Many large banks are bullish on JOYY, Inc. Sponsored ADR Class A (JOYY.US): Social entertainment regaining growth, advertising and e-commerce becoming new engines, target price as high as $90.

With the release of the first quarter report for 2026, several major banks have recently shown optimism towards JOYY, Inc. Sponsored ADR Class A group (JOYY.US). UBS Group AG, Citigroup, CITIC Securities, and Daiwa Securities have released research reports, maintaining or reiterating a "buy" rating, and generally increasing their performance and valuation expectations for the company. Among them, UBS Group AG has defined the first quarter of 2026 as a "turning point" for the social entertainment business; while CITIC Securities has a target price of $90, the highest among mainstream institutions in the market. Social entertainment business approaches a "turning point," institutions optimistic about continuing growth trends The first quarter financial report for JOYY, Inc. Sponsored ADR Class A shows that social entertainment (including live streaming) revenue was $400 million, a 3.2% year-on-year increase. The core live streaming revenue was $380 million, a 2.4% year-on-year increase. UBS Group AG pointed out in the report that this business has seen a year-on-year growth and defined it as "a turning point" (1Q an inflection point). UBS Group AG's analysis believes that this turning point trend is mainly due to the company's implementation of live streaming ecosystem optimization strategies. Daiwa Securities and CITIC Securities also share a similar view, believing that the company has pushed the live streaming business back onto a growth track through adjustments in content ecology and focusing on high-value users. In terms of operational indicators, CITIC Securities cited company performance data, stating that live streaming revenue in developed markets in the first quarter increased by 11.2% year-on-year, with the number of core live streaming paid users reaching 1.54 million, a 5.9% year-on-year increase, and ARPPU at $214.1. At the same time, AI is gradually penetrating various aspects of the live streaming ecosystem. As of April 2026, AI-generated interactive virtual gifts accounted for 34% of virtual gift consumption on the Bigo Live platform. Institutions generally believe that AI capabilities are continuously improving platform content supply, user interaction, and monetization efficiency, providing new drive for long-term growth of the live streaming business. Optimization of business revenue structure, increasing contributions from advertising and SHOPLINE In addition to the recovery of growth in the social entertainment business, institutions also believe that BIGO Ads and SHOPLINE are gradually becoming JOYY, Inc. Sponsored ADR Class A group's new growth engines, transforming the company from a single live streaming platform to a diversified technology company. UBS Group AG pointed out in the report that JOYY, Inc. Sponsored ADR Class A is evolving into an AI-empowered technology company, with the To B sector (BIGO Ads and SHOPLINE) expected to contribute over 50% of total revenue by 2028, while this proportion was close to 30% in the first quarter. CITIC Securities also noted that the proportion of non-live streaming revenue in the first quarter has increased to 31.6%, indicating continued optimization of the business structure. In the first quarter, BIGO Ads revenue was $125 million, a 55.6% year-on-year increase, with third-party ad revenue up 78.8% year-on-year. CITIC Securities mentioned that the increase in SDK ad requests was 109% year-on-year, web ad budgets and IAA ad budgets increased by 90% and 97% year-on-year, respectively, indicating strong growth on both the supply and demand sides of the ad platform. The company's management reiterated that the target revenue for the three-party advertising business in 2028 is $1 billion. Daiwa Securities is optimistic about the outlook for the advertising business, with earnings per share forecasts for 2026-2028 being 3% to 11% higher than market consensus, mainly based on increased confidence in advertising revenue. SHOPLINE's revenue in the first quarter was $30.5 million, a 16.1% year-on-year increase, with a gross profit margin of 51.5%. The company expects the growth rate of this business in the second quarter to exceed 25%. UBS Group AG believes that ongoing expansion of cross-border merchants, expansion into new markets such as the United States, and increased penetration of value-added services such as payments and marketing will provide stronger growth momentum for SHOPLINE in the coming quarters. Significant increase in shareholder returns, strong cash reserves strengthening value proposition Another key factor of interest to institutions is the adjustment of the shareholder return plan. The company has increased the total shareholder return for the three years from 2026 to 2028 from $900 million to $1.5 billion, including $900 million in dividends and up to $600 million in buybacks. China CITIC Bank calculated that the three-year total return rate is 46.5%, with a simple annualized return rate of 15.5%, including an annualized dividend yield of 9.3% and an annualized buyback rate of 6.2%; dividends totalling $75.6 million have been paid out in the first quarter, with cumulative buybacks exceeding $87 million, and Citigroup predicts further upward potential for buybacks within the year. As of the end of the first quarter, JOYY, Inc. Sponsored ADR Class A had net cash of $3.175 billion, essentially equal to the company's total market value. Institutions believe that the combination of "high cash reserves + high dividends" provides a solid safety cushion for the stock price. In terms of valuation, China CITIC Bank references industry valuations, giving a highest target price of $90 based on a 16x 2026 Non-GAAP PE; UBS Group AG prices using the SOTP segment valuation method result in a target price of $83, Citigroup using the same method gives a target price of $78, and Daiwa Securities using a 13x PE valuation gives a target price of $85. The company has guided second-quarter revenue to be between $562 million and $581 million, a year-on-year increase of 10.7%-14.4%, exceeding market expectations, with Non-GAAP operating profit and EBITDA expected to grow by 10%-20% year-on-year. With the stabilization of the core business, volume growth in new businesses, and high dividends as supporting factors, institutions continue to be optimistic about the company's future performance and potential for valuation recovery.