[ET Net News Agency, 13 August 2019] CICC Research lowered its target price for China
Literature (00772) by 33% to HK$29 and downgraded its rating to "neutral" from "buy".
The research house said revenue from online reading business decreased by 11.5% to
Rmb1.66bn in 1H. Average MPU (Monthly Paying User) decreased by 9.3% to 9.7mn, with a
paying ratio of 4.5%, down 0.5ppt.
CICC expects softness in paid reading KPIs to continue in 2H. The free to read model has
seen substantial growth in user base amid proactive marketing in 1H, but its monetization
is still at an early stage.
CICC cut its 2019/20 adjusted earnings forecasts by 30.7%/31.2% to Rmb897mn/Rmb1.11bn.
(KL)