Description of the event
The company released its 2023 performance report. In 2023, the company achieved revenue of 7.012 billion yuan, down 8.0% year on year; realized net profit of 805 million yuan, up 32.3% year on year, and net profit margin to mother was 11.5%, up 3.5 pct year on year. The company's revenue declined in 2023 due to the impact of online business optimization distribution channels, Shinih Media's movie and TV series schedule, etc., but the company has abundant reserves of high-quality content, and is expected to usher in a hot year in 24.
Incident comments
Looking at revenue by sector, the company's online business revenue for the full year of 2023 was 3,948 billion yuan, down 9.5% year on year. Mainly due to the optimization of distribution channels, content distribution mechanisms, and the termination of some third-party distribution partners; the company focused on producing high-quality quality content, and reading revenue from its own platform products increased by about 40% year-on-year. Revenue from copyright operations and other businesses was 3,064 billion yuan, down 6.1% year on year. Revenue declined mainly due to the impact of Shiny Media's 2023 movie and TV series schedule; excluding the influence of Shinih Media, copyright operating revenue increased by more than 10% over the same period last year.
The creative team has been expanded and the quality of content has improved. 1) Protect the interests of high-quality content creators. 1.1 million pirated leads were dropped in 2023, and about 380,000 writers and 670,000 novels were added to online reading platforms throughout the year. 2) Build an interactive community. Readers are closely linked to IP. In 2023, the number of new works with 100,000 subscriptions on all platforms increased 125% year over year, the number of new books that received 1 million reviews increased 67% year over year, and MPU increased 10.1% year over year to 8.7 million.
Consolidate the high-quality content ecosystem and unlock the value of IP. 1) In terms of film and television, the company launched a variety of high-quality works in 2023, which ranked among the highest in terms of broadcast volume and popularity on multiple platforms. At the same time, the company created boutique skits and launched the “Short Drama Galaxy Incubation Program”, which has sold over 10 million skits. 2) In the game field, the works “Legend of the Mortal Immortal” and “Starry Eater”, which were authorized by the company, were successfully launched; the continuous iteration of “The Continent of Sindora” effectively enhances the gaming experience. 3) In the animation field, the company's works are in a leading position in the market in terms of quantity and quality. In 2023, six animation works adapted from the company's IP entered the top ten animation broadcast lists; 13 of the company's IP adapted comics launched in 2023 surpassed 100 million in popularity.
The product reserves are abundant, and it is expected to usher in a year of explosive sales. 1) In terms of film and television, in the 2024 Spring Festival, the film “Hot and Hot”, which was co-produced by the company's Xinli Media and others, grossed more than 3.4 billion yuan and won the Spring Festival box office title; in terms of dramas, the second season of “Celebrating the Years”, “With the Phoenix” (released on March 18), and “Dafeng Gaijin” ranked in the top ten most anticipated by Tencent Video.
2) In the gaming sector, IP game projects authorized for adaptation, such as “Dora Continent” and “Battle for the Sky”, have obtained game versions and are expected to be launched in 2024. 3) In the animation field, the company further enriched its leading IP reserves and acquired Tencent animation assets. Well-known national comic IPs such as “Under One Man” and “The Fox Demon Little Matchmaker” will be included in the company's copyright library.
AI technology empowers creators and accelerates IP visualization of text. The company released the first large-scale model for the online text industry, “Writing Reading Pen”. The “Writer's Assistant Wonderful Pen Edition” based on the big model has been opened to all contracted writers, and the weekly usage rate of the AI function has reached 30%. AI translation is expected to help the company establish advantageous categories with strategic value in the process of going overseas. In December 2023, 21 of the top 100 best-selling works on the company's overseas reading platform WebNovel were translated by AI. In the future, the company plans to combine AI technology to enable animated adaptation of novels, accelerate the process of text IP visualization, and improve the efficiency of IP commercialization.
Risk warning
1. The progress of movies and TV dramas falls short of expected risk;
2. The development of AI technology falls short of expected risks.