J.P. Morgan Chase is optimistic about JOYY.US (JOYY.US): Target price of $98, giving it an “increase in weight” rating

The Zhitong Finance App learned that recently, the international investment bank J.P. Morgan (J.P. Morgan) released the latest research report to give the stock rating of the world's leading technology company JOYY.US (JOYY.US) stock “increased holdings”, with a target price of 98 US dollars. Based on the August 12 closing price of $74.16, the target price implied an upward margin of about 32%.

Research reports indicate that since January 2025, Huanju Group's stock price has significantly outperformed the KWEB Index (Huanju Group rose 101%, KWEB rose 6%). The bank believes that there are two core factors behind this performance: impressive shareholder returns and steady growth in BIGO Ads advertising business, both of which will jointly drive the company's stock price upward.

Shareholders' annualized return is about 15%, and sufficient cash reserves support long-term sustainable feedback

The report focuses on Huanju Group's shareholder return policy. According to the report data, since 2020, Huanju Group's cumulative return to shareholders has exceeded 2 billion US dollars, accounting for more than 50% of the company's total market value; in 2025, the company returned a total of 332 million US dollars to shareholders through cash dividends and share repurchases, accounting for 9% of the corresponding market value. In May 2026, Huanju Group updated its shareholder return plan. It plans to complete shareholder feedback totaling US$1.5 billion by the end of 2028, with 60% distributed as quarterly dividends and 40% for share repurchases. J.P. Morgan estimates that this plan “means an annual shareholder return of 15% per year.”

The research report points out that this sustainable return is supported by the company's abundant net cash reserves and strong ability to generate cash flow. J.P. Morgan predicts that the company's free cash flow in 2026 and 2028 will be US$220 million and US$317 million, respectively. Based on this, analysts believe that Huanju has sufficient capital to maintain sustainable shareholder returns after 2028, and further estimates that if the stock price rises 50% from the current price, the company can still achieve 10% annualized shareholder returns.

BIGO Ads revenue increased more than fivefold, and industry expansion and data advantages highlight growth potential

At the business level, J.P. Morgan gave high praise to the growth prospects of BIGO Ads.

Research reports show that BIGO Ads revenue has increased more than fivefold since 2023 and has maintained rapid growth, increasing 56% year-on-year in the first quarter of 2026. Meanwhile, MobVista and AppLovin related businesses increased by 33% and 59%, respectively, during the same period, indicating that the global open internet programmatic advertising market is still booming. J.P. Morgan believes that with the continuous expansion of the industry and the support of its own data and algorithm capabilities, BIGO Ads revenue will achieve a compound annual growth rate of 39% from 2027 to 2028, and drive the company's overall net profit and operating profit to achieve 19% and 30% year-on-year growth, respectively.

J.P. Morgan also pointed out that BIGO Ads's proprietary data in the digital entertainment (Likee/Bigo Live) and e-commerce (SHOPLINE) vertical fields provides a differentiated data foundation for its advertising model and also provides a strategic advantage for the growth of BIGO Ads. Furthermore, with the continuous optimization of algorithms and the improvement of advertising efficiency, BIGO Ads is expected to further improve monetization efficiency while maintaining good RoAS for advertisers, thereby driving profit growth in the advertising sector and the group as a whole.

According to the report, BIGO Ads has formed a self-reinforcing healthy growth flywheel: continuously expanding traffic generates more user data, and then optimizes AI models to bring advertisers a higher return on advertising expenses, thereby attracting more advertising budgets and further driving traffic expansion.

Based on the above logic, J.P. Morgan Chase used the Segment Plus Valuation Method (SOTP) to give Huanju Group a target price of 98 US dollars. Among them, the digital entertainment business is valued at 6 times the expected price-earnings ratio in 2027; BIGO Ads is valued at 1 times the 2027 expected price-earnings ratio, which is 0.7 times higher than the comparable company Mobvista. J.P. Morgan believes that this valuation premium is mainly due to the faster growth of BIGO Ads; at the same time, the company's abundant net cash also forms an important support for the valuation, accounting for 64% of the total SOTP valuation. J.P. Morgan Chase summed up in the research report that the core logic of optimistic Huanju Group is that the current shareholder return plan corresponds to an annualized shareholder return of about 15%, with abundant net cash and steady operating cash flow to support long-term sustainable shareholder returns; at the same time, in the rapidly growing programmatic advertising market, BIGO Ads is becoming the company's new growth engine with differentiated data and algorithm advantages.