Key takeaway

Advertising business rebounded in Q1, while the profit side faced short-term pressure. 1) 2025 revenue was RMB13.81bn, YoY-1.9%, net profit attributable to shareholders of the parent company was RMB1.23bn, YoY -10.1%, mainly because the advertising business faced pressure in the first half of the year while advertising rebounded significantly in the second half, with H2 advertising revenue YoY +30.7%; however, membership revenue declined (due to a high base last year); and in the ecommerce segment, the Happigo business contracted. The larger decline in profit was mainly due to increased content investment and R&D investment during the year. 2) Revenue in 1Q26 recorded positive growth, mainly driven by the advertising business; on the profitability side, increased content investment led to a decline in profit margin. Looking ahead: continue to monitor the release schedule of variety shows and drama series, with high-quality variety shows (mainly long-running IP variety shows) launching intensively in Q2.

Revenue growth in 4Q25 and 1Q26 is expected to be mainly driven by the advertising business.

1) Advertising: revenue in 25H2 was RMB2.24bn, YoY +30.7%. Since Q3, hit variety shows such as Call Me by Fire, Divas Hit the Road, and See You Again My Love have been released frequently; advertising revenue in 1Q26 also maintained a growth trend, with hit variety shows such as Who's the Murderer and Happy Old Friends aired during the period.

2) Membership: Revenue in 25H2 was RMB2.15bn, YoY -19.2%, mainly because there were no phenomenal hits similar to 2024’s Legend of Shen Li and Romance in the Alley; however, the number of members grew steadily, with nearly 75.6mn effective members on Mango TV by the end of 2025, YoY +3.1%; pressure in 1Q26 was also mainly due to the scheduling rhythm and performance of broadcast content.

3) Operators: revenue in 25H2 was RMB0.85bn, YoY +0.7%; 1Q26 continued to record positive growth.

4) Content e-commerce: revenue in 25H2 was RMB0.85bn, YoY - 31.7%, with the decline significantly narrowing compared with 67.1% in H1. Among them, Xiaomang e-commerce recorded GMV of RMB18.6bn in 2025, +14.9% YoY, reaching a new high and achieving its first annual profit.

In 4Q25, gains from changes in fair value were RMB410mn, boosting profit for the period, mainly generated from financial assets measured at fair value with changes recognized in current profit or loss.

In 1Q26, profit margin declined, mainly due to increased investment in content. Gross margin in 1Q26 was 23.3%, -3.12pcts YoY but +7.51pcts QoQ, with the YoY decline mainly due to the company’s continued increase in investment in high-quality content. Expense ratios during the period changed little.

Going forward, focus on the release of key content reserves and catalysts from related policies. In Q2, Sisters Who Make Waves 2026 ranked first in variety show popularity upon its launch; meanwhile, the company has reserved variety shows such as Singer 2026, and high-quality dramas including Meishun and Changsheng, Why Not Cross the River Together, and Salted Fish Ascends.

Event

On April 24, the company released its 2025 annual report and 1Q26 report. Revenue in 2025 was RMB13.81bn, -1.9% YoY; net profit attributable to shareholders of the parent company was RMB1.23bn, -10.1% YoY; net profit attributable to shareholders of the parent company excluding non-recurring items was RMB1.15bn, -29.9% YoY. Revenue in 4Q25 was RMB4.75bn, +24.9% YoY; net profit attributable to shareholders of the parent company was RMB211mn, turning from loss to profit YoY; net profit excluding non-recurring items was RMB360mn, - 13.6% YoY. Revenue in 1Q26 was RMB3.084bn, +6.35% YoY; net profit attributable to shareholders of the parent company was RMB199mn, -47.37% YoY; net profit attributable to shareholders of the parent company excluding non-recurring items was RMB187mn, -38.53% YoY.