CHINA LIT Accelerates IP Monetization: Short Dramas and AI Animated Series Account for Over 12% of Half-Year Revenue

CHINA LIT is accelerating its transition from online reading to multi-format IP development.

On August 11, CHINA LIT disclosed its interim results for 2026. In the first half of the year, the company achieved revenue of RMB 3.531 billion, a year-on-year increase of 10.7%; gross profit margin rose from 50.5% in the same period last year to 50.7%.

Among these, online business revenue decreased by 7.3% year-on-year to RMB 1.84 billion; revenue from copyright operations and other businesses increased by 40.3% year-on-year to RMB 1.691 billion, with its proportion rising by nearly 10 percentage points to 47.9%.

Short dramas and AI animated series have become the fastest-growing segments within the copyright operations business.

CHINA LIT disclosed that revenue from these two businesses exceeded RMB 430 million in the first half of the year, a 2.3-fold year-on-year increase, accounting for approximately 12.2% of the group's revenue during the same period.

In the first half of the year, CHINA LIT launched more than 90 short dramas, stating that the hit rate of its short dramas was four times the market average; among AI animated series, 46 titles surpassed 100 million views, with the rate of titles achieving over one million views being five times the industry average.

In specific projects, the short drama "The Invisible Guard" accumulated over 5 billion views across all platforms, while the AI animated series "Three Thousand Shelters" surpassed 3 billion views, driving the original novel into the top ten of Qidian's bestseller list.

CHINA LIT also launched "Qidian Theater" domestically and "ToonScroll" internationally, attempting to break away from short-video platforms and establish independent distribution channels for animated series content.

From a revenue structure perspective, short dramas and AI animated series are providing new channels for the visual adaptation of CHINA LIT's IPs beyond traditional long-form video, allowing more non-headline IPs to gain opportunities for adaptation and market validation.

IP derivatives, another representative emerging business, also maintained rapid growth.

In the first half of the year, the gross merchandise value (GMV) of CHINA LIT's derivatives reached RMB 780 million, a year-on-year increase of over 60%. The company continued to expand into categories such as plush toys, lifestyle peripherals, and precious metals, while strengthening its self-operated online channels and offline store layout.

In contrast, CHINA LIT's traditional online reading business remains under pressure. In the first half of the year, the average monthly active users (MAU) of CHINA LIT's proprietary platform products and Tencent's self-operated channels totaled 134.1 million, a year-on-year decrease of 5.1%; average monthly paying users dropped from 9.2 million to 8.2 million, a year-on-year decrease of 10.9%.

CHINA LIT stated that the decline in paying users was mainly due to the increased proportion of free reading content on its proprietary platforms; the 20.5% year-on-year decrease in MAU on Tencent's channels was related to the company's continued distribution of core content to its proprietary platforms.

AI is increasingly being used in content production and overseas distribution.

CHINA LIT has launched three vertical AI tools: NovelBuddy, DramaBuddy, and IPBuddy, serving web novel creation, animated series production, and IP value assessment, respectively.

As of the end of June, the overseas platform WebNovel had cumulatively launched more than 30,000 AI-translated works; the company stated that these works contributed 40% of the platform's novel revenue in the first half of the year, with revenue from works in minor languages increasing by 160% year-on-year.

In the first half of the year, net profit attributable to equity holders of CHINA LIT was RMB 135 million, a year-on-year decrease of 84.1%; adjusted net profit attributable to shareholders was RMB 259 million, a year-on-year decrease of 49%.

During the reporting period, a subsidiary made supplementary income tax payments of RMB 166 million and incurred late payment fees of RMB 134 million, collectively reducing net profit attributable to shareholders by RMB 300 million; in the same period last year, CHINA LIT also recognized a net gain of approximately RMB 598 million from the deemed disposal of an invested company.

As the scale of copyright operations and other businesses approaches that of traditional online business, IP monetization is driving CHINA LIT's accelerated business transformation, but whether this can continue to translate into stable profits remains to be seen.