Nomura: Downgrade CHINA LIT (00772) to "neutral" rating, lowering target price to HK$27.

Nomura released a research report stating that they have downgraded their rating on CHINA LIT (00772) to "Neutral" with a target price lowered from 29.8 Hong Kong dollars to 27 Hong Kong dollars. The company plans to focus further on high-quality movie and series content, with expected lower profit contributions, leading to weak profit prospects for the fiscal year 2025. Nomura pointed out that CHINA LIT issued a profit warning, with both net profit and adjusted net profit lower than market expectations, mainly due to a non-cash impairment of goodwill of 1.05 billion to 1.15 billion yuan from XINLI Media. The bank believes that XINLI Media's performance in the second half of last year was weaker than expected due to delays in releasing series.