阅文集团(00772) - 2025 - 中期业绩

Financial Performance Summary The company reported a 23.9% decline in revenue for H1 2025, but achieved significant growth in operating profit and net profit attributable to equity holders. H1 2025 Financial Performance Summary | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,190,584 | 4,190,933 | (23.9%) | | Gross Profit | 1,612,384 | 2,083,230 | (22.6%) | | Operating Profit | 875,799 | 454,449 | 92.7% | | Profit for the Period | 849,565 | 503,932 | 68.6% | | Profit Attributable to Equity Holders of the Company | 849,755 | 504,303 | 68.5% | | Non-IFRS Profit Attributable to Equity Holders of the Company | 507,807 | 702,061 | (27.7%) | Business Review and Outlook The company continues to expand its IP ecosystem through creation, visualization, and commercialization, while actively integrating new technologies like AI to drive future growth. IP Creation In H1 2025, the company's online reading content ecosystem continued to thrive, with a significant increase in writers and works, substantial growth in high-revenue works, and enhanced user community engagement, driving online business revenue up 2.3% to RMB 1.99 billion and monthly paying users (MPU) up 4.5% to 9.2 million - Content ecosystem expanded, with approximately 200,000 new writers, 410,000 new novels, and 20 billion characters added in H1[6] - Strong output of quality content, with newly signed works generating over RMB 1 million in revenue up 63% YoY, and newly signed writers achieving average subscriptions over 10,000 up 45% YoY[6] Online Business Key Metrics | Metric | H1 2025 | YoY Change | | :--- | :--- | :--- | | Online Business Revenue | RMB 1.99 billion | +2.3% | | Average Monthly Paying Users (MPU) | 9.2 million | +4.5% | IP Visualization The company demonstrated strong performance in IP visualization, with significant achievements in premium film, television, animation, and short-form dramas, as multiple Yuewen IP-adapted works topped popular charts and short-form drama revenue for a single project exceeded RMB 80 million - Significant achievements in premium film and television adaptations, with 6 of the top 10 long-form dramas by effective viewership in H1 2025 adapted from Yuewen IPs, according to Yunhe Data[8] - Solid advantages in animation, with 8 of the top 10 animated works by effective viewership adapted from Yuewen IPs, and 'Battle Through the Heavens' annual series ranking first on Tencent Video's paid content chart[8] - Strong growth in short-form drama business, with a single project's highest revenue exceeding RMB 80 million, and over 2,000 web novel IPs made available for short-form drama adaptation to promote high-quality industry development[10] IP Commercialization and Monetization In H1 2025, IP derivative business achieved significant growth, with GMV reaching RMB 480 million, nearly equaling last year's total, driven by product development, channel expansion, user operations, and brand licensing, while multiple licensed game adaptations obtained publishing licenses for future launch - IP derivative business GMV reached RMB 480 million in H1, nearly equaling the RMB 500 million total for full-year 2024[11] - Business growth attributed to efforts including 3-4x faster new product launches, expansion of online and offline channels, deep user engagement, and licensing partnerships with 230 brands[11] - Game licensing business continued to advance, with 'Soul Land: Hunting World' receiving enthusiastic feedback post-launch, and multiple games including 'Under One Person' and 'Lord of the Mysteries' obtaining publishing licenses[12] Exploration of New Technologies The company actively integrated AI technology into its operations, launching the industry's first AI web novel knowledge base 'Miaobi Tongjian,' significantly boosting daily active users and AI feature usage for writer assistants, while AI translation models drove a 38% YoY increase in AI-translated work revenue, accounting for over 35% of total overseas platform novel revenue - Launched AI web novel knowledge base 'Miaobi Tongjian,' driving 'Writer Assistant' daily active users up over 40% YoY and AI feature weekly usage to nearly 70%[13] - On overseas reading platform WebNovel, AI-translated work revenue increased 38% YoY, accounting for over 35% of the platform's total novel revenue[13] - AI-translated works on WebNovel reached 7,200 titles, representing 70% of total Chinese translated works[13] Future Outlook Looking ahead, the company believes the rise of diverse content consumption forms like short-form dramas and trendy toys highlights the core value of creative transformation of quality IP, positioning Yuewen Group to lead industry development and drive the leapfrog evolution of China's IP ecosystem through its vast IP reserves and full industry chain synergy - The company believes the underlying logic of phenomenal growth stems from the creative transformation and deep scenario-based cultivation of quality IP[14] - The company's strategy will be based on its vast IP reserves, leveraging full industry chain synergy to lead industry restructuring[14] Management Discussion and Analysis This section provides a detailed analysis of the company's financial performance, including revenue, costs, profitability, segment results, and liquidity, highlighting key drivers and trends. Financial Results Overview In H1 2025, total revenue decreased 23.9% to RMB 3.19 billion, primarily due to uneven scheduling of film and TV projects, yet operating profit surged 92.7% to RMB 876 million and net profit attributable to equity holders grew 68.5% to RMB 850 million, driven by gains from deemed disposal of investees and cost control, with non-IFRS net profit attributable to equity holders (excluding New Classics Media) increasing 35.7% H1 2025 Consolidated Income Statement Core Data | Metric (RMB '000) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 3,190,584 | 4,190,933 | -23.9% | | Gross Profit | 1,612,384 | 2,083,230 | -22.6% | | Operating Profit | 875,799 | 454,449 | +92.7% | | Profit Attributable to Equity Holders of the Company | 849,755 | 504,303 | +68.5% | - Operating profit significantly increased primarily due to net other income of RMB 582 million (compared to a loss of RMB 3.7 million in the prior period) and reduced selling, marketing, and administrative expenses[27][28] - Excluding the impact of New Classics Media, non-IFRS net profit attributable to equity holders increased 35.7% from RMB 402 million in the prior period to RMB 545 million[29] Revenue Analysis Total revenue decreased 23.9% to RMB 3.19 billion, primarily due to a 48.4% YoY decline in copyright operations revenue impacted by film and TV project scheduling, while online business revenue remained robust, growing 2.3% to RMB 1.99 billion, with proprietary platform product revenue up 3.1% and third-party platform revenue up 23.1% Segment Revenue Details (RMB million) | Segment | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Online Business | 1,985.4 | 1,940.4 | +2.3% | | - Proprietary Platform Products | 1,746.0 | 1,694.2 | +3.1% | | - Tencent Product Channels | 97.1 | 130.7 | -25.6% | | - Third-Party Platforms | 142.2 | 115.5 | +23.1% | | Copyright Operations and Others | 1,205.2 | 2,250.6 | -46.4% | | - Copyright Operations | 1,137.5 | 2,202.8 | -48.4% | | Total Revenue | 3,190.6 | 4,190.9 | -23.9% | - Decline in copyright operations revenue primarily due to New Classics Media having no new film or TV series launched in H1, compared to RMB 1.05 billion revenue contribution in the prior period[23] Operating Data Despite monthly active users (MAU) decreasing 19.7% to 141.3 million due to channel optimization, core monthly paying users (MPU) increased 4.5% to 9.2 million, indicating stronger user willingness to pay, with average monthly revenue per paying user (ARPPU) remaining stable at RMB 31.3 Key Operating Data | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Average Monthly Active Users (MAU) | 141.3 million | 176.0 million | -19.7% | | Average Monthly Paying Users (MPU) | 9.2 million | 8.8 million | +4.5% | | Average Monthly Revenue Per Paying User (ARPPU) | RMB 31.3 | RMB 31.7 | -1.3% | - MAU decline primarily due to Tencent channel optimization efforts reducing active users in free reading channels[22] Cost and Expenses Analysis Cost of revenue decreased 25.1% to RMB 1.58 billion YoY, mainly due to a corresponding reduction in film and TV production costs, while selling and marketing expenses and general and administrative expenses also decreased 20.4% and 11.0% respectively, reflecting effective cost control, with gross margin slightly increasing to 50.5% - Cost of revenue decreased 25.1% YoY, primarily because no new film or TV series were launched in H1, resulting in no corresponding production cost recognition[23] - Selling and marketing expenses decreased 20.4% YoY, mainly due to reduced promotional expenses related to film and TV series[27] - Gross margin improved from 49.7% in the prior period to 50.5%[27] Segment Information By business segment, online business gross profit was RMB 990 million with a gross margin of 49.8%, remaining largely stable, while copyright operations and others gross profit decreased to RMB 620 million due to lower revenue, but its gross margin improved from 49.3% to 51.7% Segment Results (RMB '000) | H1 2025 | Online Business | Copyright Operations and Others | Total | | :--- | :--- | :--- | :--- | | Segment Revenue | 1,985,359 | 1,205,225 | 3,190,584 | | Gross Profit | 989,474 | 622,910 | 1,612,384 | | Gross Margin | 49.8% | 51.7% | 50.5% | | H1 2024 | Online Business | Copyright Operations and Others | Total | | Segment Revenue | 1,940,377 | 2,250,556 | 4,190,933 | | Gross Profit | 974,426 | 1,108,804 | 2,083,230 | | Gross Margin | 50.2% | 49.3% | 49.7% | Non-IFRS Measures and Liquidity The company's financial position remained robust, with net cash of RMB 9.57 billion and a debt-to-asset ratio decreasing from 19.9% to 17.4% as of June 30, 2025, while adjusted EBITDA was RMB 387 million, a decrease YoY, with zero leverage and RMB 1.57 billion in unutilized bank facilities Key Financial Position Metrics (RMB '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Cash | 9,572,967 | 9,935,700 | | Total Assets | 23,203,000 | 22,945,400 | | Total Liabilities | 4,043,200 | 4,569,300 | | Debt-to-Asset Ratio | 17.4% | 19.9% | - Adjusted EBITDA decreased from RMB 588 million in the prior period to RMB 387 million, with the adjusted EBITDA margin declining from 14.0% to 12.1%[31][32] - The company maintains zero leverage with no total borrowings and RMB 1.57 billion in unutilized bank facilities[39] Condensed Consolidated Financial Statements This section presents the condensed consolidated financial statements, including the statement of comprehensive income, financial position, changes in equity, and cash flows, providing a summary of the company's financial performance and position. Condensed Consolidated Statement of Comprehensive Income During the reporting period, the company achieved revenue of RMB 3.19 billion, operating profit of RMB 876 million, and profit for the period of RMB 850 million, with basic earnings per share significantly increasing to RMB 0.84 from RMB 0.50 in the prior period Condensed Consolidated Statement of Comprehensive Income Summary (RMB '000) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 3,190,584 | 4,190,933 | | Operating Profit | 875,799 | 454,449 | | Profit Before Income Tax | 999,044 | 602,996 | | Profit for the Period | 849,565 | 503,932 | | Basic Earnings Per Share (RMB) | 0.84 | 0.50 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were RMB 23.20 billion, total liabilities were RMB 4.04 billion, and total equity was RMB 19.16 billion, maintaining a robust asset structure with comparable non-current and current asset sizes Condensed Consolidated Statement of Financial Position Summary (RMB '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 23,203,016 | 22,945,442 | | Total Liabilities | 4,043,249 | 4,569,254 | | Total Equity | 19,159,767 | 18,376,188 | | Cash and Cash Equivalents | 2,025,285 | 3,264,188 | Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, total equity attributable to equity holders of the company increased to RMB 19.16 billion from RMB 18.37 billion at the beginning of the period, primarily driven by RMB 850 million in profit for the period, with share repurchases and cancellations totaling approximately RMB 147 million in consideration during the period - Beginning equity totaled RMB 18.38 billion, with total comprehensive income for the period of RMB 868 million, and transactions with owners resulting in an RMB 84.53 million decrease in equity, leading to an ending equity total of RMB 19.16 billion[48] - During the reporting period, share repurchases and cancellations resulted in a RMB 147 million reduction in share premium[48] Condensed Consolidated Statement of Cash Flows In H1 2025, cash flow from operating activities was a net outflow of RMB 72 million, compared to a net inflow of RMB 1.61 billion in the prior period, with both investing and financing activities resulting in net cash outflows, and cash and cash equivalents at period-end totaling RMB 2.03 billion Condensed Consolidated Statement of Cash Flows Summary (RMB '000) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | (72,474) | 1,613,843 | | Net Cash Flows Used in Investing Activities | (975,563) | (1,477,826) | | Net Cash Flows Used in Financing Activities | (188,977) | (63,231) | | Cash and Cash Equivalents at End of Period | 2,025,285 | 2,898,306 | Notes to the Interim Financial Information This section provides detailed notes to the interim financial information, covering segment reporting, intangible assets, and share-based payment arrangements. Note 4: Segment Information The company's reportable segments are 'Online Business' and 'Copyright Operations and Others,' with online business contributing RMB 1.99 billion in revenue and RMB 990 million in gross profit in H1 2025, and copyright operations and others contributing RMB 1.21 billion in revenue and RMB 620 million in gross profit, with the vast majority of revenue and non-current assets located in China - The Group's reportable segments are Online Business (online text, advertising, game distribution, etc.) and Copyright Operations and Others (film and TV, copyright licensing, derivative sales, etc.)[62] - For the six months ended June 30, 2025, no single customer, other than Tencent, contributed more than 10% of the Group's total revenue[65] Note 11: Intangible Assets As of June 30, 2025, the net book value of intangible assets was RMB 6.14 billion, with goodwill accounting for RMB 5.53 billion, and while impairment tests were conducted on goodwill from acquired film and TV businesses with no impairment loss recognized, a RMB 13.9 million impairment provision was made for certain content copyrights Intangible Assets Composition (RMB '000) | Category | Net Book Value as of June 30, 2025 | | :--- | :--- | | Goodwill | 5,528,215 | | Trademarks | 507,577 | | Content Copyrights | 88,621 | | Others | 13,267 | | Total | 6,137,680 | - Management conducted an impairment review of goodwill from acquired film and TV businesses, with no impairment loss recognized[81][82] - An impairment provision of approximately RMB 13.904 million was made for certain content copyrights[83] Note 18: Share-based Payments The company implemented 2014 and 2020 Restricted Share Unit (RSU) schemes and a 2021 Share Option Scheme, with 13,137,330 unexercised RSUs and 9,167,836 unexercised share options as of June 30, 2025, and share-based compensation expenses for H1 totaling approximately RMB 65.92 million - As of June 30, 2025, the unexercised balance for the 2014 RSU Scheme was 1,219,235 units, and for the 2020 RSU Scheme was 11,918,095 units[97][100] - As of June 30, 2025, unexercised share options totaled 9,167,836 units with a weighted average exercise price of HKD 39.98[102] - For the six months ended June 30, 2025, share-based compensation expenses were approximately RMB 65,916,000[69] Other Information This section covers additional information regarding the company's operations, including dividend policy, share repurchases, and corporate governance practices. Dividends The Board decided not to recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend an interim dividend for 2025[108] Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, the company repurchased a total of 6,338,800 shares on the Stock Exchange for a total consideration of HKD 158 million, with the repurchased shares subsequently cancelled Share Repurchase Details | Month of Repurchase | Number of Shares Repurchased | Total Consideration (HKD) | | :--- | :--- | :--- | | January | 2,400,000 | 58,929,370 | | April | 2,738,800 | 68,997,960 | | May | 1,000,000 | 24,917,320 | | June | 200,000 | 5,178,550 | | Total | 6,338,800 | 158,023,200 | Corporate Governance The company is committed to maintaining high standards of corporate governance and has complied with all applicable provisions of the Corporate Governance Code, with the Audit Committee reviewing the unaudited interim results and deeming the company's risk management and internal control systems effective and adequate - For the six months ended June 30, 2025, the company complied with all applicable code provisions of the Corporate Governance Code[112] - The Audit Committee reviewed the interim results and deemed the company's risk management and internal control systems effective and adequate[114]