The analyst rating for CHINA LIT (00772.HK) is reiterated as "Buy" by Nomura, despite lowering its target price from $47 to $44. This decision is based on the company's 2H25 total revenue growth of 6% YoY, which exceeded market consensus and Nomura's forecast, primarily driven by increased intellectual property operation revenue. Additionally, the non-IFRS operating profit margin improved due to effective control of operating expenses, which helped mitigate the impact on gross margins. However, Nomura adjusted its earnings forecasts for 2026 and 2027 downward by 5% and 7%, respectively, due to more cautious assumptions regarding New Classic Media's results. The target price reflects a projected FY2026 PE ratio of 28x, calculated using a discounted cash flow model.
