UBS Global Research lifted its target price for Maoyan Entertainment (01896) to HK$17.5 from HK$16 and maintained its "buy" rating.
Although Maoyan was impacted by the YoY decline in box office receipts in 1H, the research house still expects the net margin to expand 7.8ppt to 12.8% due to lower ticket subsidies. UBS also remains positive on the company's long-term outlook.
UBS said Maoyan is a unique distributor in China's movie market, with a dominant share in online ticketing. It recently officially launched its revamped corporate strategy, which is to establish a well-rounded platform with various data products and diversified services for content producers. Tencent has also strengthened its strategic partnership with Maoyan, providing more resources from its vast ecosystem.
UBS thinks investors are concerned about short-term headwinds but are not pricing in Maoyan's long-term growth potential.
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