[ET Net News Agency, 24 July 2019] Morgan Stanley lowered its target price for Maoyan
Entertainment (01896) to HK$22 from HK$25 and maintained its "overweight" rating.
The research house lowered its 2019 box office estimate from +10% to flat but remains
optimistic on the long term. Maoyan and IMAX China (01970) gained market share amid weak
box office in 1H, whereas ticket subsidy reduction (Maoyan) and operating leverage (IMAX
China) drove margin expansion.
Morgan estimated Maoyan 1H adjusted net profit at Rmb300mn (versus a net loss of Rmb20mn
in 1H 2018). It estimated revenue of Rmb1.85bn (flat). It cut its 2019-21 EPS estimates by
20%, reflecting lower box office estimates and higher tax rate assumptions of 22-25%
versus 16% previously. (KL)