Morgan Stanley released a report stating that Weibo (WB.US) second-quarter performance met expectations, but it is expected that advertising revenue in the second half of the year will decline by 4 to 5% when calculated in RMB. The skincare and cosmetic vertical markets continue to be a drag. With the boost from the Olympics, it is expected that the third-quarter business performance will be slightly better than the fourth quarter. The bank expects non-GAAP operating profit to decline by 9% in the second half of the year, due to operating expenses, Olympic sales and management, and investments.

Morgan Stanley has lowered its revenue forecast for Weibo from 2024 to 2026 by 1 to 5%, reflecting weakening consumer appetite and the severe competitive threat of short video platforms, among other factors. Sales and marketing expenses are assumed to be reduced by 1 to 4% to reflect the company's adoption of a more aggressive investment return-driven channel strategy. The target price has been lowered from $8 to $7.5, and the target P/E ratio for the stock in 2025 is still 4.5 times, the lowest in the Chinese Internet industry. The rating is 'underweight'.