The Chinese mainland’s biggest online publisher China Literature believes cooperation with its biggest shareholder, digital giant Tencent, will increase and help the publisher expand operations to a wider range of formats.
“There are more cooperation opportunities, especially in the pan-entertainment industry which based on intellectual property, such as film, television and games. It will help us develop in diversified operations,” China Literature’s Co-Chief Executive Officer Liang Xiaodong said during the annual results press conference on Friday.
“Tencent is not only our biggest shareholder but also the most important partner. This will not change after we have gone public,” he added.
China Literature reported net profit of 556.1 million yuan (US$70.91 million) for last year, a 1,416 percent increase from 36.7 million yuan in 2016. The publisher generated revenue of 4.1 billion yuan, 60.2 percent up from 2.6 billion yuan in 2016.
Revenue from online readings accounted for 84 percent of the total, driven by the growth in both the number of paying users and average revenue per user. The number of average monthly paying users for the year increased 33.7 percent to 11.1 million.
Liang attributed the expansion to users’ growing readiness to pay for premium online literature content and the continuous increase in user engagement.
“The average monthly ARPU reached 22.30 yuan, lower than the average price of one physical book, which means there are still spaces to increase paying ratio and paying users,” Liang reckoned.
As the company listed just last year and is still in development, it will not pay dividends this time.
Liang did not deny that the firm might go to the Chinese mainland’s A-share market for funding, as the deputy head of the China Securities Regulatory Commission Yan Qingmin confirmed Chinese depositary receipts (CDR) are on track to launch in the near future.
The move can help registered Chinese companies go public on the A-share market, or speed up overseas-listed Chinese companies’ return to domestic stock markets.
The company’s shares surged as much as 100 percent on the first day it listed in Hong Kong last November, making it the hottest initial public offering in the city in a decade.
Shares in China literature fell 0.49 percent to HK$82.05 on Monday.
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