NEWS WRAP: Blockbusters charge up China Literature’s profits
The Tencent-backed online literature platform saw strong growth from its intellectual property operations
By Teri Yu
Online literature platform China Literature’s (0772.HK) revenue rose 27.7% year-on-year to 4.19 billion yuan ($588 million) in the first half of this year, lifted by the strong performance by a number of blockbusters, according to its interim results.
The Tencent-backed leading online literature platform saw strong growth from its intellectual property (IP) operations as revenue soared 73.3% year-on-year to 2.25 billion yuan in the six-month period. Among the company’s various releases, “Joy of Life 2” achieved notable success to become the most watched Chinese TV series on Disney+. The drama boosted its returns by generating additional sales from themed products such as games and merchandise.
Expanded licensing of China Literature’s IP to business partners and new initiatives such as short dramas, merchandise and its collectible card business also contributed to the positive results.
“We continued to execute high-quality content strategy and made significant progress in maximizing the potential of our premium IPs across the industry value-chain,” said CEO Hou Xiaonan.
The company’s operating profit for the first six months of 2024 rose 46.1% to 454 million yuan year-on-year, while its net profit also jumped 33.9% to 504 million yuan.
China Literature said it will continue to apply a fully integrated approach to manage and monetize premium IP in its portfolio. On its online reading platform, the company added 170,000 writers and 320,000 literary works during the period. Number of newly signed literary works that generated over 2 million yuan in revenue was up 33% year-on-year.
China Literature is one of the earliest players from China’s e-book publishing business. In 2023, parent Tencent offloaded its loss-making animation and comics business to China Literature for 600 million yuan as part of Tencent’s plan to shed unprofitable and non-core businesses.
Last month, the company announced it has established a 1 billion yuan fund to commercialize IP covering literature, animation and TV dramas, and at the same time unveiled an upgrade to its AI translation tools to help to create and distribute content for international markets.
China Literature’s stock was down 2.8% late in the Tuesday trading day in Hong Kong after the results came out. The stock is down about 15% so far this year.
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