CICC has maintained its Outperform rating and HK$43.5 target price for CHINA LIT (00772), implying 26/27 times adjusted P/E for 2026/2027 and representing an upside potential of 69%. The firm also upheld its Non-IFRS net profit forecasts of RMB1.46 billion and RMB1.62 billion for 2026 and 2027, respectively. At the current share price, the stock trades at 16.0 times and 14.2 times adjusted P/E for 2026 and 2027.

Management indicated that CHINA LIT has adapted over 1,000 online literary works into short animated series, with more than 100 surpassing 10 million views and 26 exceeding 100 million views. The success rate of its self-produced series is five times the industry average, providing early validation of its AI+IP model. Currently, less than 0.1% of CHINA LIT’s IP portfolio has been developed, leaving over 99% of IP in text form. The application of AI technology is expected to unlock this vast pool of dormant IP, creating long-term growth opportunities.

The company has officially launched the "Seed Project," aiming to sign 1,000 AI directors and invest over RMB100 million to support individual creators. Management believes this initiative will strengthen the ecosystem of "creator + premium IP + AI tools" and accelerate the incubation of new content production units referred to as "One-Person Companies" (OPCs).

Looking ahead to 2026, management highlighted trends such as the popularization of IP consumption, increased penetration of practical merchandise, and accelerated growth in offline experiences and services. It is anticipated that CHINA LIT’s IP derivatives will further expand beyond their core audience.