TCOM - Mizuho's Chinese Internet checks spotlight names for rebounds

A round of checks on Chinese Internet names has Mizuho bullish as it sees rebounds in cloud spending, travel and e-commerce ahead, bringing reason for optimism. And checks have it keeping Baidu (BIDU) as its top Chinese Internet pick overall. The firm is expecting revenues to come in in line with expectations for the first quarter, due to recovery in key verticals - though there's potential upside in Cloud in Q2, thanks to the initiation of several enterprise deals. But margins face some downside revision risks, the firm says, as consensus core operating margin for the year (29%) doesn't fully reflect the company's investments in Cloud and Autonomous Driving/smart transportation. Still, it expects organic margins ex-investments - and the long-term outlook - to stay unchanged. The firm sees core operating margin at 25% for Q2 and full-year 26%. Based on a sum-of-the-parts analysts it has a price target of $350

For further details see:

Mizuho's Chinese Internet checks spotlight names for rebounds