Goldman Sachs: China Entertainment - Data Update for A-Share Coverage
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Goldman Sachs updated earnings forecasts and target prices for five A-share entertainment companies under coverage. Focus Media saw advertising revenue estimates lowered modestly due to macroeconomic weakness, but maintains a Buy rating with a 12-month target price of RMB 8.9 (down from RMB 9.0), based on 21x 2026E P/E. Revenue forecasts for 2025-2027 were cut by 0.4%, with net profit down 1%.
Perfect World received upward revisions, with 2026-2027 revenue estimates raised 1-4% and net profit up 8-11%, driven by improved pipeline visibility and solid expense control. Goldman maintains Neutral with a higher target of RMB 14.5 (from RMB 13.5), based on 20x 2026E P/E.
37 Interactive Entertainment saw net profit estimates raised 5% for 2025-2027 on cost savings, particularly in selling and administrative expenses. Rating remains Neutral with a target price of RMB 19.6 (from RMB 18.7), at 14x 2026E P/E.
G-bits had 2026-2027 net profit estimates trimmed 0.4% due to slightly higher operating expenses. Goldman retains Sell with a target of RMB 347 (from RMB 348), based on 15x 2026E P/E.
Mango Excellent Media's net profit estimates were raised 1-10% following the company's 2025 profit warning and favorable expense management. The Sell rating is maintained with a target price of RMB 18 (from RMB 17.8), based on 20x 2026E P/E. Revenue forecasts remain unchanged.
All target price adjustments reflect earnings estimate changes with unchanged valuation multiples. Key risks across names include macro-driven advertising weakness for Focus Media, new game performance for Perfect World, mini-game competition for 37 Interactive, and content traction for Mango Excellent Media.