Kids

China Literature Announces 2022 Interim Results

HONG KONG, Aug. 15, 2022 /PRNewswire/ — China Literature Limited (“China Literature”Or “the Company”Stock code 0772) The leading online library and intellectual property portal (“IP”) incubation platform in ChinaToday, the unaudited results for the six-month ended were announced by June 30, 2022.

Highlights of the Results(1)

Total revenues RMB4,087.2 Million (USD609.0 Million), compared with RMB4,342.1 MillionsIn the first quarter of 2021.
–  Operating profit increased 8.2% year-over-year to RMB693.8 million (USD103.4 Million). Operating margin increased from 14.8% to 17.00%.
–  Profit attributable to equity holders of the Company increased 0.2% year-over-year to RMB666.0 million (USD99.2 million). Its margin increased from 15.3% – 16.3%
–  Basic earnings per share were RMB0.66. Earnings per share were diluted RMB0.65.On an IFRS Basis:
–  Operating profit was RMB251.2 Million (USD37.4 million), compared with RMB1,284.0 MillionsIn the first half 2021. The main reason for the difference in year-over-year was a gain of RMB1,076.8 MILLIONrelated to the sale of our stake in a joint enterprise in the first half of 2021.  
–  Profit attributable to equity holders of the Company was RMB228.5 million (USD34.1 Million), compared with RMB1,082.7 MillionIn the first half 2021.
–  Basic earnings per share were RMB0.23. Earnings per share were diluted RMB0.22.

(1) All figures in USD are calculated using USD1 to RMB6.7114.
(2) Non-IFRS adjustments don’t include share-based compensation or M&A-related impacts such as net losses/(gains), amortization and income tax effects.
(3) Some figures in this release were subject to rounding adjustments. The sums in this press release may not reflect the arithmetic sums of the breakdown items.

Mr. Edward ChengChina Literature Chief executive officer, said: “During the first half of 2022, the overall macro environment presented many challenges and put pressure on our industry. The volatility of the market forced us to adopt a more forward-thinking and flexible approach, and to explore a healthier and more sustainable growth trajectory. We took initiatives to optimize costs and improve efficiency, and sharpened our focus on key business and long-term objectives. Our operational efficiency improved significantly as a result. Non-IFRS operating profit increased by 8.2% year-over-year to RMB693.8 millions, and non IFRS operating margin rose from 14.8% a decade ago to 17.0% during the first half 2022.

At the same time, we released compelling visual content including drama series A Lifelong Journey (人世间), Life is A Long Quiet River (心居), The Wind Blows from Longxi (风起陇西) and Master of My Own (请叫我总监), the film Too Cool to Kill (这个杀手不太冷静), as well as a number of exciting animated series. Our long-term strategy of IP adaptation to visual formats supported by the constant release of blockbusters and high-quality content was reflected in our extensive resources for transforming literary material into video. We also increased our copyright protections and anti-piracy efforts as part of improving our content ecosystem. This was widely recognized by our writers.

We believe that the cultural sector is in ChinaIt has tremendous potential. The industry’s long-term prospects and general trend have not been affected by the short-term challenges. Our long-term strategy is unchanged. We will continue to put our efforts into the development, incubation and operation good stories that can live forever.

Financial Review(3)

Revenues were RMB4,087.2 Million (USD609.0 Million), compared with RMB4,342.1 millionsIn the first half of 2021.

Online businesses generated significant revenue RMB2,307.0 millions (USD343.7 Million), compared with RMB2,540.0 MillionIn the first half 2021. This category is further broken down as follows: i. Online business revenues from Company’s self-owned platforms products were RMB1,763.1 Million (USD262.7 Million), compared with RMB1,880.7 Million in the prior corresponding period, mainly as a result of a reduction in spending on marketing for user acquisition for our online business as we took initiatives to optimize costs and improve operational efficiency during the first half of 2022; ii) online business revenues from our self-operated channels on Tencent products broadly stabilized at RMB347.5 million (USD51.8 Million), compared with RMB353.5 millionsIn the previous corresponding period, iii), and online business revenues via third-party platforms were RMB196.5 Million (USD29.3 million), compared with RMB305.8 million in the prior corresponding period, mainly as we suspended collaboration with certain third-party distribution partners during the first half of 2022.

Revenues from IP operations and others were RMB1,780.2 millions (USD265.2 million), compared with RMB1,802.2 Million in the prior corresponding period, among which i) revenues from IP operations were broadly stable at RMB1,731.3 millions (USD258.0 Million), compared with RMB1,740.1 MillionIn the first half of 2021, ii) revenues “others”This category, which consists mainly in physical book sales, saw a 21.2% decline year over year. RMB48.9 Million (USD7.3 million) in the first half of 2022.

Revenues cost decreased 5.5% year-over-year to RMB1,940.9 Millions (USD289.2 Millions), as a result of i) a decrease in amortization of intangible assets of content copyrights due to the high base effect in the prior corresponding period, ii) a reduction in platform distribution costs for our online businesses, and iii) lower content costs. The decline in revenue was partially offset by the rise in production costs for TV, films and animated series.

Gross profit to fall 6.2% year-over-year RMB2,146.3 million (USD319.8 million). Gross margin was 52.5%, compared to 52.7% for previous periods.

Interest income increased 13.6% year-over-year to RMB68.9 Millions (USD10.3 Million), reflecting higher interest income from bank deposits.

Other losses, net were RMB235.4 Millions (USD35.1 Million), compared with net other gains of RMB901.1 MillionThe previous period was the same. The year-over-year difference was due to a gain in RMB1,076.8 MILLIONrelated to the sale our equity interest in Lazy Audio during 2021’s first half. Fair value losses were the main cause of other losses in quarter one of 2022. RMB372.9 Million (USD55.6 Million) resulting from the decreased valuations of our investee companies, partially offset by a fair value gain of RMB112.2 Million (USD16.7 Million) due to a change in the fair value of consideration liabilities related to the acquisition of New Classics Media.

Marketing and selling expenses decreased 17.6% year-over-year to RMB1,110.5 Millions (USD165.5 MillionAs part of cost control measures and efficiency improvements initiatives in the first six months of 2022, we have reduced our advertising and promotion expenses. However, this was partially offset by increased marketing expenses to promote movies and drama series. The ratio of sales and marketing expenses to revenues has decreased from 31.0% in 2020 to 27.2% by 2022.

General and administrative expenses decreased 12.2% year-over-year to RMB557.5 million (USD83.1 million), primarily due to a decrease in research and development expenses. As a percentage of revenue in 2020, general and administration expenses fell to 13.6%, from 14.6% in 2020.

Provision for impairment losses on financial assets reflected a provision for doubtful receivables. In the first half of 2022, the provision for doubtful receivables became effective. RMB60.5 million (USD9.0 million) on a net basis, mainly related to TV series and film projects.

Operating profit was RMB251.2 Million (USD37.4 millions), compared with RMB1,284.0 millionsIn the previous corresponding period. Non-IFRS operating profits increased 8.2% year over year RMB693.8 Million (USD103.4 Million), reflecting our successful efforts to control operational costs.

Income tax expense was RMB108.2 Million (USD16.1 million), compared with RMB284.4 MillionThe same period last year.

The Company’s equity holders received a portion of the profits RMB228.5 Million (USD34.1 Million), compared with RMB1,082.7 MillionIn the preceding corresponding period. Non-IFRS profit attributable to equity holders of the Company increased 0.2% year-over-year to RMB666.0 millions (USD99.2 millions).

Key Operating Information

The average MAUs of our self-owned platform products increased 13.8% from 232.7 million to 264.7 millions in the first half 2022. The following breakdown of MAUs can be found: i. MAUs on self-owned platform products increased 4.5% from 114.6 million – 119.8 millions, mainly due to our strengths in high quality content; ii. MAUs for our self-operated channels. TencentProducts increased 22.7% year over year from 118.1 million a 144.9 million. This was mainly due to an increase in users who are attracted to our free content in the second quarter of 2021. The average MPUs were stable compared to 8.1million in the second quarter of 2021. This was mainly due to an increase in casual users who were attracted to our free-to-read content in the second half. RMB36.4To RMB38.8The first half of 2022 saw improvements in content operations, community features and recommendation efficiency. These improvements drove the demand for high-quality content from paying users during the first half in 2022. June 2022Compared to 13 million in June 2021.

Other important information

EBITDA fell 4.2% year-overyear RMB626.9 MillionTo RMB600.6 million (USD89.5 Million) in the first half of 2022. Adjusted EBITDA rose 5.1% year-overyear RMB708.9 millionsTo RMB745.1 million (USD111.0 Million) in the first half of 2022.As of June 30, 2022, the Company’s net cash positionWas RMB6,555.7 millions (USD976.8 millions).Free cash flow*Was RMB548.7 Million (USD81.7 million), compared to RMB278.9 millionsIn the first half 2021. RMB966.7 million (USD144.0 Million) in revenues and RMB208.5 Million (USD31.1 millionIn the first six months of 2022, equity holders of the company accounted for a significant portion of the profit.

* Free cash flow: operating cash flow deducts payments for lease liabilities and payments for capital expenditures.

Business Highlights

IP Creation

As we mentioned before, our quality IP content begins in the online literature business. We focused on the fundamentals of our online business, which is our core pay-to read business. We also continued to build our online literature IP ecosystem. During the first half in 2022, the visibility, quality and quantity of IP on the online literature platform grew.

Our online literature platform has added approximately 300,000 authors and 600,000 novelists, with an increase of word count to 16 billion Chinese characters. Incubation and operations were also improved to help us develop high-quality content in certain categories. At the start of the year, for example, we identified the growing potential of science fiction themes through internal analysis. We organized two science fiction writing contests, and a series, which incubated approximately 20,000 science-fiction works. Many other well-known writers have also started to write science fiction. In the first half of the year, 12 Platinum and Phenomenal Writers joined our platform to create science fiction novels. Science fiction is now the fastest-growing genre on our platform.

This year marks 20 years since the founding of Qidian.com. We launched a new brand proposition for Qidian and upgraded the Qidian brand. “every good book is a new starting point”A brand mission of “good books never end” which are consistent with the Company’s mission. We will place quality at the core of our efforts and encourage diversification of content to create a healthy ecosystem for authors.

We have improved the quality of our literary IPs and taken cost control measures. We also proactively reduced sales and marketing costs. We have shifted our focus away from short-term revenue growth and towards optimizing operational efficiency as well as cost structure. We had to give up some revenue during the current period but we believe these measures will provide a solid foundation for long-term growth.

To protect the rights and interests writers, we increased our efforts against piracy issues. To improve our copyright protection, anti-piracy capabilities, we used artificial intelligence, encrypted watermarks and risk controls and bannings. We also continued to litigate against piracy sites, IP infringement, and continue to use encryption watermarks. Our strong efforts to protect IP and copyright have been acknowledged by writers. This has helped to win their trust and is an important component of the ongoing improvement in our content ecosystem.

Visualization of IP

IP visualization is our current focus. We achieved remarkable results in the first half of 2022. We achieved remarkable results in the first half of 2022 with continuous release of high-quality content. This reflects the strong capabilities of China Literature to re-create literary stories in visual formats. It also supports our strategy for IP visualization.

We launched many new works in the first half year in the live-action TV and film segment.
–  The drama series, A Lifelong Journey (人世间). This blockbuster series was adapted from the Mao Dun Literature Prize winning novel by Liang Xiaosheng. It set an 8-year-old record for prime time ratings on CCTV-1, topped all charts across internet and gained both popularity and reputation.
–  The drama series, Life is A Long Quiet River (心居). The viewership of this family drama series ranked first among local TV prime time drama series ratings nationwide in the first half of this year, and ranked second in the popularity ranking of iQIYI in the first half of this year, right after A Lifelong Journey (人世间).
–  The drama series, The Wind Blows from Longxi (风起陇西). This drama series, adapted from Ma Boyong’s novel, was an innovative exploration into the theme of ancient spycraft. It received an 8.1 score on the Douban platform.
–  The drama series, Master of My Own (请叫我总监). This romantic drama series was rated first on local TV prime-time drama series ratings and ranked first on the Youku list of top drama series during its broadcast period.
–  The film, Too Cool To Kill (这个杀手不太冷静). The film earned a box office total of RMB2.6 billion, ranked second in the 2022 Spring Festival Box Office.

At the same time, we continued to work on serial development of IP drama series, such as Joy of Life (庆余年), My Heroic Husband (赘婿), and Dafeng Guardian (大奉打更人). We believe that the launch of these works will bring China Literature’s IP brand appeal to a higher level.

In the animation segment, we launched new seasons of Stellar Transformations (星辰变) and Martial Universe (武动乾坤). At present, the series Stellar Transformations (星辰变) and Martial Universe (武动乾坤) have had 4 billion and 3 billion video views respectively, and ranked No.1 in terms of the average video views per episode among newly released animations on TencentVideo at the launch of their first half-year. Guduo data has shown that these are the 20 most popular domestic animation works. Tencent Video in the first half of 2022, 11 were adapted from China Literature’s IP.In the comics segment, we continued to improve production capacity, accelerate the process of IP visualization, and incubate top IP. Our joint project TencentThe three-year project to create comics from 300 online literary works is moving along well. More than 170 adapted comics works have been launched to date on the TencentComics platform. Some titles have become blockbusters such as Dafeng Guardian (大奉打更人), The First Sequence (第一序列) and Start with a Mountain (开局一座山).In the games segment, we strengthened our partnerships with quality game production studios. In the first half of this year, popular IPs such as Battle Through the Heavens (斗破苍穹) and The Naming of Night (夜的命名术) were licensed to game developers for adaptation. We expect to see these adapted games released within the next few years.

Commercialization

We built a solid foundation for the business in the first half 2022. We reduced the conversion time from IP products to offline products, increased the number of IP product types and IP, and made breakthroughs in product style, design, and theme. We focused our efforts on opportunities in consumer goods as well fashion toys and offline retail. Our initial success was achieved by working with industry upstream and downstream partners. We licensed one single edition of toys sculptures based on the theme character. “Medusa” from Battle Through the Heavens (斗破苍穹), which sold out immediately after the pre-sale launch with a GMV of RMB5,000,000. In future, we will develop derivatives adapted from more IP content, such as Joy of Life (庆余年), Lord of the Mysteries (诡秘之主), The King’s Avatar (全职高手) and Candle in the Tomb (鬼吹灯), and offer joint promotion for the launch of drama series, film, animation, comics, games and other content.

Overseas Business

We continue to promote cultural exchange and expand international presence. As of June 30, 2022WebNovel, our online foreign language reading brand, offered approximately 2,600 works in Chinese translations and approximately 420,000 original content creations.

Social Responsibility

China Literature is mindful of its social responsibilities. It promotes reading habits through public welfare projects and social activities, in order to support the national campaign for literacy. “reading for all”. During the pandemic, we donated millions of membership cards for people in pandemic-affected regions. Shanghai, ShenzhenSuzhou, which allowed them to freely read a wide range of works. On World Book and Copyright Day this year, we collaborated with the National Library of China, Shanghai Library, People’s Literature Publishing House, Posts & Telecom Press and hundreds of other publishing units to promote nationwide reading. Launch of the Qidian Reading App “Nationwide Reading Month”Campaign with 217 high-quality, paid books available for free for the first time.

Outlook

Online literature is showing value and possibilities beyond what can be found in print. These possibilities will only be realized if we work hard enough. China Literature began as an online literary magazine. It has since expanded to include a variety of media formats, including film, animation, comics and games, as well as drama series, drama series, and even films. Many works adapted from our original IP can meet the diverse cultural, entertainment, and literary needs of people. This creates a mutually reinforcing, virtuous cycle. China’sThe IP industry is still very young and will require sustained investment in IP innovation and creative talent. We hope to strengthen our IP resources and work with industry partners to create IP that spans all value chains, in the service good stories that will last forever.

Literature Limited About China

China Literature aims to create a rich and immersive intellectual property.“IP”) universe for the Mandarin-speaking world. It incubates original IPs through its online literature platform. These IPs are then adapted to a variety of digital entertainment mediums including comics and animation, film, TV, web series, and games. The virtual world created by these digital offerings become an inseparable part of a user’s daily life. China Literature promotes IPs through QQ Reading, Qidian, and New Classics Media. These are China Literature’s top online literature platforms. China. China Literature collaborates TencentAs its shareholder and strategic partner, and with other third-party partners, to distribute and develop IP content, and to increase the value of its IP. Many of the Company’s online literature works have been successfully adapted into animation, TV series, web series, film and games, including Joy of Life, Candle in the Tomb, Soul Land, The King’s Avatar and My Heroic Husband. China Literature’s rich and extensive content library as well as its unparalleled capability and resources to adapt IP into various entertainment formats is a significant competitive advantage that lies at the core of its business model. Visit www.China Literature.com for more information. http://ir.yuewen.com/.

Contact

For analysts/investors:
Maggie Zhou
Tel: +8621 6187 0500 ext. 80605
Email: [email protected]

For media:
Vivian Wang
Tel: +852 2232 3978
Email: [email protected]

Non-IFRS Financial Measures

For the convenience of the readers, this press release contains non-IFRS financial indicators to supplement the consolidated financial reports of the Company prepared in accordance IFRS. 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 non-IFRS measures may differ from similar terms used in 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. There may be other items that may be included or excluded by the Company when it reviews its financial results.

Forward-Looking Statements

Forward-looking statements in this press release relate to the industry outlook, forecast business plans, and growth strategies of Company. These forward-looking statements were made based on information currently available and reflect the Company’s outlook at the time. They are based upon certain assumptions, expectations and premises, some which are subjective or outside our control. These forward-looking statements could prove to be inaccurate and may not come to fruition in the future. A number of uncertainties and risks are behind forward-looking statements. Further information on these risks is available in our other publicly disclosed documents on our corporate site.

CHINA LITERATURE

CONSOLIDATED INDIVIDUAL STATEMENT








Six months ended June 30



2022


2021



(RMB in millions, unless otherwise specified)

Revenues





Online business(1)

2,307.0


2,540.0


Operation of intellectual property and other(2)

1,780.2


1,802.2



4,087.2


4,342.1

Revenues cost

(1,940.9)


(2,054.1)

Gross profit

2,146.3


2,288.1


Gross margin

52.5 %


52.7 %

Interest income

68.9


60.6

Other (losses/gains) net

(235.4)


901.1

Marketing and selling expenses

(1,110.5)


(1,348.2)

General and administrative expenses

(557.5)


(635.1)

Net (provisional)/reversal impairment losses
     financial assets

(60.5)


17.5

Operation Profit

251.2


1,284.0


Operating margin

6.1 %


29.6 %

Finance costs

(31.6)


(34.6)

Part of the net profit of associates or joint ventures

120.8


115.9

Profit before income taxes

340.4


1,365.4

Income tax expense

(108.2)


(284.4)

Profit for the period

232.3


1,081.0


Margin net

5.7 %


24.9 %

Profit attributableTo





Shareholders of equity in the Company

228.5


1,082.7


Non-controlling Interests

3.7


(1.8)



232.3


1,081.0

Earnings per share




(in RMB per Share)




– Basic earnings per share

0.23


1.08

– Diluted earnings per share

0.22


1.07


Notes:

(1) Revenues from online business primarily reflect revenues from online paid reading, online advertising and distribution of third-party online games on our platform.

(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 and sales of physical books.

CHINA LITERATURE

CONSOLIDATEMENT ABOUT COMPREHENSIVE INCOME



Six months ended June 30



2022


2021



(RMB in millions)




Profit for the period

232.3


1,081.0

Other comprehensive income/(loss):




Item that can be reclassified laterTo profit or
Loss





Share of any other comprehensive loss suffered by associates
     and joint ventures

(0.5)


(2.4)


Deviations in currency translation

46.1


(40.6)






Item that cannot be reclassifiedTo profit and loss





Net (loss)/gain based on a change in the fair value of financial
     asset at fair value through other
     comprehensive income

(6.6)


5.9


Deviations in currency translation

71.8


(2.2)



110.9


(39.2)

Total income for the period

343.1


1,041.8

 

Total comprehensive income attributable to:





Shareholders of equity in the Company

339.4


1,044.1


Non-controlling Interests

3.7


(2.3)



343.1


1,041.8

CHINA LITERATURE

INFORMATION FOR SEGMENTS








Six months ended June 30



2022


2021



(RMB in millions, except percentages).

Revenues





Online business

2,307.0


2,540.0


Intellectual property operations and other

1,780.2


1,802.2


Total revenues

4,087.2


4,342.1






Revenues cost





Online business

(1,146.7)


(1,336.0)


Intellectual property operations and other

(794.1)


(718.1)


Total cost of revenues

(1,940.9)


(2,054.1)






Gross profit


Online business

1,160.3


1,203.9


Intellectual property operations and other

986.1


1,084.1


Total gross profit

2,146.3


2,288.1






Gross margin





Online business

50.3 %


47.4 %


Intellectual property operations and other

55.4 %


60.2 %


Gross margin

52.5 %


52.7 %

CHINA LITERATURE

CONSOLIDATE STATEMENT FINANCIAL POSITION








As of



June 30, 2022


December 31, 2021



(RMB in millions)

ASSETS




Non-current assets





Property, equipment and plant

67.3


45.1


Right-of-use assets

227.2


281.5


Intangible assets

7,437.0


7,455.5


Joint ventures and investments in associates

1,055.7


932.3


Financial assets at fair market value through profit and loss

953.5


1,310.0


Financial asset at fair price through other
     comprehensive income

8.3


14.1


Deferred income tax assets

244.7


271.8


Prepayments, deposits, and other assets

234.5


256.7



10,228.1


10,567.0

Current assets





Inventories

738.3


653.8


Film rights and TV series

944.4


1,090.9


Financial assets at fair market value through profit and loss

4.5



Trade and notes

2,541.3


2,747.2


Prepayments, deposits, and other assets

1,168.1


1,032.0


Term deposits

2,414.9


2,678.0


Cash and cash equivalents

4,735.7


4,528.4



12,547.2


12,730.3

Total assets

22,775.3


23,297.3






EQUITY




Capital and reserves attributable to the equity
     holders of the Company





Share capital

0.6


0.6


RSU scheme shares

(17.5)


(17.5)


Share premium

16,403.0


16,412.7


Other reserves

1,680.1


1,455.1


Accumulated losses

(436.0)


(664.6)



17,630.3


17,186.5

Non-controlling Interests

0.5


0.5

Total equity

17,630.8


17,187.0





As of



June 30, 2022


December 31, 2021



(RMB in millions)

LIABILITIES




Non-current liabilities





Borrowing


382.5


Lease obligations

164.1


201.9


Long-term loans

6.5


9.1


Deferred income tax liabilities

144.0


149.3


Deferred revenue

27.7


28.8


Financial liabilities at fair market value through profit and loss

488.0


827.2



830.3


1,598.8

Current liabilities





Borrowing

594.9


792.8


Lease obligations

83.8


72.6


Trade payables

1,188.9


1,127.4


Other accruals and payables

1,152.8


1,185.8


Deferred revenue

679.0


669.8


Current income tax liabilities

160.8


338.6


Financial liabilities at fair market value through profit and loss

454.1


324.7



4,314.3


4,511.5

Total liabilities

5,144.5


6,110.3

Total equity and total liabilities

22,775.3


23,297.3

CHINA LITERATURE

RECONCILIATION OPERATING PROFIT TO EBITDA & ADJUSTED EBITDA



Six months ended June 30


2022


2021


(RMB in millions)

Reconciliation of operating profits to EBITDA
     adjusted EBITDA:




Operating profit

251.2


1,284.0

Adjustments:




Interest income

(68.9)


(60.6)

Other losses/(gains), net

235.4


(901.1)

Depreciation in property, plant, and equipment

9.6


9.5

Depreciation for right-of use assets

49.9


32.4

Amortization of intangible assets

123.3


262.7

EBITDA

600.6


626.9

Adjustments:




Shared compensation

116.7


53.7

Expenditure relating toAcquisition

27.8


28.3

Adjusted EBITDA

745.1


708.9

CHINA LITERATURE

RECONCILIATIONS IFRS TO NONIFRS RESULTS



Six months ended June 30, 20,22


Adjustments


As
reported

Share-based
Compensation

Net losses on investments
Acquisition(1)

Amortization
Intangible assets(2)

Tax effects

Non-IFRS


(RMB in Millions, unless otherwise stated)

Operating profit

251.2

116.7

305.9

20.1

693.8

Profit for the Period

232.3

116.7

305.9

20.1

(5.2)

669.7

Equity-related profit
Holders of
The Company

228.5

116.7

305.9

20.1

(5.2)

666.0

EPS (RMB per share







  – Basic

0.23





0.66

  – Diluted

0.22





0.65

Operating margin

6.1 %





17.0 %

Margin net

5.7 %





16.4 %










Six months ending June 30, 2021


Adjustments


As
reported

Share-based
Compensation

Net (Gains) from investments
Acquisition and purchase(1)

Amortization
(2) Intangible assets

Tax effects

Non-IFRS


(RMB in Million, unless specified).

Operating profit

1,284.0

53.7

(716.7)

20.5

641.5

Profit for the Period

1,081.0

53.7

(716.7)

20.5

224.8

663.2

Equity-related profit
Holders of
The Company

1,082.7

53.7

(716.7)

20.5

224.8

665.0

EPS (RMB per share







  – Basic

1.08





0.66

  – Diluted

1.07





0.66

Operating margin

29.6 %





14.8 %

Margin net

24.9 %





15.3 %


Notes:

(1) Includes the disposal Loss/(gains) and The fair value changes arising from our investee companies, the fair value changes of consideration liabilities
     related to theAcquisition of New Classics Media and the Compensation costs for certain employees and former owners of New Classics Media.

(2) Represents amortization of Intangible assets and TV series and film rights resulting from acquisitions.

SOURCE China Literature

China Literature Announces 2022 Interim Results

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