Lyon: Raised target price for Yuewen Group to HK$35, increased forecast for adjusted net profit for the next two years.

Lyon issued a report predicting that the adjusted net profit of China Reading Group in the first half of 2025 would decrease by 31% year-on-year to 481 million yuan, with New Li Media expected to record a loss of 20 million yuan due to not issuing any TV series or movies during the period. Excluding the NCM business, the bank's adjusted net profit forecast for China Reading Group is raised from 458 million yuan to 501 million yuan, a 25% year-on-year increase, reaching a historical high, mainly benefiting from strong demand for IP licensing, as well as the strong performance of IP derivative products and short drama business. In terms of NCM business, the bank maintains its full-year profit forecast for 2025 at 330 million yuan. The bank has raised its overall adjusted net profit forecasts for China Reading Group in 2025 and 2026 by 4% to 1.35 billion yuan and 1.57 billion yuan respectively, based on the growth potential of IP derivative products, and has raised the target price from 34 Hong Kong dollars to 35 Hong Kong dollars, maintaining a "outperform the market" rating.