QuantaSing upgraded to Buy from Neutral at Citi

Citi analyst Alice Cai upgraded QuantaSing (QSG) to Buy from Neutral with a price target of $9.52, up from $6.10, after meeting with management. The firm also opens a “90-day positive catalyst watch” on the shares. Wakuku production remains less than 50% of demand even after 5-6 times mold expansion, validating the “explosive market reception,” the analyst tells investors in a research note. The firm says Wakuku Gen-2 restocking in mid-June should drive an immediate revenue uplift after prolonged shortages, while new intellectual property launches in June and July) validate QuantaSing’s pipeline depth. Citi believes the company’s pivot from a relatively low return on invested capital online education model to a high repeat-purchase, brand-driven IP model is a “game-changer.”