YH Entertainment (2306) H1 2024 earnings summary

Executive summary

• H1 revenue fell 4.8% YoY to RMB347.3m, while gross profit rose 17.0% to RMB89.1m and operating profit reached RMB35.2m.

• Net profit was RMB29.4m versus a RMB175.9m loss in H1 2023; the prior-year result included a RMB160.5m fair-value loss on convertible preferred shares.

• Adjusted net profit increased 18.4% to RMB59.1m, and adjusted net margin rose to 17.0% from 13.7%.

Financial highlights

• Revenue was RMB347.3m, down 4.8% YoY; cost of revenue fell 10.6% to RMB258.2m.

• Gross profit rose 17.0% to RMB89.1m, with gross margin expanding to 25.6% from 20.9%.

• Operating profit was RMB35.2m versus RMB1.8m; profit before tax was RMB44.0m versus a RMB160.7m loss.

• Net profit attributable to owners was RMB30.8m; basic and diluted EPS were RMB0.04 versus a RMB0.22 loss per share.

• Adjusted net profit, a non-IFRS measure, rose 18.4% to RMB59.1m; adjusted net margin increased to 17.0% from 13.7%.

Outlook and guidance

• Artist roster expansion and promotion will continue; the artist training center is expected to come into use in H2 2024 to strengthen training capabilities.

• Plans include continued music releases and copyright acquisitions, building on digital music market growth.

• Virtual-artist plans include optimizing offerings, expanding A-SOUL opportunities with Nice Future and diversifying the pan-entertainment model.

• Overseas priorities include Korea, Southeast Asia and Japan, alongside building YH Entertainment USA’s roster and global brand exposure.