In "Big Banks," the geopolitical situation between China and Japan is heating up, and Citigroup expects the impact on DAMAI ENT to be very limited

Citi's research report pointed out that as geopolitical tensions between China and Japan escalate, two Japanese films, "Crayon Shin-chan: Hot Spring Dance" and "Cells at Work," announced a delay in their release on Monday. The bank believes that since Japanese films contributed only 5% of China's box office last year, the delay of these two films may have a very limited actual negative impact on China's overall box office.

Citi stated that the impact of this event is more about market sentiment, including investors' concerns that if tensions escalate, MAOYAN ENT (01896.HK)'s key film "Demon Slayer" may face the risk of being suspended. However, it believes that the delay of the "Crayon Shin-chan" film will have very limited actual impact on DAMAI ENT (01060.HK), but considering the involvement of Japanese IP, there may still be negative sentiment effects.

Citi continued to point out that for MAOYAN ENT, negative sentiment is more centered around its heavyweight film "Demon Slayer," which was introduced on November 14. The market is concerned that if tensions further escalate, the film may be withdrawn from release. As of today, "Demon Slayer" has achieved a total box office of 397 million yuan, and MAOYAN's professional version predicts a final box office of 590 million yuan.

So far, Citi has not seen any official announcement regarding the suspension of "Demon Slayer," but it expects that MAOYAN's stock price may still bear some negative sentiment in the short term. However, as the largest movie ticketing platform, MAOYAN still has upward catalysts, including the films "Zootopia 2" and "Avatar 3."

Citi predicts that DAMAI's net profit margin for the fiscal year 2027 will be 15%, assigning a target price of HKD 1.4 based on a 25 times forecasted price-to-earnings ratio; at the same time, based on a 14 times adjusted earnings per share forecast for 2026, it gives MAOYAN ENT a target price of HKD 9.3