(Yicai) Aug. 11 -- Profit at China Literature, the e-book platform of Tencent Holdings, surged 65 percent in the first half from a year ago through major belt-tightening, and having launched a large language model to help online writers, it plans to double down on artificial intelligence, the chief executive said.

Net profit was CNY376.7 million (USD52.1 million) in the six months ended June 30, the Shanghai-based company said in an earnings report released yesterday. Revenue fell 20 percent to CNY3.3 billion (USD458.2 million).

China Literature cut costs in the period, including slashing sales and marketing expenses by 26 percent. In particular, it shrank the cost of marketing to acquire low-return users so as to bolster operational efficiency. That weighed on revenue, but income from core products kept growing.

“China Literature continued to prioritize quality over quantity, focus on creating enduring and high-quality IP, and improve operational efficiency,” Chief Executive Hou Xiaonan said in a statement.

The average number of monthly active users fell 20 percent to 211.7 million in the first half, while the number of monthly paying users rose 9 percent to 8.8 million, the report showed.

China Literature plans to integrate AI-generated content into all aspects of business, Hou said on the company’s earnings conference call. That entails helping authors to create content, enrich the interactive user experience, and develop derivative works.

AIGC can significantly reduce repetitive work and allow writers to focus on the creative aspects to increase productivity, he added.

Last month, China Literature unveiled its self-developed LLM called Yuewen Miaobi or Smart Pen, along with a related writing assistant software. Hou, who took up the reins in May, has focused on LLM development since the start. He established a research and development department dedicated to AI as part of the firm’s organizational restructuring.

Shares of China Literature [HKG: 0772] rose 0.6 percent to end at HKD32.35 (USD4.14) in Hong Kong today. They have gained almost 7 percent so far this year.

Editor: Emmi Laine