[ET Net News Agency, 4 September 2020] Morgan Stanley raised its target price for
Maoyan Entertainment (01896) to HK$19 from HK$15 and maintained its "overweight" rating.
The research house remains optimistic that ticket subsidy reductions and upstream
expansion should support earnings growth. It estimated ticket subsidies will decline to
30% and 28% in 2020/2021 and remain stable at 30% of movie ticketing revenue from 2022,
sustaining non-content adjusted operating margins at >35% in the long run.
Also, expansion into upstream should increase the total addressable market (TAM) by
4.2x, to US$3.7bn by 2025 and become the new growth driver. Morgan lowered its 2020
revenue forecast by 38% mainly due to a later-than-expected cinema reopen date, while
keeping our 2021-22 revenue forecast largely unchanged. (KL)