According to UBS, it’s time to acquire China-based online social and entertainment company Hello Group. Analyst Felix Liu upgraded Hello Group to buy from neutral, saying the stock is about to recover after poor first-quarter guidance weighed on the company. He cited improving year-over-year comparisons, better cost discipline, and China’s reopening as bullish outlooks. “[We] think the worst is over on Q123’s weak guidance,” Liu wrote on Friday. “We expect earnings to recover sequentially from Q223 provided: 1) lower year-to-date comparisons for with its live streaming business due to regulatory changes to tips in May 2022; 2) value-added services (VAS) revenue related to offline dating recovers as China reopens; and 3) cost discipline. According to the analyst, media consumption due to the Lunar New Year holiday in the first quarter. However, Liu raised his 12-month price target to $12.50 from $4.80. The new target implies that the stock could rise 60% from Thursday’s closing price. He said Hello Group’s stock is currently trading at the “lowest of any profitable internet companies” multiple, limiting the possibility of future price declines. it has a track record of returning profits to shareholders (dividend rate of 9% in 2023E and a repurchase program of US$200 million to be implemented until June 2024),” wrote Liu. must be the only analyst to have recently upgraded Hello Group.Earlier this month, JPMorgan analyst Daniel Chen upgraded the company from neutral to overweight, saying it could capitalize on the growth sector. China live will resume this year. —Michael Bloom of CNBC contributed to this report.