Enlight Media is riding high on the colossal success of Ne Zha 2, but beneath the glittering headlines, a critical question looms: Can this triumph be sustained, or is it a fleeting moment of glory? The company’s latest financial report reveals a record-breaking year, yet it’s hard to ignore the shadows cast by its blockbuster hit. Here’s the full story—and the part most people miss.
Enlight Media has just posted its most impressive performance since going public, fueled almost entirely by the runaway success of Ne Zha 2. According to its October 28 financial report, the company raked in RMB 3.616 billion (USD 506.2 million) in revenue for the first three quarters of 2024, a staggering 150.81% year-over-year (YoY) increase. Net profit soared even higher, jumping 406.78% to RMB 2.336 billion (USD 327 million). The third quarter alone saw revenue hit RMB 374 million (USD 52.4 million), up 247.54% YoY, while net profit skyrocketed 993.71% to RMB 106 million (USD 14.8 million).
But here’s where it gets controversial: Ne Zha 2 isn’t just a hit—it’s a juggernaut. With a global gross of RMB 15.9 billion (USD 2.2 billion), it’s the fourth-highest-grossing film of 2024, contributing an estimated RMB 3.1 billion (USD 434 million) to Enlight’s coffers. Yet, despite this windfall, the company’s stock price has been on a rollercoaster ride. After tripling to RMB 41.22 (USD 5.8) in February, it halved a month later to RMB 20 (USD 2.8). Even record profits failed to move the needle on earnings day. Is Enlight’s reliance on a single blockbuster a strength or a vulnerability?
Enlight’s strategy extends beyond the box office. During the third quarter, the company invested in films like Dongji Rescue, Girl on Edge, and Fairizest: Rally for Pally, none of which performed well. Yet, profits still climbed, thanks in part to the long-tail effect of Ne Zha 2’s merchandise sales. This hints at Enlight’s growing ability to monetize its intellectual property (IP) beyond ticket sales. However, consumer enthusiasm for Ne Zha 2 merchandise has waned rapidly, dropping from several hundred million RMB during its initial release to under RMB 100 million (USD 14 million) by Q3. Is this a missed opportunity, or is Enlight’s IP strategy simply ahead of its time?
Critics argue that given Ne Zha 2’s popularity, its derivative business should have performed better, suggesting Enlight’s IP monetization capabilities are underwhelming. Yet, Enlight remains one of China’s strongest film companies, often likened to a homegrown Disney. Its success is backed by valuable IP, an integrated industry chain, and a high-risk, high-reward investment strategy.
Take Coloroom Pictures, Enlight’s animation arm, for example. Founded a decade ago, Coloroom adopted a venture capital-style approach, investing widely in promising animation studios. This strategy reduced creative risk while fostering partnerships. In 2015 alone, Coloroom backed over 20 companies across the animation value chain, including director Yang Yu (aka “Jiaozi”) and Cococartoon, both of which have since paid dividends. Enlight’s dual role as distributor and shareholder allows it to capture profits on multiple fronts, a strategy Chairman Wang Changtian has mastered.
Wang’s foresight is also evident in Enlight’s 2016 investment in Maoyan Entertainment. By acquiring a 57.4% stake, Enlight positioned itself as a key player in the online ticketing era, securing prime screening slots for its films. But as the industry evolves, can Enlight maintain its edge?
Ne Zha 2’s dominance highlights a broader industry issue: the Chinese box office is increasingly reliant on a few megahits. While the first half of 2024 saw total revenue reach RMB 29.23 billion (USD 4.1 billion), up 22.9% YoY, over half of that came from the Lunar New Year period, with Ne Zha 2 alone accounting for 52.8%. Afterward, the box office slumped, with no month from March to June surpassing RMB 2 billion (USD 280 million).
This polarization is exacerbated by filmmakers crowding into safer release windows, primarily around major holidays. “It’s like fishing in a shrinking pond,” one producer noted. Animation studios, with their long production cycles, are particularly vulnerable, cutting costs and labor to stay afloat. Ne Zha 2’s end credits list over 100 animation suppliers, a testament to the industry’s fragmentation, where top studios thrive while smaller ones struggle.
So, what’s next for Enlight? With a strong content pipeline and distribution network, the company holds some of the best cards in China’s film industry. But it needs patience from the market—a rare commodity today. As Enlight continues to bask in Ne Zha 2’s glow, its true turning point may come when Coloroom Pictures steps into the spotlight.
What do you think? Is Enlight’s success sustainable, or is it too dependent on a single hit? And can China’s film industry break free from its reliance on blockbusters? Let’s discuss in the comments!
