Star CM (6698) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 50.7% YoY to RMB71.1m and gross profit declined 86.1% to RMB6.6m; net loss widened to RMB56.0m from RMB17.2m, mainly as fewer variety programs reduced revenue.

• Basic and diluted loss per share was RMB0.14, versus RMB0.04 in H1 2023.

Financial highlights

• Revenue was RMB71.1m versus RMB144.1m; cost of sales fell to RMB64.5m from RMB96.7m, while gross profit was RMB6.6m versus RMB47.4m.

• Administrative expenses fell 22.3% to RMB42.5m, primarily on lower R&D expenses; selling and distribution expenses fell 34.5% to RMB7.8m.

• Net loss included RMB5.6m fair-value losses on financial assets, versus a RMB0.1m gain a year earlier; share of JV losses was RMB14.9m versus RMB1.1m.

• Net impairment reversal on financial assets was RMB4.2m, versus RMB3.1m net impairment losses in H1 2023; other income and gains were RMB8.3m.

Outlook and guidance

• H2 work includes directing and post-production for Youku’s “Light Up @ edc_CHINA” and Tencent’s “Sing Tourism,” alongside smaller projects, performances and concerts.

• Priorities include expanding IP production, licensing and distribution, overseas recruitment, short-form video and short-drama activity, e-commerce integration, and AIGC use to lower costs and improve user experience.

• Management described China’s entertainment IP outlook as promising and said it would evaluate complementary M&A opportunities; no quantified financial guidance was stated.