Photo/Du Wei (NBD)

On March 16th, China Literature Limited (HK.00772) released its 2022 annual performance report. 

Data showed that in 2022, China Literature Limited's total revenue decreased by 12% to RMB 7.63 billion; non-IFRS net profit attributable to the parent company was RMB 1.35 billion, showing a year-on-year increase of 9.6%. Of that, revenue from online business decreased by 17.8% year-on-year to RMB 4.36 billion, accounting for 57.2% of total revenue; and revenue from copyright operation and other business decreased by 2.9% year-on-year to RMB 3.26 billion.

National Business Daily (NBD) noticed that the "online reading" business, the major contributor to China Literature Limited's revenue, lost steam in 2022. Revenue from the business was RMB 4.36 billion in 2022, representing a year-on-year decrease of 17.8% and making up 57.2% of the total revenue. 

As for the reason for the decrease in revenue from online reading, China Literature Limited stated that, "It is mainly due to the implementation of cost reduction and efficiency enhancement measures for the business and a reduction in marketing expenses related to user acquisition."

Revenue from copyright operation and other business, another growth engine of the company, came in at RMB 3.26 billion in 2022, down 2.9% year over year. 

"We will continue to create more serialized works and maximize the value of IP," said Cao Huayi, chairman of New Classics Media under China Literature Limited at the earnings conference. This year, New Classics Media has nearly 18 projects in reserve, and the highly anticipated "Joy of Life 2" and "Fights Break Sphere 2" will start production soon.

China Literature Limited will also increase its development of derivatives and develop a variety of derivatives around IPs.

In addition, the company will explore the potential of the AIGC technology in better serving and assisting writers, protecting their rights and interests, and will also leverage AIGC-related technologies to enrich the community, for example, using AI to virtualize some characters to enhance user interaction and increase user participation.