China Literature Group (00772.HK) achieved nearly a 30% YoY revenue growth in the first half of this year, benefiting from the contributions of many popular film and television works, such as "Hot-Blood Dance Crew" and "Joy of Life Season 2". Among them, copyright operation and other business income increased by 73.3% YoY, the largest growth in three years.

Today, China Literature Group released its Mid-Year Performance Report for 2024. The company achieved a revenue of 4.19 billion yuan in the first half of the year, a YoY growth of 27.7%; the net income attributable to equity holders under non-International Financial Reporting Standards was 0.7 billion yuan, a YoY growth of 16.4%.

In terms of specific business, online business income was 1.94 billion yuan, a YoY decrease of 2.2%. This is mainly due to the decrease in Tencent product channel revenue offsetting the increase in third-party platform revenue. China Literature Group stated in the financial report that as the company focuses on developing a high-quality paid reading business model, more content is distributed through paid reading channels with higher return on investment, resulting in a continuous decrease in advertising revenue from free reading channels.

The effort in paid reading has also affected the MAU indicator. According to the financial report, the average MAU of China Literature Group's own platform and Tencent Product Self-Operated Channels in the first half of this year was 0.176 billion, a 16.9% decrease compared to the same period last year. Among them, the MAU of Tencent Product Self-Operated Channels decreased by 33.5% YoY to 70.7 million.

However, driven by many popular drama series in the first half of the year, China Literature Group's copyright operation and other business performance was outstanding. The revenue from this business was 2.25 billion yuan, a YoY growth of 73.3%.

It is understood that many popular drama series were launched by China Literature Group in the first half of this year, starting with the film and television blockbuster "Hot-Blood Dance Crew" during the Spring Festival, followed by the TV series "Rebirth of The Phoenix" in the first quarter, and then the hot drama series "Joy of Life Season 2" and "Rose Stories" broadcast before mid-year. Especially, "Joy of Life Season 2", the sequel to this novel IP, is in a leading position in terms of both viewership and sponsorship in the industry.

Why is it able to run the "Joy of Life model"? China Literature Group stated that it established the largest IP special group in the company's history early on, achieving linkage from literature to film and television, games, derivatives, cards and other aspects of the entire industry chain, to maximize the content value and commercial value of the IP.

China Literature Group revealed that during the release of "Joy of Life Season 2", the company launched 11 "Joy of Life" blind boxes and soft peripherals, as well as a collection card with 308 face designs. The sales of blind boxes exceeded 0.2 million, while the GMV of film and television cards reached as high as 20 million yuan before the drama was broadcast.

According to China Literature Group, the company is developing high-quality short drama adaptations of China Literature IP, with single revenue from a work reaching 30 million yuan. Looking ahead to the whole year, more than 100 short dramas are expected to be launched, and more innovative forms, such as interactive short dramas, are being explored and practiced.

Hou Xiao Nan, CEO and President of China Literature Group, said that in the future, the company will continue to strengthen IP source construction, promote the prosperity and development of the content ecology, and actively explore the comprehensive application of AI technology in the IP industry chain.