China’s live streaming sector could return to growth this year after losing 2% in 2022, and shares of Hello Group can capitalize on that trend, according to JPMorgan. Analyst Daniel Chen upgraded the stock to overweight from neutral Friday. He also raised his price target on the stock to $13 per share from $5, implying there’s 56% upside from Thursday’s close. Chen said Hello Group is among the companies purely focused on streaming, adding the growth of some new initiatives as well as improved online sentiment could help the company’s revenues grow in 2023. MOMO YTD mountain MOMO was a standout among US traded Chinese stocks for JPMorgan, and the company could return to positive revenue growth in 2023. The continued re-opening of China’s economy as well as a larger supply of games and a looser regulatory framework will help the country add 1% year over year in live streaming, with short video platforms leading the charge, Chen said. Hello Group isn’t the only company that will benefit from a rebound in live streaming in China. “As short video platforms (Kuaishou/BILI) continue to gain time share from other platforms, we expect them to achieve decent live streaming revenue growth in 2023 (JPMe Kuaishou/BILI live streaming revenue +8%/+25% YoY),” JPMorgan surveillance senior officer Daniel Chen wrote on Friday. Some of the firm’s other top picks in the Chinese live streaming space include Kuaishou , Bilibili , Tencent Music Entertainment , and Joyy . Kuaishou was Chen’s top pick, as the company continues to grow and should achieve exceptional profitability this year. “We are positive on the strong growth outlook for its various business segments (ads, eCommerce, live streaming) and expect it to achieve full-year profitability in 2023,” Chen said. — CNBC’s Michael Bloom contributed to this report.
