TENCENT (00700.HK), BIDU-SW (09888.HK), JD-SW (09618.HK), MEITUAN-W (03690.HK) and NTES-S (09999.HK).
AAStocks Financial News
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