China Literature (772) H2 2025 earnings summary

Executive summary

• Revenue declined 9.3% year-over-year to RMB 7,366.2 million, with gross profit down 13.4% to RMB 3,396.8 million and net loss to shareholders widening to RMB 776 million, mainly due to a RMB 1.8 billion goodwill impairment.

• Non-IFRS net profit attributable to shareholders dropped 24.8% to RMB 858.5 million.

• Online business revenue remained stable, while IP operations and others saw a significant decline.

• The company leveraged its deep IP library and creator ecosystem to deliver hit content across multiple formats.

• No dividend was declared for the year.

Financial highlights

• Total revenues were RMB 7.37 billion, down from RMB 8.12 billion in 2024.

• Online business revenues were RMB 4.05 billion, up 0.4% year-over-year.

• IP operations and other revenues were RMB 3.32 billion, down 18.9%, mainly due to fewer drama and film releases.

• Gross profit was RMB 3.4 billion, with a gross margin of 46.1% (down from 48.3%).

• Adjusted EBITDA dropped 33.5% to RMB 614 million, with margin at 8.3%.

Outlook and guidance

• Plans to release at least 200 short dramas in 2026, aiming for further growth in hit rate and profitability.

• Focus on scaling AI-animated drama business and expanding premium content offerings.

• Continued global expansion leveraging AI translation and international partnerships.

• Emphasis on diversifying content genres and strengthening the IP merchandise ecosystem.

• Management anticipates sustainable long-term growth through the “IP + AI” ecosystem.