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Shares of a major Chinese digital literature company declined after it announced a significant increase in net losses for the previous year, following its transformation into a multi-format, multimedia ecosystem. The company’s stock in Hong Kong dropped by 3.6%, closing at HKD 29.22 (approximately USD 3.72).
The firm reported a net loss of 776 million yuan (around USD 112.8 million) for 2025, a surge of 271% compared to the 209.2 million yuan lost in 2024. On a basis excluding international financial reporting standards, the company’s net profit shrank by 25%, totaling 858.5 million yuan.
Revenue declined by 9.3%, amounting to 7.4 billion yuan (roughly USD 1.1 billion). This decrease was mainly due to delays in launching film and television projects and a 20% drop in revenue from copyright operations, which was impacted by fewer long-form dramas and unclear release schedules.
Despite these setbacks, the company achieved notable success in intellectual property commercialization and AI-driven animated dramas last year. Its merchandise volume derived from IP derivatives more than doubled to over 1.1 billion yuan in 2025 compared to the previous year.
The company also expanded into the AI-generated animation sector last October. By the end of December, it had produced 1,000 animated dramas, over 100 of which attracted audiences of more than 10 million, and 12 had surpassed 100 million viewers. Revenue from these AI-driven animated works exceeded 100 million yuan in the second half of the year.
Further leveraging AI technology, the company facilitated its global expansion. As of the end of 2025, there were over 17,000 AI-translated works on its international reading platform, WebNovel. Revenue from these translated works increased by 39% compared to 2024, making up over one-third of the platform’s total revenue and becoming a key driver of international growth.
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