[ET Net News Agency, 16 August 2019] Morgan Stanley assumed coverage on China
Literature (00772) with an "equal-weight" rating and a price target of HK$22.
The research house said China Literature's 18% stock price correction since its 1H
earnings miss appears to factor in a 15-20% drop in the 2019 consensus estimate.
Morgan is constructive on rising entertainment spending, driven by higher disposable
income. Assuming full-year earnings contributions from New Classics Media (NCM, acquired
in October 2018) in 2018, Morgan forecast China Literature's revenue and adjusted net
profit grow at respective 11% and 6% CAGRs, 2018-21. (KL)