Goldman Sachs released a research report indicating that the performance of Weibo-SW (09898.HK) in the second quarter roughly met the bank's expectations, but exceeded market expectations. After attending the company's earnings call, the management has a more cautious outlook on advertising revenue for the second half of this year and beyond, given the weak macro environment and the contraction of consumer brand advertising budgets. The management expects stable advertising revenue from cosmetic brands in the fourth quarter of this year, which provides some reassurance. The bank pointed out that excluding the impact of forex, advertising revenue for the first and second quarters of this year remained flat and declined by 1% year-on-year, respectively. Even with a slight increase in advertising revenue from the Paris Olympics, the bank predicts a year-on-year decline of 4% and 5% in the third and fourth quarters of the company, respectively. Advertising revenue for 2025 and 2026 is expected to remain flat, leading to a downward revision of the bank's revenue forecasts for the company in the years 2024 to 2026 by 5%, 8%, and 11%, respectively. The bank also lowered its EPS forecasts for the company's ADRs by 2%, 7%, and 10%.

The bank also mentioned that the management indicated that they will continue to distribute dividends in cash in the coming years. The bank believes that a higher dividend payout ratio or improved earnings per share outlook is necessary to improve the current stock price performance. The bank has lowered the target price for Weibo H-shares from 78 yuan to 73 yuan and maintained a neutral rating.