Star CM (6698) H2 2025 earnings summary

Executive summary

• FY2025 revenue was RMB168.3m, up 3.2% YoY; net loss narrowed to RMB118.8m from RMB230.0m.

• Gross profit more than doubled as margins improved; substantial associate losses from property impairments remained a key drag on results.

Financial highlights

• Gross profit rose 120.3% to RMB88.1m; gross margin increased to 52.3% from 24.5%, mainly reflecting a shift to higher-margin variety-program directing and post-production services.

• Administrative expenses fell to RMB49.6m from RMB90.4m, helped by lower staffing, depreciation and professional fees; goodwill impairment declined to RMB3.0m from RMB48.5m.

• Share of associate losses increased to RMB103.5m from RMB7.5m, mainly due to property impairments at Shaanxi Shuolan and Shaanxi Yuanlv.

• Income tax expense was RMB28.4m versus a RMB1.1m credit, reflecting stock disposals and a supplementary FSIE-related tax provision.

Outlook and guidance

• Content priorities include expanding variety, music, film and drama IP, and developing an interactive film-game and AI-powered comic series, with initial outcomes expected by mid-2026.

• Plans include pursuing AI-driven music with partners, broadening distribution and exploring acquisitions and joint ventures; no quantitative financial guidance was stated.

• Management expects China's cultural and entertainment IP industry to retain growth potential, while maintaining a prudent approach to economic and global uncertainty.