Leshi Internet Information &Tech:Data Update,Fine-tuning estimates post share placement

Changes and implications.

    We fine-tune our estimates following completion of the company’s privateplacement on July 13. We cut 2016E-20E EPS by 2.3%-4.9%, and our targetprice by 2.3% to Rmb68.61. We do not view these changes as material, andthere is no change to our investment thesis or rating.

    Valuation.

    Our target price of Rmb68.61 is still based on an unchanged 39X P/Eapplied to 2020E EPS of Rmb2.39 (was Rmb2.45) and discounted back to2016E using an 8% sector COE.

    Key risks: Lower-than-expected SuperTV/SuperPhone sales; higher-thanexpectedhardware and content cost.