China Literature (772) H1 2024 earnings summary

Executive summary

• Revenues rose 27.7% year-over-year to RMB4,190.9 million in H1 2024, driven by blockbuster IP releases, strong IP operations, and record-breaking content such as Joy of Life 2 and YOLO.

• Operating profit increased 46.1% year-over-year to RMB454.4 million, with margin improving to 10.8%.

• Net profit attributable to shareholders rose 33.9% year-over-year to RMB504.3 million; non-IFRS profit increased 16.4% to RMB702.1 million.

• Expanded international reach, distributing content in over 180 countries and leveraging AI for translation and content creation.

• Completed acquisition of Tencent Animation and Comics, adding top Chinese comic IPs and boosting cross-media IP value.

Financial highlights

• Gross profit increased 29.8% year-over-year to RMB2,083.2 million; gross margin improved to 49.7%.

• EBITDA reached RMB501.5 million, with adjusted EBITDA margin at 14.0%.

• Operating profit rose 46.1% to RMB454.4 million; profit before income tax up 41.7% to RMB603.0 million.

• Non-IFRS profit attributable to shareholders increased 16.4% year-over-year to RMB702.1 million.

• Net cash position improved to RMB9,208.1 million as of June 30, 2024.

Outlook and guidance

• Plans to release over 100 short-form dramas in 2024 and expand innovative formats such as interactive dramas.

• Continued focus on premium IP incubation, adaptation, and commercialization, leveraging new technologies and global expansion.

• Strong pipeline for the second half of 2024 and beyond, with multiple drama series and film projects in development.