Shenwan Hongyuan Group: Initiates coverage on MOBVISTA (01860) with a "Buy" rating, target market cap of US$4.4 billion.

Shenwan Hongyuan Group released a research report initiating coverage on MOBVISTA (01860) with a "Buy" rating and a target market cap of US$4.4 billion. The firm believes that in the medium to long term, the company is expected to achieve steady growth through a more complete product portfolio. Shenwan Hongyuan Group's key points are as follows: Programmatic advertising platform continues to upgrade, Mintegral becomes the core growth engine MOBVISTA focuses on global mobile programmatic advertising. Its core platform Mintegral generated revenue of US$1.12 billion in 2026H1, up 24.3% year-over-year, accounting for 96.5% of the company's total revenue; of which gaming/non-gaming revenue was US$843 million/US$272 million, up 27.5%/15.5% year-over-year, respectively. As of end-June 2026, the number of apps integrated with Mintegral Ads SDK exceeded 120,000, average daily programmatic ad requests exceeded 400 billion, and intelligent bidding products contributed over 90% of Mintegral's revenue. AppLovin review: Data closed loop + algorithm upgrades drive IAP scaling and profitability leap In its early days, AppLovin gradually connected traffic, bidding, attribution, and user value feedback links through its own apps, the MAX aggregation platform, and the Adjust attribution tool, forming a complete data closed loop; after launching Axon2.0 in 2023, its ability to predict long-term user value and judge campaign payback improved significantly, driving the platform to extend from IAA to high-value IAP advertising budgets. As algorithm efficiency and traffic monetization capabilities improved, AppLovin's advertising platform EBITDA margin continued to rise, reflecting the strong operating leverage of programmatic advertising platforms once data and algorithms form a positive cycle. Mobvista draws on AppLovin's path, intelligent bidding extends from IAA to Hybrid/IAP Since 2023, the company has continued to upgrade Target ROAS, Target CPE, Hybrid ROAS, and IAP ROAS, gradually forming an intelligent bidding product matrix covering IAA, Hybrid, and IAP. As model optimization objectives extend from installs and events to ROI and long-term LTV, Mintegral's revenue grew 47.2%/35.9% year-over-year in 2024/2025, respectively, and still grew 24.3% in 2026H1 despite a high base. The firm believes that in the medium to long term, the company is expected to achieve steady growth through a more complete product portfolio. AI Infra upgrades are expected to further improve algorithm efficiency and unlock profit elasticity The company is currently still in a stage of relatively high R&D investment, and the buildout of AI Infra is suppressing operating leverage in the short term; however, as the infrastructure gradually matures, more complex models go live, and intelligent bidding performance improves, traffic acquisition and monetization efficiency are expected to improve further. The company's quarterly gross margin has risen from about 19% in early 2023 to about 22% in 2026Q2, and its adjusted net margin has also improved markedly. Subsequent revenue scale expansion is expected to translate more into profit growth. Investment analysis opinion: Target market cap of US$4.4 billion, initiate coverage with a "Buy" rating The firm estimates that the company will achieve revenue of US$2.532 billion, US$3.530 billion, and US$4.625 billion in 2026-2028E, up 24%, 39%, and 31% year-over-year; and achieve adjusted net profit attributable to shareholders of US$116 million, US$170 million, and US$279 million. The current price corresponds to 2026-2028E PE of 24x/16x/10x, respectively. Referring to the average 2027E PE of comparable companies of about 26x, the firm assigns the company a 2027 PE of 26x, corresponding to a target market cap of approximately US$4.4 billion. Risk warnings Intelligent bidding and IAP/Hybrid product iterations fall short of expectations; returns on AI Infrastructure investment fall short of expectations; intensified competition in the mobile advertising industry; data privacy and overseas regulatory risks.