Meta Platforms(US:META) Haitong Securities International·2025-04-16 09:32Investment Rating - Initiate with OUTPERFORM rating [1][2] Core Views - Meta Platforms is a global social media giant with over 3 billion monthly active users, transitioning towards the metaverse and generative AI, with a strong focus on advertising revenue [3][10] - The company is expected to achieve significant revenue growth driven by AI-enhanced advertising efficiency and a robust user base, despite facing competition from emerging platforms like TikTok [6][10] Company Overview - Meta Platforms, originally Facebook, has evolved from a campus social network to a leading social media entity, with core products including Facebook, Instagram, WhatsApp, Messenger, and Threads [9][10] - The company generates approximately 97% of its revenue from advertising, leveraging its vast user data for targeted ad placements [3][10] Application Family Business - The Family of Apps segment includes major platforms like Facebook and Instagram, collectively reaching over 3 billion users, with advertising revenue for 2024 projected at $160.6 billion, a 21.7% increase year-over-year [26][33] - Instagram's Reels feature has successfully attracted younger users, increasing daily usage time among the 18-29 age group [28][32] AI Strategy - Meta is investing heavily in AI infrastructure, with capital expenditures expected to reach $60-65 billion in 2025, primarily for AI facilities and GPU procurement [5][59] - The company has developed generative AI tools that enhance advertising efficiency, with a reported 32% increase in ROI for advertisers [4][49] Financial Projections - Revenue forecasts for FY25-27 are $188.4 billion, $214.9 billion, and $244.4 billion, respectively, with net profits projected at $69.4 billion, $79.4 billion, and $90.3 billion [6][69] - The target price is set at $664.03 per share, based on a P/E ratio of 25x for FY2025 [6][69]