Huachuang Securities: Initial Coverage of MOBVISTA (01860) with a "Strong Buy" Rating and a Target Price of HK$17.7

Huachuang Securities released a research report stating that MOBVISTA (01860) is one of the global top third-party programmatic advertising companies, with network effects and AI infrastructure resonating to build a growth flywheel. The firm is optimistic about the company's growth potential in the global third-party programmatic advertising market, as well as the next round of growth brought by IAP product volume. It is expected that the company's revenue will reach $2.7 billion, $3.7 billion, and $4.6 billion in 2026-2028, with adjusted net profits of $150 million, $260 million, and $380 million. Using the PE valuation method, the company is given a 25x target PE for 2026, corresponding to a target market value of $3.7 billion, or approximately $28.7 billion Hong Kong dollars, with a target price of HK$17.7. First coverage, with a "strong buy" rating. Huachuang Securities' main points are as follows: MOBVISTA is a global advertising marketing company, focusing on programmatic advertising and long-tail traffic. The company was founded in 2013 and initially started with non-programmatic performance advertising. In 2016, it launched the programmatic advertising platform, Mintegral, entering the programmatic advertising market. In 2019, it proposed building a SaaS tool matrix to optimize the marketing ecosystem, covering statistical analysis, cloud cost optimization, and other scenarios. Mintegral is the company's core platform, where network effects and AI infrastructure resonate to build a growth flywheel. Intelligent bidding products drive high revenue growth for the company, and IAP products are expected to drive a new round of growth. The main profit model of the Mintegral platform is to earn the price difference by algorithmically matching advertisers with traffic media for transactions. The programmatic advertising industry has significant flywheel effects, with the company accumulating over the years a growth flywheel of "traffic-data-ROI-budget." In 2025, the company's integrated SDK reached 117,000 apps, with daily ad request volume exceeding 400 billion times. In Singular's 2026 ROI index, the company ranked among the top four in global entertainment/tools/on-demand services/games categories. The company continues to increase AI infrastructure investment, promoting projects such as the "Star Gate Project" and component-based transformation, focusing on research and development personnel training and incentives to ensure algorithmic leadership with high-performance foundational infrastructure. Mintegral has gone through the platform building period (2016-2018), algorithm optimization and ecosystem expansion period (2019-2022), and entered the intelligent bid phase in 2023, launching IAA ROAS, Target CPE, Hybrid ROAS, and IAP RoAS products, gradually expanding from IAA advertiser budgets to mixed monetization and IAP advertiser budgets. Benefiting from the proliferation of intelligent bidding products, the company's revenue growth rate in 2024Q3-2025Q2 was 55%, 63%, 46%, and 48% year-on-year. With the gradual proliferation of IAP ROAS products in the future, it is expected to drive the company's revenue into a new round of high growth period. The programmatic and third-party advertising markets continue to expand, and the company has become one of the top players in the third-party programmatic advertising market. The global mobile app advertising market is vast, with the global mobile app advertising market reaching $407 billion in 2025, as estimated by Statista and Newzoo, and expected to reach $663 billion by 2030. From the perspective of transaction methods, benefiting from the development of big data and AI technologies, programmatic advertising has become mainstream, with MAGNA estimating that the global programmatic advertising market share reached 85%-90% in 2025. In terms of platform type, walled garden platforms such as Meta and Google account for about 3/4 of the market, with the rest mainly third-party advertising platforms. Thanks to anti-monopoly/privacy protection laws, technology-driven developments, and the needs of small and medium developers, the market share of third-party advertising platforms has increased from 15% in 2020 to 25% in 2025. According to the firm's calculations, Mintegral has become one of the top players in the third-party programmatic advertising market, with a market share of 1.9% in the global mobile advertising market in 2025, second only to AppLovin's 5.4% and The Trade Desk's 2.8%. Risk factors: Global mobile advertising industry outlook not as expected, technological iterations and algorithmic effectiveness not as expected, commercialization of intelligent bidding products not as expected, intensified industry competition, data privacy and platform policy changes, overseas policy and compliance risks, etc.