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<Research> UBS Cuts WB-SW (09898.HK) TP to 85.7; 1Q Results In Line but Outlook Turns Cautious
UBS issued a research report noting that WB-SW (09898.HK) delivered 1Q results in line with expectations, but management turned more cautious on the advertising outlook for 2Q26 an...
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<Research> UBS Cuts WB-SW (09898.HK) TP to 85.7; 1Q Results In Line but Outlook Turns Cautious
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UBS issued a research report noting that WB-SW (09898.HK)  +2.150 (+3.504%)    Short selling $3.24M; Ratio 25.145%   delivered 1Q results in line with expectations, but management turned more cautious on the advertising outlook for 2Q26 and 2H26. UBS expects advertisers to become more prudent amid macro uncertainties and to focus more on return on investment, with budget preference shifting toward performance-based advertising. As a result, the broker lowered its 2Q26 revenue growth forecast to flat YoY or low single-digit YoY growth.

UBS said Weibo's 1Q revenue rose 6% YoY (up 1% YoY in RMB terms). Advertising revenue increased 9% YoY, beating expectations, but was offset by an 11% YoY decline in value-added services revenue. Gross margin fell 5.6 ppts YoY to 72.1%, 312 bps below market expectations. Adjusted operating margin was 28.4%, 322 bps above market consensus, mainly driven by tighter R&D cost control and lower G&A expenses due to reversal of receivables impairment. Adjusted net profit declined 23% YoY, in line with expectations.

Related News Citi Cuts Weibo Corporation (WB.US) TP to USD9.3, Reiterates Buy on Undemanding Valuation
The broker expects margin pressure to persist in 2Q26, citing weaker operating leverage, continued investment in artificial intelligence and video initiatives, and operating expenses related to celebrity and KOL marketing strategies. UBS lowered its 2026 revenue forecast to reflect softer advertiser sentiment amid macro weakness, and cut its 2026 adjusted operating margin forecast by 128 bps to 25%. It also reduced its 2026 adjusted net profit forecast by 16% to USD355 million. UBS maintained a Buy rating on Weibo Corporation (WB.US)      , trimming its US TP from USD12.8 to USD11, and lowering its Hong Kong TP from HKD100 to HKD85.7.(da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-02 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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