The Citifood market may have partially digested the weak results to be announced in the paper, but it is likely to fall short of expectations or drag down the short-term investment climate.
The Zhitong Finance App learned that Citi released a research report stating that it maintained the “buy” rating of Reading Group (00772) and lowered its earnings estimates by 29%, 15%, and 15% for each year from 2023 to 2025, to reflect the delay in major dramas, weak online reading, and AI-related investments. The target price was lowered from HK$40 to HK$31. In addition, Shinih Media is expected to perform better this year, benefiting from a good product pipeline, investment in the best-selling movie “Hot and Hot”, and a lower comparative base.
According to the report, the company will announce last year's results on March 18. The bank announced that it will begin a 30-day downward catalytic observation of reading, indicating that its last year's performance may fall short of expectations, due to the delay of its Xinli Media drama “With the Phoenix” until this year; continued optimization of the online reading pipeline; and investment in AI-related applications. Furthermore, it is expected that the market may have partially absorbed the weak results to be announced, but this may fall short of expectations or drag down the short-term investment climate.