1. What are CHINA LIT's full-year performance expectations? As of September 16, 2025, based on quarterly performance outlook data: projected operating revenue of RMB 7.231-9.165 billion, with a year-over-year change of -11.0% to 12.9%; projected net profit of RMB 962 million to 1.609 billion, representing a year-over-year growth of 559.8% to 869.1%; projected adjusted net profit of RMB 1.293-1.420 billion, up 13.3% to 24.4% year-over-year. Attention should be paid to whether subsequent financial report disclosures can exceed expectations, as quarterly performance outlook data will provide performance verification for investors.
2. Latest Analyst Views on CHINA LIT
TF Securities believes: CHINA LIT's financial performance in the first half of 2025 was impressive, with total revenue of RMB 3.19 billion and gross margin of 50.5%, both exceeding expectations. Online business revenue reached RMB 1.99 billion, up 2.3% year-over-year, with significant growth in both proprietary platform and third-party platform revenues. IP operations and other revenue totaled RMB 1.21 billion, though down year-over-year, new business development was rapid. The online reading content ecosystem flourished, with substantial growth in both the number of new authors and works, as well as works generating over one million in revenue. In the IP visualization field, film and television, animation, comics, and short dramas all performed strongly, with multiple works maintaining high popularity. Regarding IP commercialization and monetization, derivative products business GMV reached RMB 480 million, and the game "Douluo Continent: Soul Hunting World" received enthusiastic response. AI technology deeply empowered creation, translation, and diversified content formats, driving IP industry chain synergy.
By business segment: 1) Online business: revenue of RMB 1.99 billion, up 2.3% year-over-year, with significant growth in proprietary platform and third-party platform revenues. 2) IP visualization: multiple IP adaptation works achieved high popularity, with outstanding performance in animation and comics, and improved hit rates for short dramas. 3) IP commercialization and monetization: derivative products business GMV reached RMB 480 million, with enthusiastic response to "Douluo Continent: Soul Hunting World" in the gaming sector. 4) AI technology applications: deep empowerment in text creation and overseas expansion, driving IP industry chain synergy.
Haitong International Securities believes: CHINA LIT's performance in the first half of 2025 exceeded market expectations, with revenue declining 24% year-over-year to RMB 3.2 billion, where online reading and IP businesses exceeded expectations by 1.5% and 1.4% respectively. Adjusted net profit margin declined 1 percentage point year-over-year to 15.9%. The company seized growth opportunities in the IP industry, becoming the largest provider of TV drama IP, with 6 of the highest-viewed dramas adapted from CHINA LIT's IP. The IP derivative products business developed rapidly, with GMV reaching RMB 480 million in the first half, up 3-4 times year-over-year. The short drama business is also progressing steadily, having released 2,000 IPs for drama adaptation and 300 IPs for industry collaboration.
In the second half, the company expects more new content to go online, including "Anti-Drug Storm," which is expected to drive NCM revenue growth. However, as most drama revenues are recognized on a net basis, full-year NCM revenue is still expected to decline year-over-year. The online reading business remains stable, with full-year total revenue expected to decline 11% year-over-year. Profit margins benefit from high gross margins of IP derivative products business and accounting treatment changes in short drama business, with new businesses expected to drive gross margin improvement. Second-half adjusted net profit is expected to grow 90% year-over-year, with full-year growth of 18%. We have raised the company's 2026 valuation, upgrading our target price to HK$38, maintaining an outperform rating. Risk factors include underperforming IP business, content delays, tightening regulations, and intense competition.
(Note: All earnings forecast data in this article are sourced from earnings prediction databases)
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