• 4Q26 revenue met our expectations, while PATMI exceeded. Revenue and PATMI were at 101% and 107% of FY26e forecasts, respectively. Revenue rose 18% YoY, led by Cloud Azure revenue growth (+43% YoY). PATMI beat our expectations on a net gain from the Anthropic investment.
• We forecast FY27e revenue growth of 17.2%. Azure is expected to grow 45% in 1Q27e, driven by OpenAI backlog conversion, enterprise AI adoption, and capacity expansion, with demand continuing to outpace supply. Productivity growth should remain strong, supported by Copilot, M365 E5 and E7 monetisation, and usage-based billing, while the PC segment is likely to remain weak amid higher pricing and elevated inventory.
• We maintain our ACCUMULATE recommendation, with a higher DCF-based target price of US$515 (prev. US$485), driven by better-than-expected revenue and earnings, as well as lower than our forecasted CAPEX in FY26. We roll our valuation forward, while our FY27e forecasts are unchanged. Our WACC and g remain unchanged. We see strong long-term Cloud and AI earnings visibility, backed by a US$678bn commercial RPO, accelerating cloud AI-driven growth and monetisation of SKUs Productivity offerings.

Overview BLOKS is a leader in China’s assembly character toys market. The company holds over 500 patents, possesses original IP capabilities, and has non-exclusive licenses for approximately 50 well-known IPs. Its product positioning is “high quality at a reasonable price.” Leveraging its product strength and supply chain advantages, BLOKS maintains cost competitiveness while continuously expanding its product categories. The company has established a multi-channel sales network, and since 2022, has primarily focused on offline channels centered on distributors. According to...
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Overview POP MART is primarily engaged in the design and development of trendy toys. It operates a comprehensive platform covering the entire industry chain of intellectual property (IP) for trendy toys, with businesses including IP incubation and operation, trendy toys and retail, theme park and experiences, and digital entertainment. The company’s products include blind boxes, figurines, ball-jointed dolls (BJD), MEGA, plush toys, and derivatives, among others. Its self-developed products primarily feature artist-owned IPs such as THE MONSTERS, MOLLY, SKULLPANDA, and...
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