China Literature announced interim results for the six months ended 30 June 2026.
Revenue reached RMB 3.53 billion, up 10.7% year-on-year, driven by a 41.9% surge in intellectual-property (IP) operations to RMB 1.61 billion. Online reading revenue slipped 7.3% to RMB 1.84 billion as user metrics softened: monthly active users fell 5.1% to 134.1 million and monthly paying users declined 10.9% to 8.2 million, while ARPU increased 4.5% to RMB 32.70.
Gross profit climbed 11.1% to RMB 1.79 billion, lifting gross margin slightly to 50.7%. Operating profit dropped 69.1% to RMB 0.27 billion, and profit attributable to shareholders fell 84.1% to RMB 0.14 billion. The decline reflects a high comparison base from a RMB 0.60 billion disposal gain booked in H1 2025 and a RMB 0.30 billion tax-related charge in the current period. Excluding non-IFRS items, profit attributable to shareholders decreased 49.0% to RMB 0.26 billion.
Cost of revenue rose 10.2% to RMB 1.74 billion, largely from higher production spending on short dramas, AI-animated content, and traditional TV/web series. Production costs for visual content more than doubled to RMB 0.43 billion. Selling and marketing expenses grew 9.6% to RMB 1.01 billion, while general and administrative costs increased 15.5% to RMB 0.56 billion.
IP monetisation accelerated: • Short-drama and AI-animated-drama revenue exceeded RMB 0.43 billion, a 2.3-fold jump. • Forty-six AI-animated dramas each surpassed 100 million views; blockbuster ratio in short dramas was four times the market average. • IP merchandise gross merchandise value reached RMB 0.78 billion, up more than 60%.
AI integration expanded overseas reach, with more than 30,000 AI-translated titles on the WebNovel platform contributing 40% of that platform’s novel revenue.
The balance sheet remained solid: net cash stood at RMB 9.86 billion, the current ratio was 332.7%, and there was no outstanding borrowing. Capital expenditure totalled RMB 43.60 million.
Management reiterated its “IP + AI” strategy, aiming to deepen AI use across content creation and monetisation while continuing to support original authors.