Weibo (WB US) (Neutral) - Tough ad business outlook

研报英文原文证据摘录

Weibo (WB US) (Neutral) - Tough ad business outlook

Global Markets Research

Weibo WB.OQ WB US 30 May 2026

EQUITY: MEDIA & INTERNET

RatingTough ad business outlook Remains Neutral

Target price

Reduced fromMaintain Neutral; target price cut to USD8.10 USD 8.10 USD 9.70

1Q26 earnings beat; topline in line Closing28 May 2026price USD 7.84

Weibo’s (WB) 1Q26 revenue increased 6% y-y in USD terms to USD421mn, in line with both

Bloomberg consensus and our estimates (Fig.1). Its non-GAAP operating profit declined 7% Implied upside +3.3%

y-y to USD120mn, with margin (OPM) down 4.2pp y-y to 28.4%. The OPM was 3.5pp above

the Street consensus, due to a significant decline (-75% y-y) in general and administrative Market Cap (USD mn) 1,925.1

expenses on the back of the recovery of a bad debt. ADT (USD mn) 10.5

Outlook for ad business worsening

Relative performance chartManagement sounded positive about securing an ad budget from AI-related sectors. Also, ad

spending from the auto sector is set to maintain solid growth in 2Q, as per management, as

automakers continue to launch new models despite declining vehicle sales. However, WB has

a cautious stance on ads budget from smartphone advertisers due to uncertainty around the

rollout schedule for new models owing to pricing pressure. Additionally, ad spending from the

online game sector remains weak due to fewer new titles being launched by big game

operators. As such, we now forecast WB’s revenue to grow 3% y-y in USD terms in FY26F,

revised down from 9% y-y growth owing to a weaker retail environment.

FY26E margin likely under pressure on weakening topline and increasing AI investment

WB pointed out that its AI initiative, including AI-powered content creation tools, AI-generated