Nomura upgraded the rating of CHINA LIT to "Buy" and raised the target price to 47 yuan

Nomura has upgraded the rating of CHINA LIT (00772.HK) to "Buy" due to an increasingly optimistic outlook for its short drama and animation business; the target price has been raised from 33 HKD to 47 HKD.

The firm stated that CHINA LIT operates one of the largest online literature platforms in mainland China, having accumulated a large user base and a talented community of writers. Over the years, the company has amassed a significant amount of high-quality IP, with its online reading business continuously generating robust cash flow, while the IP management business has become a driver of revenue growth.

To further unlock the value of its vast IP library, the company has expanded the scope of its licensing business for TV dramas, animations, comics, and games to include IP peripheral products, short dramas, and animation series. The firm is now more optimistic about the growth prospects of the company's short drama and animation business, believing that this segment will benefit from favorable industry trends, with momentum expected to strengthen