On August 21, Zhejiang Publishing United Group Media Co., Ltd. (stock code: 601921.SH) opened at its daily limit, but was quickly broken, and climbed back up to the limit after high trading volume.

Involving the “Monkey King” concept, Zhejiang Publishing United Group Media Co., Ltd. has achieved two consecutive daily limit gains. However, the company recently stated that it is merely the publisher of the game “Black Myth: Wukong”, responsible for content review and publishing applications.

Lanfucaijing.com notes that yesterday (August 20), Zhejiang Publishing United Group Media Co., Ltd. reached its daily limit with high trading volume, but post-session data revealed a significant outflow of funds. Additionally, the company's revenue and net profit both declined in the first half of 2024, indicating operational difficulties. Can this popular game boost the company's performance?

Merely the publisher, responsible for content review

On August 20, the first domestic 3A game, “Black Myth: Wukong”, officially launched, instantly igniting the internet and topping trending lists on various social media platforms both domestically and internationally. Within an hour of its release, the number of concurrent Steam users surpassed one million. By the evening, the peak concurrent users on Steam exceeded two million.

Relevant statistics show that by the evening of August 20, over three million copies of “Black Myth: Wukong” had been sold on Steam. When combined with sales from other platforms such as WeGame and PlayStation, total sales exceeded 4.5 million copies, generating over 1.5 billion yuan in revenue.

The “Monkey King” is also stirring up the capital market. On August 20, Zhejiang Publishing United Group Media Co., Ltd. closed at its daily limit, and again reached the limit during intraday trading on August 21. However, post-session data on August 20 revealed that some institutional investors sold the stock at a high price, with a total amount of approximately 149 million yuan, indicating significant disagreement among investors, with some choosing to lock in profits.

Zhejiang Publishing United Group Media Co., Ltd. recently stated that its subsidiary, Zhejiang Publishing Group Digital Media Co., Ltd. (hereinafter referred to as “Zhejiang Digital Media”), is the publisher of the game “Black Myth: Wukong”, primarily responsible for content review, publishing applications, and obtaining publication numbers.

The company also noted that game profits primarily reside with developers and operators, and specific revenue sharing arrangements are currently unclear.

Revenue and net profit both declined in the first half

According to the company's official website, Zhejiang Publishing United Group Media Co., Ltd. was established in 2016 and listed on the Shanghai Stock Exchange in July 2021. Its parent company, Zhejiang Publishing United Group, has been recognized as one of China's Top 30 Cultural Enterprises for 16 consecutive years.

Zhejiang Publishing United Group Media Co., Ltd. focuses on publishing and distributing books, electronic audio-visual products, and periodicals, integrating emerging industries such as digital publishing, digital media, digital marketing, information technology services, and online education.

From 2021 to 2023, the company's performance remained relatively stable, with net profits attributable to shareholders of the parent company reaching 1.317 billion yuan, 1.414 billion yuan, and 1.509 billion yuan, respectively, maintaining a trend of continuous growth. However, in the first half of 2024, the company's performance declined, with net profits attributable to shareholders of only 506 million yuan, a year-on-year decrease of 30.03%.

Regarding this, Zhejiang Publishing United Group Media Co., Ltd. explained that the cancellation of the 2024 income tax exemption policy resulted in the confirmation of significant income tax expenses, leading to a year-on-year decrease in net profits attributable to shareholders.

Furthermore, the company's revenue in the first half of the year was 5.233 billion yuan, a year-on-year decrease of 5.06%, while the net cash flow generated from operating activities decreased by 43.68% year-on-year. Zhejiang Publishing United Group Media Co., Ltd. attributed this decline in sales revenue to a reduction in general book sales. In the first half of 2024, the company's general book publishing business generated a total sales value of 3.566 billion yuan, an increase of 1.31% year-on-year. However, corresponding revenue totaled 833 million yuan, a decrease of 4.62% year-on-year, with a gross margin of 26.73%, a decrease of 4.74 percentage points compared to the same period last year. This underperformance significantly impacted Zhejiang Publishing United Group Media Co., Ltd.'s overall revenue figures.

Future focus on digital publishing business

In its interim report, Zhejiang Publishing United Group Media Co., Ltd. noted that Zhejiang Digital Media is a wholly-owned subsidiary of the company. According to Tianyancha, Zhejiang Digital Media was established in 2009 and is currently wholly owned by Boku Digital Publishing Media Group Co., Ltd. (hereinafter referred to as Boku Digital Media), which is in turn wholly owned by Zhejiang Publishing United Group Media Co., Ltd.

According to the interim report, Boku Digital Media incurred a net loss of 3.6118 million yuan in the first half of 2024, but Zhejiang Publishing United Group Media Co., Ltd. did not disclose detailed operating data for Zhejiang Digital Media in its interim report.

In fact, in addition to being the publisher of the game “Black Myth: Wukong”, Zhejiang Digital Media also operates the company's “Torch Knowledge Service Platform.” In Zhejiang Publishing United Group Media Co., Ltd.'s overall plan, Zhejiang Digital Media will leverage its full digital publishing license to continuously optimize its digital publishing business and further promote the mutual empowerment of high-quality content and the “Torch” platform. However, the interim report did not disclose detailed operating data for the digital publishing and digital media businesses.

Regarding the currently popular short video business, Zhejiang Publishing United Group Media Co., Ltd. also has a presence. The company previously revealed during institutional research that it actively promotes the operation and film adaptation of book IPs and has conducted feasibility assessments for multiple projects. In the future, the company will focus on developing its digital publishing business, exploring operational models, and cultivating new growth points.

Overall, Zhejiang Publishing United Group Media Co., Ltd.'s operating performance declined in the first half of this year, and the recent popularity of the “Monkey King” concept may merely represent short-term speculative behavior in the capital market, with limited long-term impact on the company's operations. Going forward, Zhejiang Publishing United Group Media Co., Ltd. should prioritize its digital publishing business, and Lanfucaijing.com will continue to track this listed company's performance.