FAST NEWS: Strawbear Entertainment profit surges business boom
The Latest: TV drama producer and distributor Strawbear Entertainment Group (2125.HK) forecast on Tuesday it expects to report a net profit of 29 million yuan ($3.99 million) to 39 million yuan for the first half of this year, up 20 to 28 times year-on-year.
Looking Up: The profit jump came on the back of big revenue gains as the company adjusted its broadcast drama series strategy, resulting in improved popularity for its programs.
Take Note: After adding back equity-settled share award expenses, the company’s adjusted profit for the first half of the year will range between 36.7 million yuan and 46.7 million yuan, up 164% to 236% year-on-year.
Digging Deeper: Founded in 2014 by Taiwanese actor Nicky Wu and listed on the Hong Kong Stock Exchange in 2021, Strawbear backs, produces and distributes TV dramas broadcast mainly in China. The company recorded its first loss since its listing last year due to tighter budgets across the broadcast industry and declining traffic in the direct-to-consumer (D2C) content market. The company has signaled it plans to use AI-generated content (AIGC) to help drive down production costs.
Market Reaction: Strawbear shares jumped on Wednesday, closing up 10.4% at HK$0.53 by the midday break. The stock now trades at the lower end of its 52-week range.
Translation by A. Au
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