UBS lowers Weibo's target price to 110.4 yuan, maintains "Buy" rating

UBS published a research report indicating that Weibo-SW (09898.HK) third-quarter performance met the revised forecasts. Among them, revenue fell 5% year-on-year, in line with expectations; adjusted net profit decreased by 20%, also in line with expectations. During the period, the gross profit margin narrowed by 412 basis points year-on-year to 76%, which was below expectations, but due to operating expenses being lower than expected, operating profit met expectations.

UBS stated that due to the decline in Weibo's gross profit margin in the third quarter and a more cautious outlook for fourth-quarter revenue, it slightly lowered the company's adjusted net profit forecast for this year by 2%. The firm believes that the company's fundamental factors are largely reflected in the stock price and expects a dividend yield of 8% next year, which is likely to provide downside protection for the stock price. The firm lowered its target price for Weibo (WB.US) on the US stock market from $14.5 to $14.2, maintaining a "Buy" rating, and also lowered its target price for H shares to HKD 110.4