Caixin
Mar 20, 2018 06:45 PM
BUSINESS & TECH

Tencent’s China Literature Publishes Fifteenfold Profit Growth

China Literature's exhibition at the 11th China International Cultural and Creative Industry Expo in Beijing in October 2016. Photo: VCG
China Literature's exhibition at the 11th China International Cultural and Creative Industry Expo in Beijing in October 2016. Photo: VCG

Net profit for Tencent’s online publishing unit China Literature was 15 times greater in 2017 compared to 2016, according to the company’s first annual results released after its blockbuster initial public offering (IPO).

Revenue grew by 60% to 4.1 billion yuan ($648 million), from 2016’s 2.6 billion yuan. Profit attributable to shareholders jumped by a staggering 1,416% from last year’s 36.7 million yuan to 556.1 million yuan in 2017.

China Literature’s revenue comes primarily from payments by readers of the company’s online content, which ranges from popular romance serials to comics. Online reading accounted for 83.6% of the company’s revenue in 2017.

China Literature, which made its stock market debut in a heavily-oversubscribed Hong Kong IPO in November, sells millions of e-books through multiple online platforms, including a reading function built into Tencent Holdings Ltd.’s popular WeChat messaging app. As of Dec. 31, China Literature offered works by 6.9 million writers on its platforms — the vast majority of which are contracted and trained to produce original content for the company.

A significant increase in paid users boosted revenue last year, with an average of 11.1 million people paying to use China Literature’s services each month, up 33.7% from 8.3 million in 2016.

In addition to reader payments, the company hopes to adapt more of the intellectual property it owns into movies, TV and web series, and video games. “Developing, protecting, and monetizing our and our writers’ IP is a key focus,” China Literature said in its performance announcement Monday.

While the company has established over 200 content adaptation partnerships, including the upcoming Hunan TV corporate romance-drama “Our Glamorous Time,” intellectual property operations accounted for only 8.9% of China Literature’s total revenue in 2017.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)

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