Citigroup: Raises CHINA LIT (00772) target price to HKD 25, with first-half profits slightly exceeding the bank's forecast.

Citigroup released a research report stating that CHINA LIT (00772) achieved slightly better profits in the first half of the year than the bank's forecast. The positive factors contributing to the first-half performance came from the strong performance of short dramas and AI animations, as well as the growth momentum of GMV for IP-related merchandise, which increased by 60% year-on-year. There is close attention to the encroaching impact of AI animations on other forms of entertainment, including long dramas and online reading. Following the earnings announcement, near-term catalysts include the release of the game "Lord of the Mysteries" in August; the company will continue to utilize its ample net cash of 9.9 billion RMB for share buybacks. The rating is maintained at "Buy," with the target price raised from 23 HKD to 25 HKD, due to the incorporation of higher net cash and profit revisions.