China Star Entertainment (00326.HK) saw its gross profit margin jump by 41 percentage points, with the multimedia segment contributing nearly 80% of revenue.

Live streaming data from August offers a perspective for understanding the shifts in China Star Entertainment's business.

According to the performance report for Xiang Zuo Luxury Goods' debut live stream, total GMV for the single session reached RMB 150 million, maintaining its top position on the overall sales leaderboard. Of this, luxury bags accounted for approximately RMB 110 million in GMV, while luxury watches and jewelry contributed around RMB 40 million. LV items alone generated about RMB 30 million, and Cartier watches approximately RMB 25 million. The session attracted over 7 million viewers and secured more than 20,000 luxury goods orders, ranking first on multiple daily charts including clothing, bags, accessories, and fashion luxury.

Comparing this figure with the listed company's interim results: In the first half of 2026, China Star Group's multimedia and entertainment business generated revenue of HK$75.715 million; the GMV from its August debut was approximately twice the total revenue of this business in the first half. Business growth momentum in the second half has strengthened compared to the interim reporting period.

Notably, there is a connection between Jacky Xiang's live-streaming business and the listed company's core operations. According to China Star Group's ESG report, the company's multimedia and entertainment operations in mainland China are managed by Hangzhou Yingming Xiangtai Media Co., Ltd., covering live e-commerce, multi-channel operations, and sales of proprietary brand products. A traceable commercial link has been established among celebrity IP, live-streaming transactions, and the listed company's multimedia segment.

Interim report data: Gross margin increased by 41.7 percentage points, and losses narrowed significantly.

On August 28, 2026, China Star Group (00326.HK) released its interim results. The data showed that the loss attributable to owners amounted to HK$56.094 million, a year-on-year narrowing of 49.41%; gross margin rose from 29.8% in the same period last year to 71.5%, an increase of approximately 41.7 percentage points.

In terms of revenue structure, the group's revenue in the first half of 2026 was HK$95.314 million, with gross profit of HK$68.126 million, representing a year-on-year decline of approximately 10.8%, which was smaller than the decline in revenue. The main drivers for the improvement in the income statement included adjustments to the revenue structure, cost control, and a decrease in write-downs related to real estate operations.

From a business structure perspective, the company is driven in the short term by the profitability of its multimedia and entertainment business, in the medium term by Macau property deliveries and cash recovery to repair the balance sheet, and in the long term by the continuous construction of a closed loop involving 'celebrity IP + live e-commerce + short drama content'.

Revenue structure: Multimedia business accounts for 79%, becoming the largest source of revenue.

Segmented business data further reveals changes in the revenue structure.

In the first half of 2026, revenue from the multimedia and entertainment business reached HK$75.715 million, accounting for approximately 79% of the company's total revenue, making it the largest source of income. Segment profit for this business reached HK$50.859 million, turning from a loss in the same period last year (a segment loss of approximately HK$3.837 million) to a profit. Factors contributing to the profit improvement include the clearance of low-margin businesses, an increased proportion of high-margin SKUs and proprietary brands, and optimized efficiency of streamers and back-end operations.

Revenue from property development and investment operations was HK$19.594 million, accounting for approximately 21%. Inventory write-downs for properties in the first half of 2026 were approximately HK$16 million, a significant decrease from approximately HK$43.944 million in the first half of 2025, alleviating pressure on asset quality. The pre-sales and subsequent delivery schedule of Macau projects will provide new room for revenue recognition in the second half. $CHINA STAR ENT (00326.HK)$

The core driver behind the improvement in gross margin lies in the differing profit structures of the two business segments. Property development follows a capital-intensive model, where profits are closely tied to the pace of sales recognition. In contrast, live-streaming e-commerce is characterized by an asset-light operation; under the commission-sharing and supply chain markup models, marginal costs are lower, leading to more direct profit conversion. A gross margin of 71.5% indicates that the company's strategic focus has essentially shifted to an asset-light trajectory.

Key highlights for the second half: Traffic growth, short-form dramas, and property deliveries

The live-streaming data from August was not an isolated incident. On June 23, 2026, Jacky Heung and his brother Jimmy Heung conducted their first joint live stream, with single-session sales exceeding RMB 15 million. The account gained approximately 110,000 new followers in a single day, and peak concurrent viewership surpassed 100,000. Related topics generated a total exposure of approximately 8.206 billion across the internet, and the Douyin account gained over 340,000 followers in the past 30 days. The short-form drama 'Hidden Identity: Winds Rise in Tianjin,' starring Jacky Heung, exceeded 100 million views within 24 hours of its release, with cumulative views subsequently surpassing 2 billion.

Regarding the family IP matrix, Tiffany Chen’s team has deeply cultivated live-streaming e-commerce infrastructure and high-net-worth trust endorsements, while Jacky Heung leverages luxury goods and content expressions that resonate with younger users to amplify transaction traffic. The company plans to launch short-form dramas in the second half of 2026. The market acceptance of Jacky Heung’s dramas provides a reference model for the synergy of 'IP + Live Streaming + Short-form Dramas.'

On the real estate front, the Macau C7 property 'Tianxi Lake' has entered the delivery observation period. The project has completed topping-out and obtained pre-sale permits, with over 220 of the 298 residential units already pre-sold. As occupation permits are secured, deliveries are recognized, and cash collection progresses, the related revenue recognition is expected to simultaneously improve full-year financial performance.

Conclusion

Based on the August live-streaming data and changes in interim report gross margins, the trend in the company’s revenue structure is quite clear. The multimedia and entertainment segment now accounts for 79% of total revenue, becoming the primary income source. The delivery pace and cash collection status of the Macau real estate projects will influence financial performance in the second half of the year.

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