Citi ups QuantaSing target, opens ’90-day upside catalyst watch’

Citi raised the firm’s price target on QuantaSing (QSG) to $14 from $9.52 and keeps a Buy rating on the shares. The firm also opened a “90-day upside catalyst watch” on the shares. The firm transitioned from forward price-to-sales to a sum-of-the-parts valuation “to capture the stark valuation gaps” between QuantaSing’s businesses. Citi expects a “generational re-rating” as the company transitions from education valuations to intellectual property premiums. This valuation arbitrage represents the core investment thesis beyond near-term operational catalysts, positioning QuantaSing as one of Citi’s top picks in the China small cap space, the analyst tells investors in a research note.