Zhitong Financial APP learned that Everbright overseas released a research report that downgraded China Literature (00772) to "overweight", taking into account the short-term pressure of reducing costs and efficiency strategy to increase income from reading business, the overall pressure on the advertising industry, the decline in revenue from proprietary games and the uncertainty of regulatory policies in the film and television industry, the revenue forecast for 2022-24 was lowered to 81.85590.6 / 9.988 billion yuan. Over the same period, the net profit forecast for homecoming also fell by 43.4%, 8.7%, and 21%, with the target price falling to 36.9 Hong Kong dollars.
According to the report, the company reported results for the first half of 2022 with total revenue of 4.087 billion (year-on-year-5.9%), gross profit of 2.146 billion (year-on-year-6.2%), gross profit of 52.5%, overall stable performance, and home net profit of 229 million (year-on-year-79%), mainly due to investment and acquisition losses. The bank expects that the value of IP will head into a long-term deterministic trend, and China Literature will enrich its IP reserves to lay the foundation for future full-link operations; at the same time, it will deeply participate in the layout of Tencent's pan-cultural and entertainment industry chain, and animation will provide preliminary screening opportunities for large IP; in the second half of the year, works such as "Battle of the Roses" and "even if there is a gale" will continue to support the steady performance of Xinli.