Thank you, operator. Ladies and gentlemen, welcome to our 2026 interim results conference call.

Joining us today on the call are Mr. Xiaonan Hou, our CEO, and Mr.

Jackie Xu, our VP of Finance. For today's call, Mr.

Hou will discuss the company's strategies and business highlights, and Mr. Xu will go through the financials.

We will then open up the call for questions. Before we begin, I would also like to remind you that management's comments during the call will include forward-looking statements that are based on our current expectations.

All statements other than statements of historical fact during the conference call are forward-looking statements which are subject to a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of the company.

This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, the measures of the company's financial performance prepared in accordance with IFRS. Please take a minute to read the risk factors and non-IFRS financial discussions in China Literature's 2026 interim results earnings release.

I'll now turn the call over to our Chief Executive Officer, Mr. Xiaonan Hou.

Thank you for joining us on today's earnings conference call. Before we go over our financial results, let me share a few thoughts on the industry landscape and our strategic priorities.

Over the past year, we have had multiple in-depth discussions about where the content industry is headed. In particular, two structural shifts stand out.

One is the continued rise of fragmented content consumption. The other is the revolutionary reshaping of the entire content ecosystem by AI.

In response to these trends, we turned our insights into action and made decisive strategic moves. We started with live-action short dramas, caught up with the technology wave, and finally incubated a brand-new content format, the AI animated drama, by integrating AI deeply into the creative process.

In the first half of this year, our short drama and AI animated drama businesses delivered exceptional growth, with combined revenues exceeding RMB430 million, over 3 times that of the same period last year, accounting for 27% of our IP operation revenues and serving as a key contributor to the 42% year-on-year increase in IP operation revenues. More specifically, our short drama business delivered a steady stream of hit titles in the first half of 2026, achieving a blockbuster rate 4 times the market average, while maintaining a balance of male- and female-oriented genres across our content portfolio.

We also built a scalable approach to developing blockbuster IP into serialized short dramas, validating the potential of serialized IP operations in the short drama sector. Meanwhile, leveraging the AI technology, we adapted over 1,000 online literature titles into AI animated dramas, among which 46 titles surpassed 100 million views each, 367 titles exceeded 10 million views each, and the proportion of titles reaching 1 million views was 5 times the industry average.

In our view, these high hit rates reflect not only our ability to anticipate industry trends, but also the strength of our premium IP library and the deep creative ecosystem we have built across the IP value chain over the years. AI tools are undoubtedly ushering content supply into a new era defined by greater scale and speed, but this doesn't diminish the value of content.

On the contrary, it reinforces the scarcity and value of premium IP. Visual content has become easier to produce, but only stories with cross-generational appeal that truly touch people's hearts will remain the foundation for sustainable monetization.

Powered by our IP plus AI engine, we harness the synergy between technology and creativity to accelerate the high-quality transformation of stories from text to visuals, opening up the next decade of IP value creation. That mission guides us as we look into the future.

With that, let me now walk you through our operating highlights for the first half of 2026. First, in IP incubation, our online reading ecosystem continues to serve as a super-reservoir of premium content.

In the first half of 2026, our platform attracted 240,000 new writers, generated over 460,000 online literature works, and added more than 30 billion characters, securing a strong source of content supply. Emerging-generation writers are gaining momentum.

Among newly signed writers who generated more than RMB1 million in revenue during the first half, those under 30 accounted for 57%, representing a 49% increase year-over-year. Promising works continue to emerge.

On Qidian, the number of titles receiving user collections rose 37% year-over-year, while the number of titles receiving monthly tickets grew 26% year-over-year. With the return of a series of top-tier platinum and phenomenal writers, two new titles attracted more than 200,000 readers each on their first day of launch, setting new records for debut performance on the platform.

Meanwhile, we accelerated the transformation from text to visuals. In the first half of 2026, while solidifying our traditional strengths in film, drama series, and animation, we also stepped up our efforts in emerging segments such as short dramas and AI animated dramas, resulting in exceptional growth.

In the premium drama series and film segment, several drama series adapted from China Literature's IPs premiered this year, including top-tier titles such as Blossoms of Power (Huasha), The Heir (Jiaye), and Ashes to Crown (Qiaochu). They all ranked among the top titles on platform popularity charts during their respective broadcasting periods.

Meanwhile, we also released our self-produced drama series No Pain, No Gain (Yanshao Youwei), The Devil Between Us (Chue), and Lady Liberty (Aiqing Meiyou Shenghua). These titles broke new ground across genres such as urban and crime dramas, winning both critical acclaim and strong audience traction.

In the animation segment, we released sequels of classic animated titles, including Battle Through the Heavens (Doupo Cangqiong), The Outcast (Yiren Zhixia), Almighty Mage (Quanzhi Fashi), and Stellar Transformations (Xingchen Bian). All these titles ranked among the top titles on platform popularity charts during their respective broadcasting periods.

Among them, The Outcast (Yiren Zhixia) achieved a popularity index of over 21,800 on Tencent Video, making it the most popular 2D animated series on the platform in the past three years. According to Enlightent, since the start of this year, eight out of the top 10 animation series by cumulative views across all platforms were adapted from China Literature's IPs, further demonstrating our market influence in animation content.

In the short drama and AI animated drama segment, as mentioned earlier, we achieved major breakthroughs. In the first half of 2026, we launched over 90 short dramas with many breakout hits.

In male-oriented genres, The Invisible Bodyguard (Yinshen Shiwei) was a blockbuster, with a popularity index exceeding 100 million and total views across all platforms surpassing 5 billion. In female-oriented genres, sequels of our original sweet wife (tianqi) IP performed strongly, setting a benchmark for commercialization.

In the AI animated drama segment, our top-tier title, 3,000 Shelters (Santian Bihu), surpassed 3 billion views across all platforms, driving the original novel into the top 10 of the best-seller ranking on Qidian. We also explored opportunities to develop premium AI animated drama platforms, launching Qidian Theater (Qidian Juchang) and Toonscroll in China and overseas respectively.

All these achievements were driven by China Literature's extensive IP library, strong creator ecosystem, and robust capabilities in IP development across the industry chain. Next, let me turn to IP commercialization.

In the first half of 2026, our IP merchandise business continued to maintain rapid growth, with GMV reaching RMB780 million, representing a year-over-year growth of more than 60%. This growth was driven by our continued enhancement across four core areas: product, channel, operation, and ecosystem.

On the product front, we strengthened our presence in the light and soft merchandise category, characterized by high-frequency purchases and strong repeat purchase rates, while expanding into new categories such as plush toys, lifestyle products, and precious metals. Our design excellence and supply chain efficiency enabled us to deliver a steady stream of high-quality products, positioning Yuewen Goods as one of the leading brands in China's anime merchandise market.

On the channel front, we strengthened our self-operated online sales network, including mini-programs, livestreaming rooms, and flagship e-commerce stores. We also optimized our offline store network and deepened collaboration with our channeled partners.

These efforts led to improvements in both channel profitability and brand control. We also continued to strengthen our sales velocity and supply chain management, improving inventory turnover efficiency and turning sales growth into solid profit contribution.

On the operational front, we launched campaigns around iconic IP characters, driving deeper fan engagement and stronger consumer conversion. During the first half, we organized the Glory Pilgrimage (Rongguang Xunli) pop-up event in four cities to celebrate the birthday of Ye Xiu, the leading character of The King's Avatar (Quanzhi Gaoshou).

We also launched the Outcast boy group (Yiren Nantuan), bringing the IP to a broader audience through idol-style marketing and deepening the emotional connection between the IP and users. On the ecosystem front, we accelerated the expansion of our overseas channels.

Together with our partners, we opened our first global collectible toy concept store in Singapore, while selected products on the overseas online store for Lord of the Mysteries (Guimi Zhi Zhu) sold out shortly after launch. The popularity of our hit merchandise further amplified the appeal of our IPs, driving users back to our content ecosystem spanning online reading, animation, and drama series.

Now let me share an update on our progress in AI. At China Literature, AI is not confined to a single application.

We have deeply integrated it into every stage of the content creation journey, from the spark of inspiration to user reach around the world. Recently, we launched the Buddy series of AI agents purpose-built for the creative content industry, and upgraded three core products: NovelBuddy (Zuojia Zhushou), DramaBuddy (Manju Zhushou), and IPBuddy (Banquan Zhushou), to provide content creators and operators with a comprehensive suite of AI-powered tools.

NovelBuddy is designed for online literature creators. In addition to AI-assisted writing support, it also provides copyright protection and anti-plagiarism services, helping safeguard creators' rights.

DramaBuddy focuses on AI animated drama production, covering the entire process including creative ideation, content production, and project management, enabling the scalable production of premium AI animated dramas. IPBuddy serves as the all-seeing eye of our in-house copyright team, enabling the value assessment of a title within minutes and greatly improving the efficiency of selecting IP for adaptation and commercialization.

Meanwhile, AI has also accelerated our global expansion. As of the first half of 2026, more than 30,000 AI-translated works were available on the WebNovel platform, contributing 40% of the platform's novel revenue during the first half of the year, and enabling Chinese stories to reach global multilingual audiences more efficiently.

We remain firmly convinced of the transformative power of IP and AI. Over the past two decades, the internet lowered the barriers to literary creation and paved the way for China Literature's growth into the company it is today.

We believe that over the next two decades, AI will raise the ceiling for creators and drive a substantial value enhancement of the entire content ecosystem. Deeply integrating AI into the creative process to drive growth is a key strategic priority for our future.

We see AI as an amplifier of IP value, with the power to make great stories reach their true, full potential. We also recognize that the more capable AI becomes, the scarcer and more valuable original human creativity will be.

That is why China Literature will continue to strengthen its support for original creators, ensuring that technology empowers creativity and that great stories thrive for generations to come. This concludes my remarks.

Now I'd like to invite Mr. Xu to present our financial performance.

Thank you.

Thank you, Mr. Hou.

Hello, everyone. In the first half of 2026, our total revenues increased by 10.7% year-over-year to 3.53 billion RMB.

Let's start with our online business. Online business revenues were 1.84 billion RMB, compared with 1.99 billion RMB in the first half of 2025, mainly due to competitive pressure which led to increased proportion of lower monetizing free-to-read content, and the shifted content distribution from online reading to short dramas and AI animated dramas on our self-operated products within the Weixin ecosystem.

In terms of operating metrics, our total average MAUs were 134.1 million, compared with 141.3 million in the first half of 2025. The decline was mainly due to our ongoing shift of core content distribution to our own platform products, leading to a continuous drop in MAUs on Tencent channels as user activity fell.

Average MPUs were 8.2 million, compared with 9.2 million in the first half of 2025, mainly because we distributed more free content on our self-owned platform products. Monthly ARPU increased 4.5% to 32.7 RMB, reflecting a mixed effect as lower ARPU users shifting to free content during the first half of 2026.

Now turning to IP operations and other businesses. In the first half of 2026, revenues from IP operations and others increased by 40.3% year-over-year to 1.69 billion RMB.

Within this segment, revenues from IP operations increased by 41.9% year-over-year to 1.61 billion RMB, primarily driven by rapid growth across multiple business lines, including short dramas, AI animated dramas, TV and web series, and IP merchandise products. In particular, revenues from short dramas and AI animated dramas exceeded 430 million RMB, up 2.3 times year-over-year.

This accounted for approximately 27% of IP operations revenues, and has become a new growth engine for our IP businesses. Our IP merchandise business also maintained strong growth momentum, with GMV increasing over 60% year-over-year to 780 million RMB.

Revenues from the others category, mainly generated by sales of physical books, increased by 14.4% year-over-year to 77 million RMB. Now let's look at costs and expenses.

In the first half of 2026, our cost of revenues increased by 10.2% year-over-year to 1.74 billion RMB, primarily driven by higher production costs for short dramas, AI animated dramas, and TV and web series, which rose in line with revenue growth as more content was released during the period. As a result of the foregoing, our gross profit increased by 11.1% year-over-year to 1.79 billion RMB.

Gross margin was up from 50.5% to 50.7% year-over-year. Our selling and marketing expenses increased by 9.6% year-over-year to 1.01 billion RMB, mainly driven by higher marketing and promotional spending to support expansion of our IP businesses.

As a percentage of revenues, our selling and marketing expenses decreased from 28.9% to 28.6% year-over-year. Our G&A expenses increased by 15.5% year-over-year to 560 million RMB, reflecting higher personnel and administrative expenses related to scaling of our IP businesses.

As a percentage of revenues, our G&A expenses increased from 15.2% to 15.9% year-over-year. Our net other losses were 25 million RMB, compared with net other gains of 583 million RMB in the prior period.

The change was mainly due to 134 million RMB in late payment tax surcharges incurred by a subsidiary of the company during the first half of 2026, compared with 598 million RMB of net gains on the deemed disposal of an investee in the first half of 2025. As a result of the above factors, our operating profit was 271 million RMB, compared with 826 million RMB in the first half of 2025.

On a non-IFRS basis, operating profit was 367.2 million RMB, compared with 449 million RMB in the first half of 2025. Our income tax expense increased from 150 million RMB to 225 million RMB, mainly due to 166 million RMB in supplementary income tax payments by a subsidiary of the company.

Together with related late payment tax surcharges of 134 million RMB, which was recorded in other losses, these tax-related items reduced our profit by 300 million RMB. Our net profit to shareholders was 135 million RMB, compared with 850 million RMB in the first half of 2025.

On a non-IFRS basis, our net profit to shareholders was 259 million RMB, compared with 508 million RMB in the first half of 2025, largely due to the 300 million RMB tax-related impact discussed above. That concludes our financial review part.

Let's move on to Q&A sessions.

感谢管理层接受我的提问。我的问题是关于短剧跟AI漫剧的，我们看到这块在国内的市场正在快速增长，想请教管理层是否有对短剧跟AI漫剧行业最新发展的趋势的解读，以及阅文在短剧跟AI漫剧相关的这个收入有多少的空间？此外随着阅文平台上AI漫剧规模逐步扩大，管理层预计AI漫剧对于传统的阅读内容的消费起到这个替代效应会持续多久？我来翻译一下。We have witnessed the rapid growth of short drama and AI-powered animated drama in China, wondering what is management's latest view on the industry's long-term growth trend and your outlook for China Literature's own revenue opportunity in the segment? Additionally, as the AI-generated content scales on China Literature's platform, how do management expect the substitution effect on the traditional reading consumption to persist?

Thank you.

好，谢谢你的问题啊，让我来回答一下这个问题。这个就谈到了短剧和漫剧啊，那我们看到现在短剧和漫剧呢，靠这种大批量的生产和流量驱动的粗放的模式呢，正在加速的出清。如果看趋势的话呢，正在是从量到质的这样一个转化过程中。所以行业的竞争逻辑呢，也是转向谁真正能把故事讲好，能够持续地产出爆款。所以这就对拥有大量的IP储备和精品制作能力的阅文呢是一个结构性的利好。因为阅文呢是拥有中国最大的原创文学库，那从源头呢解决了行业最核心的痛点，就是缺乏好故事。那我们的爆款的方法论呢也已经跑通，上半年短剧的爆款率呢达到了市场均值的4倍，AI漫剧的百万播放率是行业均值的5倍，破亿的作品呢我们累计有46部。在生态层面呢，我们此前针对AI漫剧的业务推出了火种计划，总投入超过1亿元人民币，从IP的开放、平台扶持、系统培训、资金支持四个维度构建行业的生态。那我们自研的漫剧助手DramaBuddy也已经服务了200多个工作室，为生态的建设提供了很强的技术支持。

This is on behalf of CEO of China Literature, thanks for your question. I will take your question regarding the short dramas and the AI animated dramas.

We believe the mass production and traffic-driven growth model for short dramas and AI animated dramas is rapidly fading, and the trend is shifting from quantity to quality. The competition now focuses on storytelling quality and hit-making consistency.

This represents a structural advantage for top-tier players like China Literature with rich IP reserves and premium content production capabilities. China Literature has the largest original literature IP library in China, addressing the industry's core problem at the source, which is the shortage of compelling stories.

Our proven methodology for hit-making is already delivering results. In the first half of the year, the hit rate of our short drama was 4 times the market average, and for AI animated dramas, the rate of titles exceeding 1 million views was 5 times the industry average, and 46 titles each exceeded 100 million views.

On the ecosystem front, we launched Project Spark (Huozhong Jihua), especially for AI animated drama business. The project plans to invest over 100 million RMB in building up the industry ecosystem across four dimensions: IP cooperation, platform support, systematic training, and funding.

Our in-house developed AI agent, DramaBuddy (Manju Zhushou), purpose-built for AI animated dramas, has also served over 200 studios, providing technical support for ecosystem development.

阅文在这个趋势中的策略呢也是非常清晰，简单讲呢就是依托IP，拥抱生态。那我们主动地加强剧本和IP开发，以及投流和商业化这两个大的环节，那把制作的、视觉化的制作环节呢更多的是用好外部工作室的能力。那这种自控两头、外包中间的轻资产的模式呢，也让我们能够充分地借力行业生态的快速扩张的产能。我想这也是当下最适配阅文的打法。我们认为呢，AI漫剧呢是IP从文字形态向视觉形态的自然延伸，和精品阅读呢会形成互补关系。今年以来，我们各改编的爆款呢也持续给我们的文字作品带来了反哺，特别是短漫剧的改编呢，显示出强劲的后劲。举例而言，我们的爆款漫剧《三天庇护》全网播放量突破了30亿，带动原著小说重回起点畅销榜前十。我们的短剧《我真没想重生啊》播出后，推动原作突破了十万均订，验证了优质视觉化内容可以为阅读业务输送增量的用户。

In response to this trend, China Literature's strategy is very clear, that is we leverage our rich IP reserve to embrace the entire ecosystem. We are proactively strengthening our capabilities in two critical procedures, including the development of script and IP, as well as user acquisition and commercialization, while outsourcing the visual production to external studios.

This asset-light model of controlling both upstream and downstream while outsourcing the midstream allows us to rapidly scale production capacity by leveraging the industry ecosystem, an approach that is most suitable to China Literature at this stage. We believe that AI animated dramas represent a natural extension of IP from text to visual formats, complementing our premium literature business.

Since the beginning of this year, various hit adaptations have been continuously feeding back positively into literature works. The adaptations of short dramas and AI animated dramas in particular have demonstrated strong momentum.

For example, one of our blockbuster AI animated dramas, 3,000 Shelters (Santian Bihu), has surpassed 3 billion views across all platforms, directly driving the original novel back into the top 10 of the best-seller ranking on Qidian. Following the release of our short drama I Really Didn't Want to Be Reborn (Wo Zhen Mei Xiang Chongsheng A), the original novel exceeded 100,000 average subscribers per chapter, validating that high-quality visual content can channel incremental users to our online reading business.

尽管存在非核心的阅读用户向漫剧用户迁移的情况，但是我们觉得漫剧的核心价值还是在于破圈，就是打破IP形态的边界，能够推动阅文海量的IP库和创作生态的视觉化的价值释放。我想这也是阅文最大的机遇。放在整个阅文的IP库的视角来看呢，目前被开发的IP占比不足千分之一，所以随着AI工具持续降低制作门槛，未来IP的开发速度和覆盖的广度都还有巨大的提升空间。

While some non-core readers may migrate to AI animated dramas, the core value of AI animated dramas lies in reaching a wider audience in addition to the original users and breaking through the boundaries of IP formats, unlocking the value of visualizing China Literature's vast IP library and creative ecosystem. This is our greatest opportunity.

If we look at the entire IP library of China Literature, the proportion of IP that has been developed so far is less than 0.1%. As AI tools continue to lower the barriers to content production, there remains enormous room for growth in both the speed and scope of IP development going forward.

好，谢谢。 Thank you.

谢谢管理层接受我的提问。然后我还是想问一下短剧和漫剧的一个分发上的一个情况。因为可能大家看到整体的渠道的竞争可能会有一些这种潜在的挤压，所以我不知道就是说我们能不能分享一下漫剧和短剧在分发渠道上整体的分布的一个情况，比如说像红果，或者是我们现在在做一些自有的APP，还有微信小程序的一个占比。以及我们后面就是把漫剧还有短剧这些内容去做到海外的发行的一个战略，大体上是怎么样呢，可不可以分享一下？And I will translate the question myself. I want to ask about the competitive dynamic and mutual displacement between manga dramas and short dramas in terms of distribution channels.

How are the distribution channels for the two formats distributed overall? For example, the share between Hongguo and self-developed apps and mini-programs.

What are the overseas strategies for your manga dramas and short dramas going forward? Thank you.

好，谢谢你的问题啊。就是我们现在的短剧和漫剧呢是全渠道分发的策略，所以包括红果、抖音、快手、视频号、B站这些主流的平台，还有我们还有自有的小程序和APP。此外呢，我们现在也在和长视频平台在展开合作。上半年呢，我们有超过一半的漫剧和短剧在红果投放。我们是目前是不依赖单一渠道。那具体投放在哪个平台，然后采取付费还是免费，那我们会根据每部作品的内容的特性还有市场的窗口来判断。未来呢也会随着这些视频平台的格局的变化呢，我们也会灵活地去调整我们的渠道策略。

China Literature CEO Mr. Hou will take this question.

Our short dramas and the AI animated dramas are distributed on a full set of industry channels, including leading platforms such as Hongguo, Douyin, Kuaishou, Tencent Video Accounts, and Bilibili, as well as self-owned mini-programs and apps. In addition, we are currently in discussions with long-form video platforms as well regarding potential partnerships.

In the first half of the year, over half of our short-form dramas and AI animated dramas were launched on Hongguo. We do not rely on any single channel.

Decisions on which platform a specific title is to be distributed on and whether to adopt a paid or free model are made by our operation teams based on each title's content features and the marketing timing. As the landscape of the distribution channels of video platforms continues to evolve, we will remain agile in adjusting our channel strategy accordingly.

在海外方面呢，我们今年推出了我们的海外的精品漫剧平台Toonscroll，年内呢会计划上线超千部的作品。那同时呢我们也在探索海外本土的原创IP的漫剧开发。那背后的逻辑呢也很清晰，因为全球的短剧和漫剧市场的空间是巨大的，那中国在短内容形态上的产业经验非常领先，具有突出的优势。其次呢，漫剧的题材呢以二次元、异世界、奇幻等类型为主，那这些品类天然的有很强的跨文化的共通性，海外的受众的接受门槛低。第三呢，AI大幅下降了、压缩了这些内容制作的成本，使得这个规模化出海在经济上可行。总体来说呢，我们的海外漫剧和短剧业务呢整体处于早期的探索阶段，后续呢我们也将在此取得实质性进展时适时向市场更新相关的数据。

This year, we launched our overseas premium AI animated drama platform, Toonscroll, and plan to release over 1,000 titles within the year. We are also exploring the development of AI animated dramas based on overseas original IP.

The rationale behind this strategy is clear. First, as the global market for short dramas and AI animated dramas is vast, and China has built up proven expertise in short-form content production that is readily exportable.

Second, AI animated dramas are predominantly centered around genres such as anime, isekai, fantasy, and these categories inherently carry stronger cross-cultural appeal and face lower barrier to be accepted by international audience. Third, AI has significantly reduced content production costs, making large-scale overseas expansion economically viable.

In general, our overseas short drama and AI animated drama business remains in its early stage of exploration. We will provide timely updates to the market as we make meaningful progress going forward.

补充两点指出呢，就是说漫剧呢是一个快速发展的市场，那这个市场的潜力非常大。主要原因呢是因为漫剧呢是当前AI视频应用最直接的场景，而这个AI呢对于视频的制作的赋能呢已经贯穿了全流程，从前期的策划中的辅助选题、剧本的生成、场景的设计，到中期拍摄中的虚拟制片，包括虚拟的场景，以及后期制作中实现的智能剪辑、特效合成。所以视频制作的各个环节呢都在被AI重新定义。那我们也预测呢，未来真人何和AI的界限呢会持续的模糊，也将重塑整个内容生产。所以短剧和漫剧未来的内容形态呢很可能会超出我们今天想象的边界。

Meanwhile, we would also like to note that the AI animated drama industry is growing very rapidly and the market potential is enormous. AI animated drama represents one of the most direct use cases for AI-generated video technology, and AI empowers the entire workflow of video production, including pre-production, where it assists in topic analysis, script generation, and scene design; filming, where it enables virtual production and virtual stage rendering; and post-production, where it delivers intelligent editing and automated visual effects composition.

Every stage is being redefined by AI. We expect the boundaries between human-created and AI-generated short dramas to become increasingly blurred over time, which will fundamentally reshape content creation.

The future forms of short dramas and AI animated dramas may probably extend far beyond what we can imagine today. 谢谢。

Thank you.

谢谢管理层，我是摩根士丹利的Rebecca。我的第一个问题是关于在线阅读业务的。刚才管理层其实在回答漫剧问题的时候稍微提到了在线阅读，在线阅读的非核心用户会有所流失。那我们上半年在线阅读也出现了一个同比的收入的下滑，想请教管理层如何理解这一次的下滑？那这是一个阶段性的变化呢，还是结构性的变化？管理层对这块业务的中长期的展望是什么样的？然后短期的话有什么策略可以稳住这一块的基本盘？I'll translate myself. My question is regarding the online reading business.

Could management help us break down the key drivers behind the weakness in the first half, and which factors are the temporary and which may disrupt more structural changes? Also could management share the medium- or long-term outlook for the online reading business, and what are the key drivers for that?

Thank you. 好，谢谢。这个问题我们请黄总来回答一下。

好，Rebecca，谢谢你的问题啊。首先我想说的是，在线阅读业务在阅文看来长期还是保持稳态的，战略定位也没有发生改变。对于刚才你提到上半年收入的下滑的部分，我们看到的主要是一部分用户粘性较低的渠道端的调整，而核心付费阅读产品和生态依然是保持稳定的。具体的讲呢，首先，在我们的所有的用户中，自有平台的微信生态渠道中，有一部分变现效率相对较低的免费阅读的内容占比有所提升。第二个呢，就是分发内容的形态其实正在从纯文字向短剧、漫剧等视觉形态迁移，其实在我们看来这也是一个自然的生态再分配。用户的注意力向可视化的内容转移，而重要的是可视化的内容也是由我们自己的IP所孵化而来的，并且刚才讲到《三天庇护》的案例还有很多的案例，并且最终可以反哺到阅读的生态。所以呢，我们可以说用户价值在我们的生态内从文字端流向了视觉端，而这两端呢也都为阅文所拥有。

Thank you for the question. Mr.

Huang, Senior VP of China Literature, will take this question. From our view, the core online reading business will remain stable, with its strategic positioning keeping unchanged.

The revenue decline in the first half you mentioned was mainly due to the adjustments made for channels with lower user stickiness, while the core pay-to-read product and ecosystem remain steady. For our users, the proportion of free-to-read content with relatively lower monetization efficiency increased on our self-owned channels within Weixin ecosystem.

Secondly, the content distribution is shifting from text to visuals, such as short dramas and AI animated dramas. This is a natural reallocation of content and traffic in the ecosystem in our view.

Specifically, user attention is shifting toward visual content, while the visual content is adapted from our own IP and can ultimately feed incremental value back into the reading ecosystem, as we previously mentioned AI animated dramas such as 3,000 Shelters (Santian Bihu) and other project cases actually channeled incremental users back to the reading ecosystem. In this sense, user value is flowing from text to visual formats within our ecosystem, and both formats are owned by China Literature.

第二点我想讲，在线业务的根基没有动摇。今年上半年呢，我们的精品的创作者的生态保持是非常活跃的，头部的作家生态也很稳固。在最近的一年，阅文的白金大神的续约率是100%。与此同时间，我们也看到新生代的作家快速崛起。在最近的一年内，万订作品中，新人新作占比达到了54%。同时我们还保持着对于阅文站外的外部作家的吸引力。今年上半年，我们的投稿量其实同比是增长的，增长了14%，其中也包括了来自站外平台的多位优秀作家的投稿。而这背后呢是一套优质的、稳定的创作者生态和持续领先的孵化IP的这样的能力。这也正是为下游的短剧也好、漫剧也好、影视还有衍生品等业务去打下基础的核心资产。我们认为这也是阅文难以复制的护城河。

We believe the foundation of our online business remains solid. In the first half of this year, the ecosystem of our premium content creators stayed vibrant, and the top-tier writers continue to hold steady.

In the recent year, the contract renewal rates for our platinum and phenomenal writers reached 100%. At the same time, emerging-generation writers have been rising rapidly, with new writers and their debut works accounting for 54% of all titles that exceeded 10,000 average subscribers per chapter over the past 12 months.

We have also continued to attract external writers, with the submission volume we received growing 14% year-over-year in the first half of this year, including submissions from a number of quality writers previously active on other platforms. Behind all of this is a robust and stable creator ecosystem, along with consistently leading IP incubation capabilities.

These are the core assets that lay the foundation for downstream business such as short dramas, AI animated dramas, TV series, films, and merchandise, and we believe they also constitute the moat of China Literature that is difficult to be replicated.

而立足中长期呢，在线阅读的增长空间和应对策略主要集中在三个方面。第一个呢是继续夯实精品内容的生态，也我们拥抱并加速文字到视觉的内容形态升级，在放大IP价值的同时，也能够同时去反哺阅读。那第二个呢是从供给端扩容，维护好创作者的生态。第三个是出海，就坚定的推进出海战略，打开我们在海外的变现空间。这三者我们现在看来呢会形成合力，在稳定孵化优质内容的同时，也通过IP和AI的联合的驱动，就把单一的这种文字内容裂变成更加丰富的多媒体形态，也希望以此来推动阅文下一个阶段的增长。

Looking into the medium to long term, the growth potential and strategic focus for our online reading business are centered on three key directions. First, we will continue to solidify our premium content ecosystem, embrace and accelerate the content format upgrade from text to visuals to amplify IP value, while also feeding value back into the reading business.

Second, we will expand content supply and maintain a healthy and vibrant creator ecosystem. Third, we will firmly advance our overseas expansion strategy to unlock monetization opportunities in overseas markets.

These three measures will form powerful synergies, steadily incubate quality content, and transform text-based content into richer multimedia formats, driven by the joint integration of IP and AI to propel China Literature into its next phase of growth. 谢谢。

Thank you.

感谢管理层接受我的提问。这边有两个问题。第一是关于整体IP运营的。因为我关注到公司IP业务上半年多点开花，衍生品GMV增长亮眼，然后刚刚大家也都提到的短剧、漫剧孵化了新的增长点。那想请教管理层如何看待下半年的增长趋势，会有哪些增量，尤其是关于游戏授权，我们也注意到阅文授权的IP游戏大作其实下半年比较多的上线，这块会有一些增量的预期吗？然后第二个问题是关于新丽传媒的。长视频行业现在还处于一个调整期，那新丽作为行业领先的影视公司如何面临挑战，以及结合AI视频模型，怎么看待新丽后续的一个战略？谢谢，我自己翻译一下。Thanks management for taking my question. I have a couple of questions.

My first one is about our overall IP business. IP operations delivered broad-based growth in the first half, with particularly strong growth in merchandise GMV, while short dramas and AI animated dramas emerged as new growth drivers.

How does management view the growth outlook for the second half, and where do you expect the key incremental contributions come from? In particular, on game licensing, we have noticed several major games based on IP licensed by China Literature will launch in the second half.

Do you expect these titles to make a meaningful incremental contribution? My second question about New Classics Media is the long-form video industry is undergoing a period of adjustment.

As a leading television production company, how is NCM responding to the industry challenge? With the rapid development of AI video generation models, how does management view the company's strategy and opportunities going forward?

Thank you.

Our CEO Mr. Hou will take your question regarding our IP development, and later on Mr.

Cao from New Classics Media will take your question on media production.

确实如你所说，上半年我们的IP业务确实是多点开花，短剧、漫剧都孵化了新的增长点，而且衍生品的GMV也增长亮眼。展望下半年呢，我们的IP业务呢会继续保持增长的势头，尤其是在新业务方面多点开花。首先呢在短剧和漫剧的方面呢，我们会在保证爆款率的基础上的持续扩充产能，国内跟海外双线布局精细化的内容。短剧呢我们今年计划全年生产不少于200部，比去年呢增长70%。漫剧呢精品的月产量呢已经突破了100部，爆款的方法论呢也持续得到了验证。AI降低了视觉内容的供给门槛，其实是让优质的IP呢越发稀缺。上半年我们的短剧和漫剧的爆款率呢均高于行业均值的数倍，这背后呢也是我们长期积累的IP储备和全产业链的创作土壤，以及具备情感粘性、跨代际传播的故事内核。同时呢我们也将海外同步上线我们的精品的漫剧的平台，以进一步布局我们的精品化路线。

Yes, as you mentioned, our IP business in the first half delivered very good results in various aspects, with AI animated dramas and short dramas becoming our new growth drivers, and our merchandise business continued to achieve very good GMV performance and growth. Looking into the second half of the year, our IP business will continue to gain momentum, especially for the new business segment.

Specifically, for short-form drama and AI animated dramas, we are expanding production capacity while maintaining a high hit rate and pursuing a premium content strategy both domestically and internationally. Specifically, for short dramas, we plan to produce no fewer than 200 titles this year, representing an increase of approximately 70% year-over-year.

In terms of AI animated dramas, our capacity of premium productions has already exceeded 100 titles, and our proven methodology for creating hits continues to deliver results. While AI has lowered the barrier to visual content production, it has intensified the scarcity of high-quality IPs.

In the first half of the year, both our short dramas and AI animated dramas consistently outperformed the industry blockbuster rate average by several multiples, a testament to our deep IP reserve, a creative ecosystem spanning the full value chain, and story cores that deliver cross-generational emotional resonance. At the same time, we have also rolled out premium AI animated drama platforms both domestically and internationally to further strengthen our premium content strategy.

衍生品方面呢，我们在2026年的上半年在IP影响力、产品开发还有渠道拓展、品牌授权等四个维度持续同步发力，整体的势能呢增长明显。头部IP影响力方面呢，我们聚焦优势IP来做深做透，在品牌拓展、活动运营、体验打造三个层面同步加强，系统释放IP的势能。通过像叶修的生日会，还有异人男团出道等沉浸式的活动拉近和用户的距离，不仅激活了核心粉丝的复购，更在这个情感层面上加深了IP角色与用户的连接。在产品开发方面呢，阅文好物旗下的子品牌好物赏已经快速成为中国头部的国漫品牌，推出了多套优质的一番赏产品，覆盖了箱包、服饰、毛绒等全新的热门品类，满足了用户对不同衍生品的需求。那我们推出的产品呢已经上线的几乎都是秒售罄的状态。渠道拓展方面呢，我们的全渠道网络正在不断完善，包括线上小程序、直播间、电商旗舰店快速的增长，同时也配合线下门店体系的持续扩张。目前全国门店总数达到了17家。尤其是今年上半年呢，我们线上自营渠道GMV体量已经达到去年同期的3倍多，所以也印证了我们自营渠道的建设成效，也反映了用户对阅文好物品牌的认可度不断提升。品牌授权方面呢，今年以来呢我们持续和谷子潮玩、3C数码、食品饮料、服饰、连锁餐饮等各个领域的数百个商家的品牌达成了授权合作。展望下半年呢，我们将持续聚焦产品的迭代、渠道的拓展还有运营效率的提升，核心呢是推动利润转化效率的进一步提升，以实现更高质量、更可持续的增长。

In the first half of 2026, our merchandise business continued to gain momentum across four key dimensions: IP influence, product development, channel expansion, and brand licensing, resulting in apparently strong growth trajectory. Regarding top-tier IP influence, we are deepening our operations of flagship IPs and reinforcing them across three fronts, which are category expansion, event-driven activation, and user experience, to systematically unlock their full potential.

For example, our immersive events like the Glory Pilgrimage pop-up for Ye Xiu's birthday and the debut of the Outcast boy group brought the IP closer to users, driving repeat purchases among core fans while deepening emotional connections between our IP characters and their audience. On product development front, Yuewen Ichibankuji, the sub-brand of Yuewen Goods, has rapidly grown into one of China's leading domestic anime merchandise brands, with multiple premium Ichibankuji-style product series covering new and popular categories such as bags and luggage, apparel, and plush toys, addressing diverse fan demand for merchandise.

Virtually every product we have launched today has sold out within moments of release. Regarding channel expansion, our omnichannel network continues to improve.

Online mini-programs, livestreaming rooms, and e-commerce flagship stores are growing rapidly, while our offline store network is also expanding steadily, and currently we operate a total of 17 stores across the country. Notably, in the first half of this year, GMV from our online self-operated channels was 3 times that of the same period last year, underscoring both the effectiveness of our self-operated channel network and the users' growing brand recognition for Yuewen Goods.

Regarding brand licensing, since the beginning of this year, we have entered into licensing partnerships with hundreds of brands from a variety of industries, including goods and fashion toys, 3C digital products, food and beverage, apparel, restaurant chains, and others. Looking into the second half of this year in terms of merchandise business, we will continue to focus on product iteration, channel expansion, and operational efficiency improvements.

A key objective is to improve profit conversion efficiency and to achieve higher quality and more sustainable growth.

在海外方面呢，我们的出海业务整体处于快速的发育期，路径也非常清晰。在线阅读方面呢，作为出海内容的底座保持非常稳定的状态。AI的翻译呢持续驱动小语言、小语种的增长。同时呢我们也持续加速开发原创IP，已经有多本由海外本土作者创作的原创作品进入了线下出版、有声改编等多形态的开发。展望下半年呢，也计划有多部作品开启新的合作。在可视化和实体出海方面呢，我们的精品漫剧平台Toonscroll年内的计划上线超千部作品，首个全球潮玩集合店已经在新加坡开业，都为未来的业务增量提供贡献。

Regarding our overseas business, it is still in a growth phase with a clear strategic roadmap. The domestic online reading business currently supplies the content foundation for our international expansion, and AI-powered translation is accelerating global reach including those languages less commonly spoken.

The AI-powered translation is a key driver for the global reach. At the same time, incubation of original local IP is underway and steadily expanding.

Multiple original literature works created by local writers in overseas markets have already entered the adaptation stages into various formats, including offline publication and audiobooks, and we plan to initiate collaborations on a series of additional titles in the second half of the year. In terms of visualization and commercialization in the overseas markets, our premium AI animated drama platform Toonscroll plans to launch over 1,000 titles within the year, and we have opened our first global collectible toy concept store in Singapore, both of which will contribute to future business growth.

在游戏方面呢，我们是通过向游戏厂商授权优质IP来获取版权金加上流水分成。这个对于阅文来讲呢是一种高毛利、低风险的常态化收入，也会进入我们的IP运营业务里面。我们展望下半年呢会有多款的重点授权的游戏预计上线，代表性的项目包括由三七互娱发行的MMO《斗破苍穹：斗帝之路》已经在2026年7月29号进行了公测。模拟经营手游《赘婿》会定档于明天，也就是8月12号进行全平台公测。由快手研发的UE5的旗舰MMO《诡秘之主》定于8月21号进行全平台公测，目前的预约已经全面开放。

In terms of games, we license our premium IP to game studios, earning both upfront licensing fees and a grossing share, grossing sharing, which is a high-margin, low-risk revenue stream for China Literature that contributes to our IP operations business on a recurring basis. Looking into the second half of this year, a number of key game titles are scheduled for launch.

Notably, projects include first of all an MMO game adapted from Battle Through the Heavens (Doupo Cangqiong) published by 37 Interactive Entertainment, which started open beta testing on July the 29th, 2026. Secondly, a management simulation mobile game adapted from My Heroic Husband (Zhuixu) is set to launch its open beta testing across all platforms tomorrow, August the 12th, 2026.

Third, a flagship UE5 MMO game adapted from Lord of the Mysteries (Guimi Zhi Zhu) developed by Kuaishou scheduled for open beta testing on August the 21st, 2026, for which pre-registration is now fully open.

以上是IP运营在下半年的一些相关情况。那关于新丽的问题呢，请曹总来回答。 好，我来回答。关于行业低迷的问题呢，我们认为呢，当前行业低迷的本质呢，是视频平台的采购的预算的收缩，与短剧对用户时长的分流，但用户对好内容付费的意愿并未消失。这轮调整出清的呢，是中庸的内容，头部精品长剧集呢反而会更加稀缺，其稀缺的溢价呢也会进一步的凸显。

The above are my comments on our IP business outlook, and next Mr. Cao from NCM will answer your question on media production.

We believe the current industry downturn reflects two underlying dynamics: platforms tightening content budgets and short dramas increasingly capturing users' attention. However, consumers' willingness to pay for high-quality content remains intact.

This adjustment cycle will accelerate the market curation, weeding out mediocre offerings. Premium long-form dramas will become scarcer, and their scarcity premium will grow.

当下的长剧市场呢，用户对内容的要求越来越高。我们的判断是电视剧的公司应当回归内容本身，专注于打造高质量有深度的精品剧集。一部精品剧沉淀下来的IP价值与情感连接，是公司内容生态的基石，而持续产出这样的精品，正是我们新丽的核心优势。

In the current long-form drama market, consumer expectations for content are higher than ever. We believe that drama studios should refocus on the fundamentals of content creation, with a dedicated emphasis on producing premium series of superior quality and depth.

The IP value and emotional connection built up by a premium drama forms the bedrock of our content ecosystem, and the ability to consistently produce such premium content is exactly New Classics Media's core competitive advantage.

关于AI技术部分呢，我们的看法是呢，AI视频模型会改变影视项目的生产流程、成本结构与生产速度，但是无法替代好故事、好表演加好审美这三大核心价值。当下呢我们正尝试将最新的AI视频技术应用于制作环节，重构和升级工作流，例如在剧本评估与结构拆解、美术概念与数字资产设计、虚拟场景与应景拍、运镜拍摄、各类特效合成的方面。但我们始终以专业人才的审美与判断为基准，故事是否有情感深度，剧本质量是否过硬，仍由创作者来把控。说到底，专业的创作者人才才是项目成功的关键。

Regarding AI technology, we believe that while AI video models will fundamentally reshape the production workflows, cost structure, and delivery speed of film and television projects, they cannot substitute for core value of compelling storytelling, outstanding performance, and refined aesthetics. Currently, we are exploring the application of the latest AI video technologies into our production process to reconstruct and upgrade our workflow, spanning script assessment and structural deconstruction, concept art, and digital asset design, virtual scene design and cinematography, and visual special effects, among others.

That said, all of these efforts are anchored by the aesthetic judgment and creative instincts of our professional talent. Whether a story carries emotional depth and whether a script meets the highest standards ultimately rest with our creators.

Ultimately, professional creative talent is what makes a project succeed.

7月份，阅文集团与上海浦东新区合作共建了人工智能文创产业基地，引入了文化创作者入驻，并落地了一系列的AI工业化设施，目标是搭建AI精品文创的工业化体系。其中AI影视制作是重要的组成部分，新丽也将深度参与。

In July, China Literature entered into a partnership with Shanghai Pudong New Area to co-establish the AI Cultural and Creative Industry Base, which has already attracted cultural creators and rolled out a series of AI industrial facilities. The initiative aims to establish an industrialized framework for high-quality AI-powered cultural and creative content, with AI-powered film and television production serving as an important part, and New Classics Media will also be deeply involved.

面向未来，新丽将坚守头部内容创作者的定位，在剧本孵化、前期筹备、拍摄到后期制作的每一个环节精益求精，力求为观众带来更多高品质的作品。同时，我们也会把握科技创新带来的红利，用AI重塑生产力，包括控制成本、提升效率、扩大产能等等，进一步巩固我们在精品剧集市场的领先地位。

Looking into the future, New Classics Media will stay true to its identity as a top-tier content creator, with a relentless focus on excellence across the entire production process, from script incubation and pre-production planning to filming and post-production, in order to bring more high-quality works to our audience. At the same time, we will capitalize on the dividends of technological innovation, deploying AI to reshape our productivity, including cost control, efficiency improvement, and capacity expansion, thereby further strengthening our market leadership in the premium drama segment.

Thank you.

Thank you, operator. I will now conclude today's call.

On behalf of the entire China Literature management team, I would like to thank you for your participation on today's conference call. If you have further questions about the company, please feel free to contact us.

Thank you, and goodbye.