Citi's report indicates that while DAMAI ENT has made progress in optimizing its film business and reducing headcount, the profitability of its IP business and Damai was weaker than expected due to investments. Management anticipates profit growth in the Damai Domestic business for FY2027, and the film segment is improving efficiency, allowing for investments in new initiatives. However, these investments will impact near-term earnings visibility, leading Citi to lower its adjusted EBITA forecasts for FY2027 and FY2028 while maintaining a Buy rating and reducing the target price.
