The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0800 GMT - Baidu's generative artificial intelligence revenue could rise gradually and mitigate the impact of subdued ads revenue, CCB International analyst Cathy Chan says in a research note. GenAI and foundation models accounted for 6.9% of AI cloud revenue and have been a key revenue driver for Baidu in 1Q, the analyst says. Once Baidu finishes integrating its Ernie GenAI model in its search engine, that could also boost the muted ads revenue, she adds. CCB maintains a outperform call on Baidu while raising its H-share target to HK$139.85 from HK$138.10 in view of the long-term potential of the AI-driven business. Shares are last at HK$107.30. (sherry.qin@wsj.com)
0638 GMT - NetLink NBN Trust remains a high-yielding and safe-haven stock, thanks to its stable revenue streams and operating cash flows, UOB Kay Hian analysts say in a research note. Given management is aware of this profile, key criteria of any potential new investments by the company in the near term would probably have to include the country risk premium, the analysts say. Also, the Singapore operator of a nationwide fibre network has sufficient debt scope to drive its acquisition ambitions without compromising cash flow and dividends, the analysts add. The brokerage maintains the stock's buy rating but trims the target price to S$0.98 from S$1.01 to reflect a valuation rollover. Shares are 0.6% lower at S$0.86. (ronnie.harui@wsj.com)
0136 GMT - Maxis Bhd.'s share-price recovery is likely to be capped by uncertainties surrounding Malaysia's transition to a dual 5G network from a single wholesale-network model, given the unknown transition details, Affin Hwang IB analyst Isaac Chow says in a note. Despite his overall optimism regarding Maxis's cost-optimization efforts and its cautious capital-expenditure approach, subdued market conditions, limited dividend yield and uncertainties surrounding Malaysia's 5G landscape are expected to restrain any significant recovery in its share price. Maxis's shares have fallen 14% in the past 12 months. Affin Hwang raises Maxis's target price to MYR4.05 from MYR4.00 while maintaining a hold rating on the stock. Shares are 1.1% higher at MYR3.76.(yingxian.wong@wsj.com)
0049 GMT - StarHub's group margins are likely to improve in 2H as investment costs taper off, UOB Kay Hian analysts Chong Lee Len and Llelleythan Tan Yi Rong say in a note. The Singapore telecom company is reaching the tail-end of its DARE+ investments program, the analysts say. About S$15 million of DARE+ investments were incurred in 1Q and about S$85 million remains for this year, the analysts note. The company is now frontloading the remaining DARE+ investments to 2024 and this is expected to be completed by end 4Q, they add. UOB KH maintains a buy rating on the stock with a target price of S$1.41. Shares last closed at S$1.26.(amanda.lee@wsj.com)
0037 GMT - Megaport keeps its bull at Jefferies, where analyst Roger Samuel thinks it's just a matter of time until key performance indicators begin improving again. Samuel acknowledges that the Australian telco-services provider's operational metrics have been slow to ramp up following the addition of new sales staff, but sees an inflection point on the horizon, mostly likely within three or fiscal quarters. Despite increased marketing spend, Samuel is increasingly confident that Megaport has costs under control given its negotiating power with data centers and rigor in calculating sales commissions. Jefferies lifts target price 6.0% to A$17.51 and keeps a buy rating on the stock, which is up 1.5% at A$14.91. (stuart.condie@wsj.com)
2356 GMT - Dicker Data's 1Q sales materially fell short of UBS's expectations. Dicker Data reported a 10% decline in quarterly revenue, whereas UBS had forecast a 3% improvement and consensus hopes were even more bullish. "The precise drivers of the sales decline are somewhat unclear from the release," says analyst Apoorv Sehgal, who plans to review Dicker Data's valuation. "Theoretically, group sales growth should improve in 2Q given Dicker Data is cycling an easier comp (+5%) and the order backlog had largely been cleared by the end of 1Q of 2023." UBS has a neutral call on Dicker Data. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
May 20, 2024 04:20 ET (08:20 GMT)
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