(Yicai) June 3 -- China Literature, China’s largest online literature platform, will acquire a controlling stake in YHKT Entertainment for CNY400.8 million (USD59.2 million), bringing the producer of Ling Cage and co-producer of the animated adaptation of The Three-Body Problem deeper into its intellectual property ecosystem.

China Literature will purchase a 28.2 percent stake in Wuhan-based YHKT from Linzhi Lichuang, an investment vehicle controlled by Tencent Holdings, increasing its ownership to 59.7 percent, the Shanghai-based e-book platform announced yesterday. Upon completion of the transaction, Linzhi Lichuang will no longer hold any equity in YHKT.

The acquisition underscores China Literature’s push to strengthen its animation and content-production capabilities as it expands beyond online literature. Tencent, which owns about 56 percent of China Literature, remains the company’s controlling shareholder.

Founded in 2015, YHKT is best known for producing the science-fiction animated series Ling Cage and co-producing the animated adaptation of Liu Cixin's The Three-Body Problem. Ling Cage has released two seasons, in 2019 and 2025, and generated more than 10 billion views across online platforms, according to China Literature. The company said the acquisition will help strengthen its ability to commercialize original IP and develop globally recognized science-fiction franchises.

YHKT possesses top-tier capabilities in long-form animation production, China Literature said, noting that the company has developed its own animation workflow platform and assembled a team dedicated to large-scale narrative game development. The acquisition will strengthen China Literature's end-to-end IP operating capabilities, spanning incubation, visualization and commercialization, it added.

China Literature said it will leverage its resources to pursue deeper cooperation with YHKT and work to establish Ling Cage and other original properties as globally recognized science-fiction IPs.

Founded in 2013, China Literature has evolved from a web literature platform into an entertainment group spanning animation, film and online games. The company’s earnings came under pressure last year as fewer film and television projects were released. Net loss widened 271 percent from a year earlier to CNY776 million, while revenue fell 9 percent to CNY7.4 billion (USD1.1 billion), according to its annual report.

China Literature's shares [HK: 0772] closed down 3.4 percent at HKD24.78 (USD3.20) today, extending their decline this year to 25 percent.

Editor: Emmi Laine