Citi released a research report stating that CHINA LIT (00772) posted first-half earnings slightly above the bank’s forecasts. Positive factors in the first-half results were driven by strong performance in short dramas and AI animation, as well as the growth momentum of intellectual property merchandise gross merchandise value, which rose 60% year-on-year. The bank is closely monitoring the impact of AI animation shows on other entertainment formats, including long-form dramas and online reading. Following the earnings release, near-term catalysts include the August launch of the game “Lord of the Mysteries,” and the continued use of its ample net cash of 9.9 billion yuan for share buybacks. Citi maintains a “Buy” rating and has raised the target price from HKD 23 to HKD 25, incorporating higher net cash and earnings revisions.