Meta Platforms(US:META) Guotai Junan Securities·2024-08-04 08:01Investment Rating - The report maintains a "Buy" rating and raises the target price to $577 [51][24]. Core Insights - The company reported better-than-expected Q2 results, driven by strong growth in its Family of Apps (FoA) and AI-enabled advertising, with total revenue reaching $39.071 billion, a year-on-year increase of 22% [51][17]. - The gross margin stood at 81%, with a net profit of $13.465 billion, reflecting a net profit margin of 34%, which is a 10 percentage point increase year-on-year [51][54]. - The company plans to significantly increase capital expenditures to advance its AI initiatives, with Q2 capital expenditures at $8.5 billion and a target of $37-40 billion for Q3 [51][17]. Financial Data 1. Performance Overview - Revenue and net profit exceeded expectations, with a gross margin of 81% and a net profit margin of 34% [51][54]. - The operating profit for Q2 was $14.847 billion, a year-on-year increase of 58% [51][54]. 1.1. Family of Apps - Revenue from the Family of Apps reached $38.718 billion, up 22.05% year-on-year, with operating profit of $19.335 billion, a 47.25% increase [51][54]. - Advertising revenue grew by 21.69%, while other revenue surged by 72.89% [51][54]. 1.2. Virtual Reality Labs - Revenue from the Virtual Reality Labs declined to $353 million, with an operating loss of $4.488 billion, reflecting a 20.03% increase in losses year-on-year [51][54]. 1.3. Profit Forecast - The report updates the GAAP net profit forecast for 2024-2026 to $53.831 billion, $62.489 billion, and $69.117 billion, respectively, with corresponding PE ratios of 23.73X, 20.44X, and 18.48X [51][23].