Morgan Stanley: Expects further deepening of cooperation between MEITU (01357) and BABA-W (09988), with a target price of 15.7 Hong Kong dollars and a rating of "Overweight".

Morgan Stanley released a research report stating that MEITU (01357) recently announced that it has completed the issuance of $250 million convertible bonds to BABA-W (09988). If all convertible bonds are converted, Alibaba will hold a 6.82% stake in Meitu, becoming its third largest shareholder. The bank believes that this development is positive news, expecting further deepening of cooperation between Meitu and Alibaba, particularly in the field of e-commerce design, which can generate strong synergies; the target price for Meitu is now set at HK$15.7 with a "buy" rating.