YH Entertainment (2306) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 1.2% to RMB764.5m; operating profit increased 75.6% to RMB54.6m, while net profit was RMB44.3m versus a RMB142.6m loss in 2023.

• The 2023 loss included RMB160.5m of fair value losses on convertible preferred shares; no such fair value change was recorded in 2024.

• Adjusted net profit declined 4.9% to RMB100.0m, and adjusted net profit margin eased to 13.1% from 13.9%.

Financial highlights

• Revenue increased 1.2% to RMB764.5m; gross profit fell 10.8% to RMB156.1m and gross margin contracted to 20.4% from 23.2%.

• Operating profit rose 75.6% to RMB54.6m; profit before tax was RMB70.2m versus a 2023 loss of RMB105.1m.

• Net profit was RMB44.3m versus a net loss of RMB142.6m; basic and diluted EPS were RMB0.06 versus a loss per share of RMB0.17.

• Cost of revenue rose 4.8% to RMB608.5m; selling and marketing expenses increased 53.1% to RMB59.0m, while G&A expenses fell 29.9% to RMB94.1m.

• Adjusted net profit was RMB100.0m versus RMB105.2m; adjusted margin was 13.1% versus 13.9%.

Outlook and guidance

• Plans include expanding the managed-artist and trainee roster, establishing an artist training center, and strengthening artist development, operations, marketing and promotion.

• Music plans include continued digital releases and expanding the music IP library through copyright acquisitions; pan-entertainment strategy targets further virtual-artist opportunities and broader offerings.

• International priorities include building the Korea team and exploring opportunities in Southeast Asia and Japan, alongside ongoing global artist promotion.

• Financing availability is not expected to change materially in the near term; liquidity will be monitored and sufficient cash and financing arrangements maintained.