China Literature Announces 2024 Annual Results
Results Highlights (1)
- Total revenues increased by 15.8% year-over-year to
RMB8,121.1 million (USD1,129.7 million ).
- Revenues from online business increased by 2.1% year-over-year toRMB4,030.6 million (USD560.7 million ), mainly due to consistent improvement made to core product operations and production of high-quality content.
- Revenues from intellectual property operations and others increased by 33.5% year-over-year toRMB4,090.5 million (USD569.0 million ), mainly due to solid growth across our IP operations businesses. -
On a non-IFRS (2) basis, which is intended to reflect core earnings by excluding certain one-time and/or non-cash items:
- Operating profit wasRMB985.4 million (USD137.1 million ), compared withRMB1,049.8 million in 2023.
- Profit attributable to equity holders of the Company wasRMB1,141.7 million (USD158.8 million ), compared withRMB1,130.4 million in 2023.
- Basic earnings per share wasRMB1.13 . Diluted earnings per share wasRMB1.12 . -
On an IFRS basis:
- Operating loss wasRMB336.1 million (USD46.8 million ), mainly due to an impairment loss of goodwill attributable to New Classics Media ("NCM"). Operating profit wasRMB709.3 million in 2023.
- Loss attributable to equity holders of the Company wasRMB209.2 million (USD29.1 million ), compared withRMB804.9 million profit attributable to equity holders of the Company in 2023.
- Basic loss per share wasRMB0.21 . Diluted loss per share wasRMB0.21 .
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(1) Figures stated in USD are based on |
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(2) Non-IFRS adjustments exclude share-based compensation, M&A related impact such as impairment provisions, net losses from investee companies and amortization of intangible assets, as well as related income tax effects. |
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(3) Certain figures included in this press release have been subject to rounding adjustments. Accordingly, figures shown as totals may not be an arithmetic aggregation of the figures shown in the breakdown items. |
Mr. Hou Xiaonan, Chief Executive Officer of
At the same time, we continue to explore the application of cutting-edge technologies to empower our content business. In
Financial Review (3)
Revenues
increased by 15.8% year-over-year to
Revenues from online business increased by 2.1% year-over-year to RMB4,030.6 million (
i) Online business revenues from our self-owned platform products increased by 3.4% year-over-year to
ii) Online business revenues from our channels on Tencent products decreased by 28.2% year-over-year to
iii) Online business revenues from third-party platforms increased by 32.0% year-over-year to
Revenues from IP operations and others increased by 33.5% year-over-year to
i) Revenues from IP operations increased by 34.2% year-over-year to
ii) Revenues from the "others" category, mainly generated by sales of physical books, increased by 10.5% year-over-year to
Cost of revenues
increased by 15.4% year-over-year to
Gross profit
increased by 16.3% year-over-year to
Interest income
increased by 7.2% year-over-year to
Net other losses
were
Selling and marketing expenses
increased by 31.5% year-over-year to
General and administrative expenses
decreased by 1.5% year-over-year to
Net provision for impairment losses on financial assets
was
Operating loss
was
Income tax expense
was
Loss attributable to equity holders of the Company
was
Key Operating Information
Average MAUs on our self-owned platform products and self-operated channels were 166.6 million in 2024, a decrease of 19.0% year-over-year from 205.6 million in 2023. A further breakdown of MAUs is as follows:
i) MAUs on our self-owned platform products remained largely stable on a year-over-year basis at 103.8 million, compared with 104.8 million in 2023; and
ii) MAUs on our self-operated channels on Tencent products decreased by 37.7% year-over-year from 100.8 million to 62.8 million, primarily due to continuous optimization of operational efficiency, which involved distributing more content through core pay-to-read products, resulting in a decrease of MAUs on free-to-read channels.
Average MPUs on our self-owned platform products and self-operated channels increased by 4.6% year-over-year from 8.7 million to 9.1 million in 2024, mainly due to growth in membership users following the launch of additional membership content in 2024.
Monthly ARPU for our pay-to-read business was
Other Key Information
- EBITDA was
- As of
- Free cash flow* was
- New Classics Media, on a standalone basis, recorded
* Free cash flow: operating cash flow deducts payments for lease liabilities and payments for capital expenditures.
Business Review and Outlook
IP Creation
We continued to strengthen the content ecosystem of our online reading business. In 2024, our reading platform added approximately 330,000 writers and 650,000 literary works, collectively contributing over 42 billion Chinese characters. High-quality works increased significantly, with the number of newly signed literary works with over 50,000 average subscribers per chapter up 50% year-over-year. Additionally, the number of new writers with annual income exceeding
As a result of these initiatives, our MPUs grew 4.6% year-over-year to 9.1 million in 2024.
IP Visualization
We made significant progress in IP visualization, releasing a series of top-tier content in the field of film, drama series, animation and comics. According to the
In the live action TV and film segment, we launched several phenomenal blockbuster hits throughout the year. We have one box office champion film "YOLO (热辣滚烫)", which grossed
In the animation segment, we released new series including "World's Best
In the comics segment, we completed the acquisition of
In the short drama segment, we launched over 100 titles in 2024. Leveraging our content creator resources, we collaborated with outstanding writers and screenwriters to produce a number of high-quality short dramas, with the most popular title generating close to
IP Commercialization and Monetization
Leveraging the strong influence and user traffic generated by our high-quality content, as well as our improved innovative capabilities and deep market insights, we made significant progress in our IP merchandise business.
In 2024, the total GMV for IP merchandise surpassed
To expand our distribution channels, we set up over 10 self-operated livestream channels, as well as official online stores on Taobao and Tmall. We also opened 8 offline stores, covering leading ACG (Anime, Comics, and Games) shopping districts in key cities such as
The global IP merchandise market is enormous at over
Exploration in New Technologies
We are aware of the enormous opportunities that AI brings to the content industry, and are actively embracing this transformation. We have taken a leading position in the development of the IP industry value chain, and are leveraging AI to enhance this competitive advantage across various business scenarios.
As previously mentioned, our "Writer Assistant (作家助手)" creation tool integrates the DeepSeek-R1 model, allowing writers across the industry to experiment with it to develop best practices. Since its integration, daily active users of "Writer Assistant (作家助手)" have increased by over 30%, with the weekly usage rate of AI functions exceeding 50% and the average number of writers using the "Intelligent Q&A" function per day increasing tenfold. This will help online literary creation enter a more efficient and intelligent era.
AI is also accelerating the globalization of our IP. In 2024, our overseas online reading platform, WebNovel, added more than 3,200 AI-translated works, accounting for 47% of all Chinese-translated works and about 40% of the top 100 best-selling lists. AI has enabled WebNovel to cover a wider range of languages, including Spanish, Portuguese, German, French, Indonesian, Japanese and many others. In 2024, revenue from non-English works translated by AI increased by more than 350%. As of
In addition, we are integrating AI into various formats such as audiobooks, radio dramas, animation, and videos to further accelerate the development of our IP. We are also applying AI to improve content recommendation and user interaction to enhance the user experience.
Outlook
We believe that the synergy of "IP+AI" will drive the content industry forward, creating a new ecosystem that stretches from content creation to user consumption. AI empowers IP, while IP provides scenarios for AI. The deep integration of the two will facilitate the transition towards multi-dimensional innovation and globalization, from which we are uniquely positioned to benefit. Looking ahead, we will embrace the latest technologies, continue the incubation of popular IPs, and build a leading IP industry value chain to engrain ourselves in the memories of the next generation.
About
Non-IFRS Financial Measures
To supplement the consolidated financial statements of the Company prepared in accordance with IFRS, certain non-IFRS financial measures, namely non-IFRS operating profit, non-IFRS operating margin, non-IFRS profit for the year, non-IFRS net margin, non-IFRS profit attributable to equity holders of the Company, non-IFRS basic EPS and non-IFRS diluted EPS as additional financial measures, have been presented in this press release for the convenience of readers. These unaudited non-IFRS financial measures should be considered in addition to, and not as a substitute for, measures of the Company's financial performance prepared in accordance with IFRS. These unaudited non-IFRS measures may be defined differently from similar terms used by other companies. In addition, non-IFRS adjustments include relevant non-IFRS adjustments for the Company's material associates based on available published financials of the relevant material associates, or estimates made by the Company's management based on available information, certain expectations, assumptions and premises.
Our management believes that the presentation of these non-IFRS financial measures, when shown in conjunction with the corresponding IFRS measures, provides useful information to investors and management regarding the financial and business trends relating to the Company's financial condition and results of operations. Our management also believes that the non-IFRS financial measures are useful in evaluating the Company's operating performances. From time to time, there may be other items that the Company may include or exclude in reviewing its financial results.
Forward-Looking Statements
This press release contains forward-looking statements relating to the industry and business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.
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CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME |
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Year ended |
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2024 |
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2023 |
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(RMB in million, unless specified) |
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Revenues |
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Online business(1) |
4,030.6 |
|
3,948.1 |
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Intellectual property operations and others(2) |
4,090.5 |
|
3,063.6 |
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8,121.1 |
|
7,011.8 |
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Cost of revenues |
(4,199.1) |
|
(3,640.3) |
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Gross profit |
3,921.9 |
|
3,371.5 |
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Gross margin |
48.3 % |
|
48.1 % |
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Interest income |
178.3 |
|
166.3 |
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Other (losses)/gains, net |
(973.9) |
|
11.5 |
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Selling and marketing expenses |
(2,261.0) |
|
(1,719.5) |
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General and administrative expenses |
(1,143.5) |
|
(1,161.0) |
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Net (provision for)/reversal of impairment losses on financial assets |
(58.0) |
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40.6 |
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Operating (loss)/profit |
(336.1) |
|
709.3 |
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Operating margin |
(4.1 %) |
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10.1 % |
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Finance costs, net |
(1.8) |
|
(12.9) |
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Share of net profit of associates and joint ventures |
239.0 |
|
205.0 |
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(Loss)/profit before income tax |
(98.9) |
|
901.4 |
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Income tax expense |
(110.7) |
|
(97.9) |
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(Loss)/profit for the year |
(209.6) |
|
803.5 |
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Net margin |
(2.6 %) |
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11.5 % |
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(Loss)/profit attributable to: |
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Equity holders of the Company |
(209.2) |
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804.9 |
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Non-controlling interests |
(0.4) |
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(1.3) |
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|
(209.6) |
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803.5 |
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(Loss)/earnings per share |
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(in RMB per share) |
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- Basic (loss)/earnings per share |
(0.21) |
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0.80 |
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- Diluted (loss)/earnings per share |
(0.21) |
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0.79 |
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Notes: |
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(1) Revenues from online business primarily reflect revenues from online paid reading, online advertising and distribution of third-party online games on our platform. |
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(2) Revenues from intellectual property operations and others primarily reflect revenues from production and distribution of TV, web and animated series, films, licensing of copyrights, operation of self-operated online games, distribution of short dramas, sales of IP merchandise products and sales of physical books. |
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CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME |
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Year ended |
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2024 |
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2023 |
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(RMB in million) |
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(Loss)/profit for the year |
(209.6) |
|
803.5 |
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Other comprehensive income, net of tax: |
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Item that may be subsequently reclassified to profit or |
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Share of other comprehensive loss of associates |
(0.4) |
|
(0.6) |
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Currency translation differences |
(18.9) |
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(21.7) |
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Item that may not be reclassified to profit or loss |
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Net income/(loss) from change in fair value of |
2.0 |
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(4.3) |
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Currency translation differences |
79.4 |
|
66.4 |
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|
62.1 |
|
39.8 |
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Total comprehensive (loss)/income for the year |
(147.5) |
|
843.3 |
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Total comprehensive (loss)/income attributable to: |
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Equity holders of the Company |
(147.1) |
|
844.6 |
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Non-controlling interests |
(0.4) |
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(1.3) |
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|
(147.5) |
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843.3 |
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SEGMENT INFORMATION |
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Year ended |
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2024 |
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2023 |
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(RMB in million, except percentages) |
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Revenues |
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Online business |
4,030.6 |
|
3,948.1 |
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Intellectual property operations and others |
4,090.5 |
|
3,063.6 |
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Total revenues |
8,121.1 |
|
7,011.8 |
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Cost of revenues |
|
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Online business |
(1,975.0) |
|
(1,983.5) |
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Intellectual property operations and others |
(2,224.1) |
|
(1,656.8) |
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Total cost of revenues |
(4,199.1) |
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(3,640.3) |
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Gross profit |
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Online business |
2,055.6 |
|
1,964.6 |
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Intellectual property operations and others |
1,866.4 |
|
1,406.9 |
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Total gross profit |
3,921.9 |
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3,371.5 |
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Gross margin |
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Online business |
51.0 % |
|
49.8 % |
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Intellectual property operations and others |
45.6 % |
|
45.9 % |
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Total gross margin |
48.3 % |
|
48.1 % |
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
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As of |
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(RMB in million) |
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ASSETS |
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Non-current assets |
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Property, plant and equipment |
97.8 |
|
128.3 |
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Right-of-use assets |
149.8 |
|
207.7 |
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Intangible assets |
6,158.8 |
|
7,330.1 |
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Investments in associates and joint ventures |
928.2 |
|
924.7 |
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Financial assets at fair value through profit or loss |
1,039.6 |
|
856.0 |
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Financial asset at fair value through other comprehensive income |
6.3 |
|
4.1 |
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Deferred income tax assets |
497.2 |
|
394.1 |
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Prepayments, deposits and other assets |
298.2 |
|
291.6 |
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Term deposits |
2,308.0 |
|
1,829.0 |
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|
11,484.0 |
|
11,965.7 |
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Current assets |
|
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Inventories |
693.0 |
|
743.7 |
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Television series and film rights |
529.8 |
|
995.1 |
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Financial assets at fair value through profit or loss |
3,252.9 |
|
2,442.7 |
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Trade and notes receivables |
1,703.4 |
|
1,988.2 |
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Prepayments, deposits and other assets |
907.4 |
|
1,212.6 |
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Restricted bank deposits |
4.5 |
|
- |
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Term deposits |
1,106.2 |
|
1,038.7 |
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Cash and cash equivalents |
3,264.2 |
|
2,801.8 |
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|
11,461.4 |
|
11,222.8 |
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Total assets |
22,945.4 |
|
23,188.5 |
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EQUITY |
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Capital and reserves attributable to
the
equity |
|
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Share capital |
0.6 |
|
0.7 |
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Shares held for RSU scheme |
(14.6) |
|
(16.6) |
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Share premium |
16,117.9 |
|
16,312.6 |
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Other reserves |
1,975.8 |
|
2,173.3 |
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Retained earnings |
294.7 |
|
555.0 |
|
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|
18,374.4 |
|
19,024.9 |
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Non-controlling interests |
1.7 |
|
(0.5) |
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Total equity |
18,376.2 |
|
19,024.4 |
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As of |
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(RMB in million) |
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LIABILITIES |
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Non-current liabilities |
|
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Lease liabilities |
85.0 |
|
153.2 |
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Long-term payables |
10.8 |
|
1.2 |
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Deferred income tax liabilities |
129.4 |
|
134.5 |
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Deferred revenue |
21.9 |
|
24.2 |
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Financial liabilities at fair value through profit or loss |
- |
|
247.8 |
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|
|
247.2 |
|
560.9 |
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Current liabilities |
|
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Borrowings |
- |
|
10.0 |
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Lease liabilities |
81.2 |
|
74.9 |
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Trade payables |
1,044.6 |
|
1,119.7 |
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Other payables and accruals |
1,662.0 |
|
997.7 |
|
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Deferred revenue |
1,148.9 |
|
879.3 |
|
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Current income tax liabilities |
217.7 |
|
266.4 |
|
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Financial liabilities at fair value through profit or loss |
167.6 |
|
255.1 |
|
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|
4,322.0 |
|
3,603.1 |
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Total liabilities |
4,569.3 |
|
4,164.0 |
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Total equity and liabilities |
22,945.4 |
|
23,188.5 |
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RECONCILIATION OF OPERATING (LOSS)/PROFIT TO EBITDA AND ADJUSTED EBITDA |
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Year ended |
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2024 |
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2023 |
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(RMB in million) |
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Reconciliation of operating (loss)/profit to EBITDA |
|
|
|
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Operating (loss)/profit |
(336.1) |
|
709.3 |
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Adjustments: |
|
|
|
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Interest income |
(178.3) |
|
(166.3) |
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Other losses/(gains), net |
973.9 |
|
(11.5) |
|
Depreciation of property, plant and equipment |
40.3 |
|
33.4 |
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Depreciation of right-of-use assets |
72.0 |
|
82.0 |
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Amortization of intangible assets |
157.5 |
|
182.7 |
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EBITDA |
729.3 |
|
829.5 |
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Adjustments: |
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|
|
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Share-based compensation |
126.4 |
|
131.5 |
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Expenditures related to acquisition |
67.5 |
|
56.9 |
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Adjusted EBITDA |
923.1 |
|
1,017.9 |
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RECONCILIATIONS OF IFRS TO NON-IFRS RESULTS |
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Year ended |
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Adjustments |
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As |
Share- |
Net losses |
Amortization |
Tax effect |
Non-IFRS |
|
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(RMB in million, unless specified) |
||||||
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Operating (loss)/profit |
(336.1) |
126.4 |
1,174.8 |
20.3 |
- |
985.4 |
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(Loss)/profit for the year |
(209.6) |
126.4 |
1,174.8 |
20.3 |
29.4 |
1,141.3 |
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(Loss)/profit attributable to equity holders of the Company |
(209.2) |
126.4 |
1,174.8 |
20.3 |
29.4 |
1,141.7 |
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(Loss)/earnings per share (RMB per share) |
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|
- basic |
(0.21) |
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|
1.13 |
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- diluted |
(0.21) |
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|
1.12 |
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Operating margin |
(4.1 %) |
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|
12.1 % |
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Net margin |
(2.6 %) |
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14.1 % |
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Year ended |
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Adjustments |
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As reported |
Share- |
Net losses |
Amortization of intangible assets(2) |
Tax effect |
Non-IFRS |
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(RMB in million, unless specified) |
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|||||
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Operating profit |
709.3 |
131.5 |
188.9 |
20.2 |
- |
1,049.8 |
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Profit for the year |
803.5 |
131.5 |
182.2 |
20.2 |
(8.3) |
1,129.0 |
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Profit attributable to equity holders of the Company |
804.9 |
131.5 |
182.2 |
20.2 |
(8.3) |
1,130.4 |
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Earnings per share (RMB per share) |
|
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- basic |
0.80 |
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|
1.12 |
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- diluted |
0.79 |
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|
1.11 |
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Operating margin |
10.1 % |
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|
15.0 % |
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Net margin |
11.5 % |
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|
16.1 % |
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Notes: |
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(1) Mainly includes goodwill impairment, impairment provisions and the fair value changes arising from our investee companies, the fair value changes of consideration liabilities related to the acquisition of NCM, and the compensation costs for certain employees and former owners related to acquisitions. |
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(2) Represents amortization of intangible assets and TV series and film rights resulting from acquisitions. |
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View original content:https://www.prnewswire.com/news-releases/china-literature-announces-2024-annual-results-302404245.html
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