A：The key trends that have shaped China's IT industry in the first half of 2025 include the continued increase in value of premium IT, the rapid emergence of short dramas reshaping content consumption, and the growing popularity of physical and scenario-based IT merchandise products.

A：In terms of online reading content, the company added 200,000 new writers and 410,000 new literary works, contributing 20 billion Chinese characters in the first half of 2025. The number of high-quality writers and literary works on the platform is growing steadily. The company achieved a year-over-year increase of 63% in the number of newly signed works generating over RMB 1 million in revenue and a 45% year-over-year increase in the number of newly signed writers with an average of more than one subscriber per chapter. This has led to higher community engagement and a year-over-year increase of 9.2 million in MPU, driving a year-over-year revenue growth of 2.3% to RMB 1.99 billion.

A：The company's achievements in IP visualization include strong performance across premium TV series, animation, and comics, as well as the rapidly growing short drama segment, which has enabled the company to build a distinct competitive edge.

A：In the first half of 2025, several top-tier TV series adapted from the company's IP, such as 'Flora of Peony', 'The Glory', and 'I'm Nobody in Season 2', achieved high popularity. According to Enlightened data, 6 out of the top 10 long-form dramas by cumulative views across all platforms in the first half of 2025 were adapted from the company's accounts. Additionally, the self-produced premium drama series 'The Narcotic Operation of Lu Fengbao' achieved a popularity index of over 20,000 on multiple mainstream media outlets.

A：The company's short drama segment achieved robust growth in the first half of 2025 with significantly increased views and global rankings. This success is attributed to the rich IP library, strong creator partnerships, and deep engagement across the IT industry chain.

A：In March 2025, the company upgraded its software business by opening more than 200,000 online literature I.T. for high-quality adoption and released an initial batch of 300 I.T. to invite screenwriters and producers to collaborate.

A：The company's physical and scenario-based IP merchandise products such as trendy toys, collectible cars, and goods experienced explosive growth, reflecting a profound advancement in mass cultural consumption habits. This led to a major breakthrough in the company's IT merchandise business, with total GMB reaching RMB 480 million in the first half of 2025, nearly reaching last year's full-year total of RMB 500 million. Growth was driven by continued dedication to product development, channel development, user engagement, and licensing expansion.

A：The company has accelerated new product launches, continuously improved quality, and made steady progress with online live streaming rooms and offline stores. Notably, their team expanded their reach through effective store management during the 618 shopping festival, partnering with nearly 10,000 online and offline distributors.

A：The company has partnered with 230 brands for It Serve licensing collaborations and is expanding into the online games segment by licensing premium IPs. Additionally, they are using AI to integrate across all business lines, including a new AI-powered knowledge base for online literature, and exploring AI applications in multiple content formats to transform mid and long tail text IP into multimedia formats.

A：The company is focusing on capitalizing on the strong growth momentum, the rise of shows, popularity of Chinese voice, and the influence of good culture to drive diverse content types and consumption patterns into mainstream. They aim to reaffirm their fundamental core principle of phenomenal growth from creative transformation and development of free IP.

A：In the first half of 2025, total revenue was 3.2 billion RMB, and online business revenues increased by 2.3% to 2 billion RMB. Revenues from self-platform products grew by 3.9% to 1.7 billion RMB, and advertising revenues decreased, leading to a 20.2% year-over-year revenue decrease for the channel. Revenues from third-party platforms increased by 20.2% to 140 million RMB. The average MPs grew by 4.5% to 9.2 million, and It operations and other businesses saw a 46.4% decrease in revenues to 1.2 billion RMB.

A：Operating metrics showed a decrease in total average MPs from 176 million in the first half of 2024 to 141.3 million in the first half of 2025. Revenues from self-operating channels decreased by 20.2% to 127 million, mainly due to optimization of operational efficiency. The company's strategy involved improving core product operations and continued production of high-quality content. Revenues from third-party platforms increased, reflecting the high quality of their content.

A：The cost of revenues decreased by 25.1% due to the absence of new TV series or film releases, which resulted in no corresponding production costs. Marketing and promotional expenses decreased by 20.4%, and operating expenses decreased by 11% to 485 million RMB. Net other gains were 583 million RMB compared with net other losses of 4 million RMB in the first half of 2024. As a result, the company's net profit sales increased by 60.285% to 850 million RMB on a non-si basis, and the net profit shareholders was 508 million RMB, down from 702 million RMB in the first half of 2024.

A：The King's Avatar event in Zurich, which featured the Glory World Invitational, received enthusiastic feedback from users. The event led to thousands of fans traveling to Switzerland to participate, and online social media engagements significantly exceeded expectations. The number of posts related to the Peace Avatar on the Red Note app increased dramatically, with the search term 'The King's Avatar' nearly edging out the previous month's search volume.

A：The company has continued to advance their IP merchandising in the first half of the year with impressive operations in the King's avatar. Future development priorities include premium IP product development, channel development, and management. The company aims to leverage its distinctive competitive edges in its IP library, product development, channel distribution, and user operations to capture a larger market share within the merchandise industry.

A：The merchandise business is expanding with a rich library of IT content merchandise products adapted from top-tier IP such as the King's Avatar, among others. The company is launching customized merchandise for mid-tier IP, introducing third-party high-quality anime IP, and independent fashion for merchandise development. Product types include goods, collectible cards, blind boxes, and plush toys, with the company exploring new categories like vinyl, plush toys, and jointed dolls. An integrated online and offline distribution network has been established, operating over 10 cell phones, live streaming rooms, and eeco Merce flagship stores. The company collaborates with around 10,000 online and offline distributors.

A：The company is focusing on long-term and diversified adaptations to maintain high popularity among classic IPs. New animations, drama series, and films are being released, such as sequels to 'Joy of Life' and 'My Heroic Husband', and adaptations like 'Battles Would Happen' and 'Outcast Yi'. The company is also striving to make breakthroughs in the merchandise business by launching new products with diverse designs, superior craftsmanship, and a broader range of categories, collaborating with consumer brands through licensing partnerships. Efforts are directed towards enhancing user reputation and the impact on IP value, and improving the GMV and product reputation in the early stages of the merchandise business.

A：To meet evolving user demand for short drama content, the company is embracing monetization opportunities through short drama adaptations, enriching the world view of ideas, attracting different age groups and interest communities, and actively adopting new technologies like AI to empower classic IP. They are also strengthening the online and offline operations of IP, enhancing synergies among different content formats of IP.

A：The recent achievements for the merchandise business include the merchandise team's ability to capture user demand and rapidly respond to it, as evidenced by the total GME for merchandise reaching RMB 500 million last year and nearly RMB 480 million this year. Future prospects indicate there is massive room for further growth, with the company focusing on fulfilling constantly evolving user demands and extending the IP life cycle. The company is also leveraging multi-category supply chain capabilities to penetrate new categories like Ne and is planning to launch relevant products in the second half based on user demand and previous price drops in the first half.

A：The growth of the overall It lighting business is being driven by factors such as robust partner demand for the company's IT, due to the premium quality and accumulated user base of the company's IP, which significantly boosts the success rate of adapted works. The company has also seen success in IT adapted drama series, games, and animation, with several top-tier titles being adaptations from the company's IP. The online literature platform continues to increase new IT works contributing to a vast IT Treasury House, and visualization and commercialization efforts are expanding the influence and commercial value of IT, enabling licensing partners to better appreciate the value of the company's IP.

A：The company plans to expand its IP licensing business by continuing to create a rich reserve of novel and comic IP, with emerging top IP titles, and by leveraging its existing catalog of classic and new IP. It has seen growth in the number of new works generating over RMB 1 million in revenue and the number of newly signed authors with high subscriber counts. Notably, new comic titles have quickly risen in popularity after their debut, showcasing remarkable popularity and potential. The company is highly confident in the prospects of its IP licensing business.

A：The company plans to leverage new technologies such as AI in its content empowerment strategy by utilizing AI to enrich content and facilitate business operations. This includes using AI for writing assistance, which has been integrated into the Rider Assistant for Creation platform, to aid authors and speed up content production. Additionally, AI is being explored for the production of short drama and comic adaptations from a large number of mid-tier IP, and AI translation services have been bolstered on the overseas reading platform, contributing to revenue growth.

A：The latest developments regarding AI technology within the company involve applying AI to content creation and enhancing the efficiency of content production. AI has been successfully introduced for writing assistance, visualization of short drama and comic adaptations, and AI translation services. The company has seen encouraging results, such as a 40% increase in interactions between writers and AI, a 40% year-over-year increase in daily active users of the Rider Assistant for Creation platform, and AI usage nearing 70% for translations on the overseas reading platform. AI translation works have become nearly 40% of the web novels top hundred best-sellers and contributed to over 30% of the total revenue on the web novel platform. The company is also set to roll out intelligent book search features that provide precise recommendations based on user input. Future plans include further developing and implementing AI technologies and applications, with the company intending to announce these achievements when they are ready.