Shen Wan Hongyuan: Shouyu Huiliang Technology (01860) has a target market value of 4.4 billion US dollars for the “buy” rating

The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that it covered Huiliang Technology (01860) for the first time and gave it a “buy” rating, with a target market value of 4.4 billion US dollars. The bank believes that in the medium to long term, the company is expected to achieve steady growth through a more complete product layout.

Shen Wan Hongyuan's main views are as follows:

Programmatic advertising platforms continue to upgrade, and Mintegral has become the core growth engine

Huiliang Technology focuses on global mobile programmatic advertising. The core platform Mintegral 2026H1 achieved revenue of US$1.12 billion, an increase of 24.3% year-on-year, accounting for 96.5% of the company's total revenue; of these, game/non-game revenue was US$843/272 million, respectively, an increase of 27.5%/15.5% year-on-year. By the end of June 2026, the number of applications connected to the Mintegral Ads SDK exceeded 120,000, the average number of programmatic ad requests per day exceeded 400 billion, and smart bidding products contributed more than 90% of Mintegral's revenue.

AppLovin Review: Closed Data Loop+ Algorithm Upgrades Drive a Jump in IAP Volume and Profitability

In the early days, AppLovin gradually opened up traffic, bidding, attribution and user value feedback links through its own application, MAX aggregation platform, and Adjust attribution tools, forming a complete data closed loop; after the launch of Axon 2.0 in 2023, users' ability to predict long-term value and make marketing and recycling decisions improved significantly, driving the platform's extension from IAA to high-value IAP advertising budgets. As algorithm efficiency and traffic monetization capacity improve, the AppLovin advertising platform's eBITDA profit margin continues to rise, reflecting the strong operating leverage of programmatic advertising platforms after data and algorithms form a positive cycle.

Convergence draws on the AppLovin path, and smart bidding extends from IAA to hybrid/IAP

The company has continued to upgrade Target ROAS, Target CPE, Hybrid ROAS, and IAP ROAS since 2023, gradually forming an intelligent bidding product matrix covering IAA, Hybrid, and IAP. As model optimization goals extend from installs and events to ROI and long-term LTV, Mintegral's 2024/2025 revenue increased 47.2%/35.9% year over year, respectively, and 2026H1 continued to grow 24.3% at a high base. The bank believes that in the medium to long term, the company is expected to achieve steady growth through a more complete product layout.

The AI Infra upgrade is expected to further improve algorithm efficiency and open up profit elasticity

Currently, the company is still in a high R&D investment stage, and AI Infra construction suppresses operating leverage in the short term; however, with the gradual maturity of infrastructure, the launch of more complex models, and the improvement of intelligent bidding effects, traffic procurement and monetization efficiency is expected to further improve. The company's gross margin for a single quarter has increased from about 19% at the beginning of 2023 to about 22% in 2026Q2. The adjusted net margin has also improved markedly, and the subsequent expansion in revenue scale is expected to translate more into profit growth.

Investment analysis: The target market value is 4.4 billion US dollars, and the first coverage gives a “buy” rating

The bank expects the company to achieve revenue of US$25.32, 35.30, and 4.625 billion US dollars in 2026-2028E, an increase of 24%, 39%, and 31% year-on-year; to achieve adjusted net profit of US$1.16, 1.70, and 279 million US dollars. The current price for 2026-2028E PE is 24x/16x/10x respectively. Referring to the average PE of comparable companies in 2027e, the company was given 26 times PE in 2027, corresponding to a target market value of about 4.4 billion US dollars.

Risk Alerts

Intelligent bidding and IAP/hybrid product iterations fall short of expectations; AI infrastructure investment returns fall short of expectations; increased competition in the mobile advertising industry; data privacy and overseas regulatory risks.