China Literature takes 28.22% stake in animation studio Yihua Kaitian (YHKT) for US$55M
What's the deal? China LiteratureDealroom has a profile for this one. Try Dealroom → (known as Yuewen Group), the Tencent-backed online literature giant, is making a strategic investment in Yihua Kaitian, one of China's leading original animation studios. The deal, disclosed in a related-party transaction announcement on June 2, gives Yuewen a 28.22% stake in the studio for roughly US$55M.
Yihua Kaitian is best known for producing animated adaptations of major Chinese IP, including The Three-Body Problem , Ling Long: Incarnation , Mo Jing Nuo De Lin , and Feng Wei Ying Xiong . The company started as an original animation IP creator and has been expanding across the value chain.
Why now? Chinese animation — or donghua — is experiencing a boom, with audiences and platforms hungry for high-quality original content. Yuewen sits on one of the world's largest libraries of online literature IP, and securing a stake in a top-tier animation studio gives it a direct pipeline to turn those stories into screen-ready properties.
The deal reflects a broader push by China's entertainment conglomerates to lock down the IP-to-screen supply chain, from written works through animation and beyond.
What could go wrong? Animation production is capital-intensive and hit-driven. Even well-regarded studios can stumble if a flagship project underperforms. As a related-party transaction — both companies have ties to Tencent — the deal will also face scrutiny on whether its terms reflect fair market value.
Integration risk matters too. Creative studios often chafe under corporate owners whose strategic priorities shift.
The signal: This investment is the latest sign that China's content giants are betting heavily on animation as a growth engine. With live-action production costs rising and donghua gaining mainstream acceptance, studios that can reliably produce premium animated series are becoming prized strategic assets. Yuewen's move signals that the race to control the full IP lifecycle — from novel to screen — is accelerating.
Read more: IT桔子
