[ET Net News Agency, 17 March 2021] Morgan Stanley lifted its target price for China
Literature (00772) to HK$60 from HK$55 and maintained its "equal-weight" rating.
The research house estimated a 2020 full-year non-GAAP net profit of Rmb300mn, mainly
contributed by NCM (New Classics Media). Morgan assumed the online business only breaks
even in 2H 2020, with higher S&M spending in the effort to gain market share.
Morgan thinks healthy user growth of Qidian (driven by content, not aggressive cash
burn) is most important. It has established itself as a leading content community and is
the foundation of IP business. (KL)