HSBC: Weibo Still A Buy, Becoming 'Increasingly Important' In Alibaba Ecosystem

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In a report published Friday, HSBC analyst Andy Hargreaves maintained a Buy rating on
Weibo Corp (ADR)WB
, while reducing the price target from $22 to $21, noting the company's closer cooperation with
Alibaba Group Holding LtdBABA
. "Weibo has 89m daily active users, mostly young (50% of its users less than 25 years old) and geographically diverse (only 25% of its users are in Tier 1 cities). Weibo users seek information and are influenced by the platform's 8m key opinion leaders (KOL)," analyst Andy Hargreaves wrote. The company is now developing verticals that are closely integrated with Alibaba. "For example, Weibo's movie page allows celebrities and KOL to promote films. Youku and SINA provider trailers and tickets can be purchased via Tabao Movies," the HSBC report said. Hargreaves believes that Alibaba can boost traffic for Weibo's video content, while the latter can capture "larger budgets from the studios and FMCG [fast-moving consumer goods] and auto." Weibo already enjoys the position of an important channel for Alibaba to promote its quarterly promotional events. Weibo also provides closed loop transactions for Taobao merchants. "This integrated approach for key verticals should tie Weibo more closely with Alibaba," Hargreaves added.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsAndy HargreavesHSBC
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