The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0457 GMT - NetEase's PC games may overtake mobile games as the key growth driver in the near term, say HSBC analysts in a research note. HSBC cuts its mobile game revenue forecast for NetEase. The company's PC game revenue has been supported by robust results from Blizzard's "World of Warcraft." Higher contributions from the lower-margin Blizzard games may weigh on NetEase's bottom line. "But we like NTES's game development capability and efforts to diversify into more high-DAU titles, which should pave way for more sustainable growth in the long run," the bank says.It maintains a buy call on NetEase but lowers its ADR target to US$110.00 from US$120.00. The ADRs last closed at US$78.89. (sherry.qin@wsj.com)

0428 GMT - Meituan will likely deliver stronger earnings in 3Q, Sealand Securities analysts say in a research note. The Chinese shopping platform's revenue could rise 20.5% on year for the three months ended September, the analysts say. That is expected to be supported by 15% revenue growth in its core food-delivery business and 42% revenue growth in the Shangou business, Meituan's quick-commerce arm, they say. The analysts keep a buy rating on the stock, with a target price of HK$250.00. Shares last traded at HK$188.00. (tracy.qu@wsj.com)

0355 GMT - LG Electronics' core home-appliance business could bear the brunt of higher transportation costs in 2025, Nomura analysts Eon Hwang and Heesoo Min write in a note. The South Korean consumer-electronics giant's H&A division could see operating profit slump 21% next year amid concerns about rising container ship freight rates, they say. The company's push for new businesses--including heating, ventilation and air-conditioning systems for corporate clients as well as home-appliance subscription services--is encouraging but not yet good enough, they add. Nomura cuts its target price for the stock by 8.3% to KRW110,000 and keeps a neutral rating. Shares are 4.4% lower at KRW92,900. (kwanwoo.jun@wsj.com)

0134 GMT - SK Hynix's earnings are set to improve further in 4Q following its strong 3Q results, Daiwa Capital analyst S.K. Kim writes in a note. Increased sales of premium high-bandwidth-memory products and higher DRAM chip prices are expected to drive the South Korean memory chip maker's earnings improvement, Kim says. SK Hynix says HBM products could account for 40% of its DRAM revenue in 4Q, up from 30% in 3Q. Daiwa raises its 2024 net profit forecast for the company by 1.9%. The brokerage increases its target price for the stock by 15% to KRW265,000 and keeps a buy rating. Shares are 3.2% higher at KRW204,500. (kwanwoo.jun@wsj.com)

0123 GMT - WiseTech's size, strength and growth runway should help the logistics-software developer uncover high-quality candidates in its search for a new CEO, RBC Capital Markets analyst Garry Sherriff says. He sees Richard White's departure as CEO and appointment as a long-term consultant as a positive circuit breaker following media allegations against the business's co-founder. Sherriff warns that White's continued involvement could be a complicating factor for his successor, adding that lines between focus and influence need to be clearly delineated by the board. RBC lifts its price target by 8.7% to A$125.00 and raises its recommendation to outperform from sector perform. The stock is up 14% at A$113.50. (stuart.condie@wsj.com)

2218 GMT [Dow Jones]--WiseTech's separation of governance and strategy helps secure the logistics-software provider a new bull at Citi despite uncertainty over how shares will react to its change of CEO. Analyst Siraj Ahmed concedes that founder Richard White's move to a full-time consultancy role may prompt an initial fall in the stock, but he doesn't foresee any changes to execution and strategy over the next three years. Ahmed tells clients in a note that he had expected White's role to change in this way eventually. Citi cuts its target price 9.8% to A$124.50 and raises its recommendation to buy from neutral. Shares are at A$99.37 ahead of the open. (stuart.condie@wsj.com)

2133 GMT - Australia's S&P/ASX 200 is likely to open higher, paring the benchmark index's losses so far this week. ASX futures are up by 0.2%, suggesting a bounce from Thursday's 0.1% slip. The ASX 200 is 0.9% lower so far this week and on track for its worst month since April amid uncertainty over the likely pace of domestic interest-rate cuts. WiseTech Global shares could be a focus for investors after the logistics-software provider announced that its founding CEO was stepping down. The stock is down 19% so far this week. U.S. equities were mixed. The DJIA lost 0.3%, but the S&P 500 and Nasdaq Composite gained 0.2% and 0.8%, respectively. (stuart.condie@wsj.com)

1935 GMT - October auto sales volumes in the U.S. are expected to rise from the prior month and from October of 2023, according to Cox Automotive. October sales volumes are forecast to rise 10% from September, and to be nearly 8% higher than sales in October 2023. The new-vehicle sales pace in October is expected to finish at 15.8 million, on par with September's pace and up from last October's 15.3 million pace, Cox says. Charlie Chesbrough, senior economist at Cox Automotive, says recent extreme weather events in the U.S. southeast may cut into sales, although recent interest rate cuts and stock market gains will likely provide some support to the market. (stephen.nakrosis@wsj.com)

1746 GMT - Rogers Communications is getting creative with its infrastructure to raise money to pay down debts. The Canadian telco is selling a minority ownership stake in a part of its wireless network infrastructure that transports data from the cell towers to the core of its network. This isn't very common in Canada where telcos own all their infrastructure, says TD Cowen's Vince Valentini, but it's more common in the U.S. and in Europe. Rogers will continue to fully own and control the entire national wireless network, including the portion that is being sold, while the investor is paying C$7 billion for this minority stake. "Rogers isn't giving up control of any assets, so there should be neither any strategic implications from the transaction, nor any impact to consolidated Ebitda," Valentini says. (adriano.marchese@wsj.com)

1557 GMT - It's hard to value Tesla's robotaxi and humanoid robot initiatives given the variability around the timing and ultimate success of those ventures, UBS analysts say in a research. They're still impressed with the company's progress on both efforts, but the market seems to already be ascribing a $500 billion valuation to the AI ventures, according to the note. The analysts are sticking to their sell rating on the stock, though they expect the company's bulls will jump on the better-than-expected 3Q results on hopes that Tesla is past the nadir on profitability. Tesla surges 19% to $253.93. (dean.seal@wsj.com)

1522 GMT - Investment in AI and green energy will add vast quantities of new technology like advanced data centers and greener power plants to the U.S. capital stock. That raises a key question for U.S. growth, says Satyam Panday of S&P: How soon will this technology need replacing? If data centers and new power plants prove they can last for a long time with minimal reinvestment, more funds can be invested toward new growth, instead of replacing existing tech, Panday says. But if new-economy technology turns out to depreciate quickly, the need to replenish capital stock will sap more resources from investments that produce additional growth. Figuring out that depreciation factor is a key current challenge in economic projection, Panday says. (matt.grossman@wsj.com; @mattgrossman)

1502 GMT - Are U.S. executives spending too much on AI investments that may not pan out? Or will the technology legitimately boost productivity? There's little cause to second-guess the scale of the investment, says Satyam Panday, chief economist for the U.S. and Canada at S&P. "These are profit-maximizing business leaders who have to speak with their shareholders, and they are putting in a lot of money," Panday says. "It feels like it may be a little too rich, but if it gives us this nice technology boost in the way we work, we should be seeing some productivity gains." (matt.grossman@wsj.com, @mattgrossman)

(END) Dow Jones Newswires

October 25, 2024 04:20 ET (08:20 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.