[ET Net News Agency, 20 November 2020] Morgan Stanley raised its target price for China
Literature (00772) to HK$55 from HK$45 and maintained its "equal-weight" rating.
The research house thinks investor focus has switched to the potential upside from the
intellectual property (IP) operations after new management from Tencent (00700) came on
board in April.
Morgan said China Lit's other businesses, online reading (especially paid reading) and
NCM (content producer acquired in 2018), are both well established, but it thinks the less
developed IP segment remains the key debate among investors on potential upside.
Morgan looks to 2025 potential when the business should be more mature. It expects the
IP operation (excluding NCM) to contribute Rmb900mn net profit by 2025. (KL)