Linmon Media (9857) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 28.4% YoY to RMB1,221.8m; adjusted net profit increased 60.4% to RMB227.4m.

• Premium drama output, overseas distribution, short dramas and artiste management supported growth; cost control and budget management helped profitability.

Financial highlights

• Gross profit rose 28.8% to RMB481.6m; gross margin was 39.4%, versus 39.3% in FY2022.

• Reported net profit was RMB213.6m, versus a RMB732.0m loss in FY2022; the prior-year result included a RMB789.1m fair-value loss on convertible redeemable preferred shares.

• Adjusted net profit was RMB227.4m versus RMB141.8m; adjusted basic EPS was RMB0.63 versus RMB0.57. Adjustments include share-based payments and listing expenses.

• Operating cash flow was RMB353.9m, compared with a RMB199.0m outflow in FY2022; cash and cash equivalents ended the year at RMB716.2m.

Outlook and guidance

• FY2024 priorities include premium original dramas, expanded production capacity, cost efficiency, AI applications, and continued growth in overseas distribution and localized production.

• Plans include scaling domestic and overseas short dramas, content marketing and artiste management, and releasing the first cinema film.

• The 2024 slate announced 16 drama projects spanning five categories; over 1,000 episodes of long-form projects were in rolling reserves.