Company Overview

（1） Introduction to Zhangyue Technology

Zhangyue Technology (full name Zhangyue Technology Co., Ltd.) was established in September 2008, focusing on digital reading and providing high-quality book content and intelligent service experience to users in more than 150 countries and regions around the world. It is one of the world's leading digital reading platforms. The vision of Palm Reading Technology is to become the world's most professional reading platform, and the mission of Palm Reading Technology is to make reading ubiquitous. On September 21, 2017, Zhangyue Technology Co., Ltd. was listed on the Shanghai Stock Exchange.

1. Enterprise advantages

(1) Zhangyue Technology has a large amount of high-quality book resources

After years of accumulation in the field of book content, Zhangyue Technology has established good partnerships with thousands of publishing houses, copyright agencies, literary websites, etc., thus possessing a large number of high-quality genuine book resources. The book resources owned by Zhangyue Technology cover a wide range of categories, including serious literature, online literature audiobooks, comics, magazines, and other types, thus meeting the reading needs of users in various categories and scenarios. At the same time, the book resources owned by Zhangyue Technology include a lot of high-quality boutique content, such as classic works such as "Ordinary World", "One Hundred Years of Solitude", "The Three Body Problem", "Flowers", "The Legend of the Condor Heroes", "Song of Ice and Fire", "Harry Potter", etc. In addition, Zhangyue Technology has also developed a "Zhangyue Literature" content incubation ecosystem, aiming to generate high-quality original content through mining, signing, cultivation, recommendation, and derivative value-added methods, further increasing the resources of high-quality original books. Currently, "Zhangyue Literature" has signed tens of thousands of authors.

(2) Zhangyue Technology has industry-leading technological advantages

Zhangyue Technology attaches great importance to product research and innovation. It has not only independently developed a digital reading platform, but also continuously optimized the details and performance of products around the product strategy of optimizing user experience. In addition, Palm Reading Technology has also pioneered innovative technologies such as 3D simulation page flipping and eye protection mode in the industry. At the same time, Palm Reading Technology has formed the core advantage of ByteSet in the fields of document recognition, conversion, continuation reading, and digital content hardcover layout technology.

(3) Zhangyue Technology attaches great importance to intellectual property protection

Zhangyue Technology is committed to strengthening intellectual property protection and has independently developed and built a copyright support system platform with massive content copyright management capabilities. This platform has multiple warning mechanisms, copyright risk identification, and risk response plans, providing good protection for the copyright rights and interests of cooperative publishing institutions, content suppliers, and authors. Based on this, Zhangyue Technology has also begun to devote itself to the sales and development of electronic copyrights for high-quality online literary works, as well as derivative adaptation copyrights for audio, film, short dramas, games, anime, etc., exploring deep development based on high-quality IP and providing more possibilities for copyright derivation.

(4) Zhangyue Technology utilizes digital technology for precise operation

Zhangyue Technology conducts precise operations guided by content mining and user behavior, using big data technology to screen high-quality content and efficiently and accurately reach users, forming a refined and efficient digital reading operation system. In addition, Zhangyue Technology is committed to creating a new digital reading platform and constantly exploring the application of new technologies in the field of cultural reading. Currently, it has various reading terminals such as apps, e-book readers, and digital borrowing all-in-one machines. It can also customize personalized reading scenarios according to customer needs and create intelligent reading spaces.

2. Business layout

The main business of Palm Reading Technology is Internet digital reading services and value-added services. It mainly obtains digital content sources of legitimate books from publishing companies and literary websites. After editing, producing and aggregating digital content, it issues digital book products to the Internet. At the same time, it also works on the copyright operation of network original literature, as well as flow value-added services based on its own Internet platform. The main businesses under Palm Reading Technology include Palm Reading Selection, iReader Reader, Palm Reading International Edition, Palm Reading Extracurricular Books, Palm Reading Bookmakers, and Palm Reading Translation Apes (see Table 1).

表1 掌阅科技业务布局

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Table 1 Business Layout of Palm Reading Technology

（2） Development history of Zhangyue Technology at home and abroad

1. Domestic development history

Zhangyue Technology was founded in September 2008, initially called "Zhangzhong Haoyue". In 2011, it officially launched the Zhangyue App, providing electronic Chinese reading. In 2013, it was the first in the industry to achieve technological innovations such as 3D simulation page flipping and eye protection mode. Founded in 2015, Zhangyue Literature has become the content production and incubation center of Zhangyue Technology. In the same year, Palm Reading Technology launched the first iReader e-book reader and has been constantly evolving since then, providing readers with a better reading experience through technological innovation. In 2016, Palm Reading Technology established the Palm Reading Bookmaker Platform, dedicated to improving the quality and efficiency of e-book production. In June of the same year, the number of Palm Reading Technology users exceeded 600 million. In September 2017, Zhangyue Technology was listed on the main board of the Shanghai Stock Exchange. In 2018, Palm Reading Technology launched Palm Reading extracurricular books focusing on teenagers' extracurricular reading. In 2019, Palm Reading Technology launched Palm Reading Selection, which focuses on selecting high-quality books and providing reading services. In 2021, on the occasion of its 13th anniversary, Palm Reading Technology released Culture 3.0, advocating a consistent behavior of self driven courage, objectivity and honesty, simplicity and efficiency, and pursuit of excellence in Palm Reading, to create an organization that continues to strive and innovate. In 2021, Palm Reading Technology announced the use of a new brand logo (see Table 2).

表2 掌阅科技国内发展历程

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Table 2 Development History of Zhangyue Technology in China

2. Development history abroad

In October 2015, Zhangyue Technology officially launched the international version of the iReader App, which sells globally copyrighted books to overseas users and provides paid online electronic reading, officially beginning the process of "going global".

In 2016, Palm Reading Technology signed a contract with Harper Collins Publishers, the world's second-largest mass book publishing group headquartered in New York, USA, with branches covering 18 countries worldwide. In the same year, Zhangyue Technology participated in the New Delhi International Book Fair (the only digital reading platform enterprise invited by China), the Chicago International Book Fair in the United States, the Seoul International Anime Festival (in cooperation with multiple content providers in South Korea), and the Frankfurt Book Fair in Germany. In November 2016, Zhangyue Technology signed a cooperation agreement with INTIME in South Korea, and obtained digital authorization for more than 4000 Korean language books under INTIME, taking an important step towards "going global". This cooperation not only "goes global" but also "brings in", and Zhangyue Technology has also obtained exclusive digital copyrights for multiple Chinese versions of Korean bestsellers, including the famous writer Mr. Nam Hee sung's "Moonlight Sculptor". As of December 2016, after more than a year of international layout, the iReader App of Zhangyue International Edition has been able to provide 300000 Chinese books, 50000 English books, and tens of thousands of Korean and Russian books to overseas users, ranking first on the sales charts of reading apps in more than 60 countries or regions and becoming the most influential Chinese reading platform in the world.

In 2018, Palm Reading Technology was the first to release the English and French versions of General Secretary Xi Jinping's "Poverty Alleviation", dedicated to promoting Chinese culture in the process of "going global".

At present, the number of users of Handreading International Edition has reached 35 million, covering more than 150 countries and regions around the world, and more than 40 countries co constructing the "the Belt and Road" initiative. It supports Chinese (simplified and traditional), English, Spanish, Thai, Korean and other languages. In 2020, Palm Reading International also added overseas original business, currently having more than 6000 overseas original works and tens of thousands of overseas original authors, with an average daily reading time of 64 minutes for overseas users. The main destinations for Zhangyue Technology's "going global" are North America (mainly the United States), Europe (mainly the United Kingdom), and Southeast Asia (mainly Thailand and the Philippines). In August 2021, Zhangyue Technology was selected as a "National Cultural Export Key Enterprise" for the years 2021-2022. In June 2023, Palm Reading Technology announced a copyright agreement with the international publishing group Penguin Collection for English original e-books.

In the past two years, Palm Reading Overseas has continued to have a good development momentum, with significant improvements in content ecology construction, platform localization, and other aspects. Palm Reading Overseas has incubated numerous high-quality English works, mainly original works by foreign high-quality authors. Content is an important advantage for the overseas development of Palm Reading Technology, and how to better guide overseas authors for subsequent creation and how to localize translated works is the focus of Palm Reading Technology's future development.

3. Awards of Palm Reading Technology

After nearly 15 years of development, Zhangyue Technology has been nominated multiple times for the "Top 30 National Cultural Enterprises" and has won honors such as "National Intellectual Property Advantage Industry", "China Publishing Government Award", and "National Cultural Export Key Enterprise" (see Table 3). From the process of awards won by Zhangyue Technology, it can be seen that its corporate advantages initially focused on copyright, and its advantages in digitalization and internationalization began to increase after 2015.

表3 掌阅科技获奖情况

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Table 3: Awards of Zhangyue Technology

Analysis of the Motivation for the International Development of Erzhangyue Technology

（1） Accumulate massive overseas content resources through original creation and translation

Zhangyue Technology has accumulated a large number of high-quality book copyrights over the years of development in China, forming a mature creative model, which has accumulated valuable resources for "going global". A good content model has driven Zhangyue Technology to "go global", enabling it to efficiently achieve transformation and improve resource utilization in the process of "going global". For example, the current overseas content of Palm Reading mainly comes from two modes. The first type is the "going global" translation of domestic online literature, which is achieved on the basis of the accumulation of a large number of high-quality book copyright resources in China. Many high-quality literary works in China can be translated and promoted in suitable regions. Therefore, Palm Reading Technology selects excellent domestic literary works, and through translation and localization creation, enables these contents to be disseminated overseas. The second way to source overseas content is through signing contracts with local overseas authors. Zhangyue Technology has replicated the excellent original content production model in China to overseas markets, deeply cultivating overseas creators, and signing contracts with numerous outstanding overseas authors. Over 10000 local overseas authors have signed contracts, which has enabled Zhangyue Technology to obtain many high-quality works overseas.

In addition, Palm Reading Technology has also accumulated mature and excellent teams in the development process in China, including content editing team, business team, and content introduction team. They come from China, have rich experience and professional knowledge, and can be well applied to overseas markets. This provides strong support for Zhangyue Technology to conduct business in overseas markets.

In summary, the domestic market also provides excellent overseas work talents, excellent translated literary works, and excellent content work models, enabling Zhangyue Technology to obtain high-quality content in foreign markets, gain competitive advantages, and achieve efficient conversion and effective utilization of resources. With this model, Palm Reading Technology has acquired over 60000 original works from overseas, over 1000 translated works, and 10000 original authors from overseas.

（2） The overseas online reading market is vast, exploring new markets and seeking growth

Palm Reading Technology entered the domestic digital reading market earlier. As a leading brand in the domestic digital reading market, Palm Reading Technology has achieved great success in the domestic market. However, the growth space in the domestic market is limited, and Palm Reading Technology needs to explore new markets to achieve sustained growth. Compared to this, foreign markets have a vast online reading market, and many local online reading brands in foreign countries face bottlenecks in content acquisition due to lack of experience and models. Moreover, in terms of content creation and accumulation, many local companies in various countries have not yet gained an advantage, which is precisely the strength of Zhangyue Technology. Therefore, it provides an important opportunity for Zhangyue Technology's creation mode and content resources to "go global".

With the goal of occupying the first tier and continuously surpassing in the field of overseas online reading, Palm Reading Technology has embarked on the journey of "going global" with the starting point of exploring markets and seeking new growth. By entering foreign markets, Palm Reading Technology can broaden its user base, expand brand influence, and gain more opportunities and growth space in the fiercely competitive international market.

（3） National policies support and guide the dissemination of Chinese culture

Zhangyue Technology's decision to "go global" is also based on policy advantages. Under the combined effects of foreign policies, support for private enterprise development, and support for digital development, Zhangyue Technology has actively expanded its overseas business. Since 2015, some important policies supporting cultural "going global" in China are shown in Table 4.

表4 我国支持文化“走出去”的部分重要政策

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Table 4: Some Important Policies of Supporting Cultural "Going Global" in China

Under the guidance of these cultural "going to sea" policies and the "the Belt and Road" initiative, Palm Reading Technology not only actively seeks development space from the international market through policy advantages, expands overseas markets, enhances international influence, but also actively promotes Chinese culture, builds cultural confidence, and enhances cultural influence. For example, the iReader App of Zhangyue International Edition will provide book flipping effects with Chinese characteristics in product design, and will also offer some special customs operation activities during traditional Chinese festivals such as the Spring Festival. In addition, Palm Reading Technology will also recommend and display translated content through internal and Facebook advertising platforms, specifically testing and evaluating translated content to support reasonable advertising costs and promote Chinese culture related content. Through these methods, Palm Reading Technology has further cultivated the promotion of translated content overseas, spreading excellent Chinese content to various countries around the world through localization, making Chinese content a high-quality content that is highly talked about by overseas people.

Analysis of Key Factors in the Internationalization of Sanzhangyue Technology

（1） Mature content creation mode, deep accumulation to support the development of "going global"

The excellent content model of Palm Reading Technology in China enables enterprises to still obtain high-quality content in overseas countries, thereby helping Palm Reading's overseas development quickly gain a competitive advantage. By leveraging the accumulated content resources and creative models developed domestically, Zhangyue Technology has rapidly accumulated a large amount of overseas distributable resources through two methods: translating existing domestic book content and replicating domestic creative models overseas. In addition, with mature experience and skills in book typesetting, Palm Reading Technology has successfully carried out excellent content output overseas, promoting excellent and classic literary works to global readers.

On the one hand, Palm Reading Technology translates domestic content to "go global", selects excellent domestic literary works, and through localized creation, enables the content to be disseminated overseas. Currently, Palm Reading Technology has translated over 1000 works. On the other hand, Palm Reading Technology has introduced its mature content creation model into overseas markets, actively exploring and cultivating a group of overseas local authors, and accumulating excellent overseas local content culture. Specifically, Palm Reading Technology has replicated the excellent content production model in China to overseas, continuously cultivating the overseas author community. By signing contracts with local authors overseas, it has obtained many excellent works in the local market and has achieved over 50 new signed authors per month. For new overseas authors, Zhangyue Technology will provide some cultivation mechanisms, including detailed outline customization, copywriting refinement, targeted coaching, traffic support, etc., aiming to provide a standardized and effective support path for overseas authors, and continuously promote the healthy development of overseas author ecology through the platform's own efforts. In contrast, local competitors overseas have bottlenecks in content acquisition due to different models, and have missed the opportunity. It is already too late to enter the market and purchase content later.

Whether it is domestic translated works or book resources obtained from overseas local creation, Palm Reading Technology will go through systematic review and modification, including manual preliminary review, platform testing, editor/author refinement, platform retest, promotion testing and other links. The core idea is to determine the quality level of the content through subjective evaluation by the editorial department and platform big data evaluation, and then through joint refinement by editors and authors, to make up for the shortcomings of the content. Then, through paid promotion testing, the audience area and demographic profile of the content are clarified, and finally enter the formal promotion period of the content. With the help of this mature content creation model that has been successfully tested in China, Palm Reading Technology has quickly launched many high-quality online reading contents overseas.

（2） Conduct market research in advance and develop entry strategies tailored to local conditions

Before entering each overseas market, Zhangyue Technology conducts market research and formulates "going global" development strategies tailored to the characteristics of different countries and regions. In different countries and regions, different strategies are adopted based on local market laws, regulations, customs, and user preferences to provide high-quality content services.

One important issue facing the cultural industry's "going global" is cultural differences. Zhangyue Technology conducts in-depth research and leverages the experience of partner companies to gain a more detailed understanding of the local cultural situation in order to make judgments. For example, in countries such as Spain and Brazil, language localization and product feature localization are necessary. In terms of language, Palm Reading Technology obtains content from overseas local authors and also produces translated content through translation companies and local authors.

In addition to cultural differences, policy restrictions are also one of the main challenges faced by cultural "going global". During its overseas development, Zhangyue Technology has always adhered to strict compliance with local laws and regulations, actively addressed compliance issues in various regions, and actively responded to potential challenges. In addition, differences in different countries and regions can also affect the content selection, functional design, and payment model of online reading products. For example, in Thailand, Palm Reading Technology will adjust its content pricing to better suit the local consumer level. When facing these challenges, Palm Reading Technology will handle them flexibly and develop different strategies for different regions.

In summary, in the process of international development of online reading products, localization of mode and content is very important. Zhangyue Technology has always adhered to the belief of better serving local users, and has made different content processing and mode adjustments according to policy restrictions and cultural differences in different countries and regions. It flexibly handles the actual problems of various countries and regions, not simply copying them comprehensively, but refining operations according to local conditions.

（3） Utilizing digital technology to optimize multiple aspects of 'going global'

In the process of "going global" of Palm Reading Technology, digital technology has played a crucial role. By leveraging its accumulated digital technology advantages, Palm Reading Technology has optimized multiple aspects of its overseas development. For example, it has achieved higher content production efficiency in its overseas business model, and based on data reference, it has judged and delivered more accurate content. Palm Reading Technology has also improved user experience and made reading more convenient.

Specifically, in terms of market research, Palm Reading Technology uses technologies such as big data analysis and artificial intelligence to collect, organize, and analyze relevant data and trends in overseas markets, in order to more accurately understand the characteristics and needs of the target market. By analyzing the reading preferences, purchasing behavior, and user profiles of overseas readers, Palm Reading Technology can accurately select works suitable for "going global" and formulate strategies for entering the market.

In terms of content production, Palm Reading Technology uses big data to evaluate the review, modification, promotion, and other aspects of content. Digital technology also helps Palm Reading determine the quality level of content, guiding editors and authors in the direction of modification, and enabling content creation to rely on data modification to achieve evidence-based results.

In terms of content promotion, Palm Reading Technology will conduct paid promotion tests and use digital technology to clarify the audience area and demographic profile of the content before entering the formal promotion period. At this stage, Palm Reading Technology will use accurate data delivery estimation models to judge the rationality of market promotion and make judgments on different contents. In addition, Palm Reading Technology combines digital media and social media platforms to deliver targeted advertising and promotion strategies through precise positioning and marketing interpretation, attracting more target users and increasing user retention rates. At the same time, Palm Reading Technology also utilizes data analysis to optimize products and services in a timely manner based on user feedback and behavior, improving user satisfaction and stickiness.

In terms of user experience, Zhangyue Technology uses its self-developed e-book format, which makes the reading experience more immersive, the interaction smoother, and the support functions richer, forming a core competitive advantage. At the same time, a major challenge for the development of cultural industries overseas is the unfamiliarity and lack of understanding of overseas cultures. Digital technology can help Palm Reading Technology analyze the data performance of different overseas users in the process of overseas development, judge the reading situation of different regions, populations, countries, systems, etc. in different content, and provide guidance for content selection. The judgment of data is often more standardized and clear, which can help Palm Reading Overseas better judge the test results of different functions and provide more necessary assistance for selecting the final solution. Display and provide user experience based on data judgment results. In addition, Palm Reading Overseas also interacts with users through various instant messaging methods, quickly collects feedback, handles problems, and gives feedback to users, enhancing the online reading experience of overseas users.

A typical example is Jessica Hall'sHis Lost Lycan Lunafrom Australia, which is the best-selling book on the platform in the past six months. The content of the book is a typical Western fantasy theme, and the cumulative payment for a single book as of 2022 is over $100000. The success of the book is not only due to the author's strong writing ability, but also closely related to the overseas copyright editing team of Palm Reading providing directional suggestions based on data and market analysis during the creative process.

Four prospects and suggestions

（1） Strengthen cooperation with overseas enterprises and assist in further deepening overseas cultivation

At present, the development of Zhangyue Technology overseas is still mainly based on independent capital management through "going it alone". At present, Zhangyue Technology does not have any branches overseas. The main cooperation is to sign cooperation contracts. In terms of content copyright, it may cooperate with local copyright companies, and in terms of payment methods, it will cooperate with international payment companies. However, more cooperation still comes from domestic "going global" companies, because domestic companies are better able to understand the needs of domestic cultural enterprises "going global" and provide services more conveniently. But if we want to further cultivate overseas markets, the "going global" model of Zhangyue Technology, which is mainly supported by domestic experience and cooperation, will face more challenges. How to achieve better localization will be the main challenge for Zhangyue Technology's future overseas development. In the current international environment where the trend of anti globalization is becoming increasingly severe, cultural enterprises such as Palm Reading Technology may also face more serious policy restrictions and cultural barriers when going global. In the future, Palm Reading Technology can strengthen its localization by establishing closer cooperative relationships with overseas local enterprises, such as collaborating more with overseas publishing and distribution companies, joint ventures and partnerships with overseas enterprises, and even establishing branch offices overseas to hire local employees. This will help to better understand the user needs, cultural backgrounds, and policy requirements of the overseas local market, provide content and services that are more in line with local user tastes, and ensure compliance and legality, providing more favorable conditions for deepening overseas cultivation.

（2） Enrich and diversify book types, expand target user groups

As an online reading platform, the main user group of Palm Reading Technology overseas is currently overseas women, mainly because its online content on topics such as werewolves and vampires is more suitable and attractive to female users. However, this user group is limited, and in order for Palm Reading Technology to further expand into overseas markets and seek new growth, it needs to attract more users of other reading genres, such as science fiction, history, serious literature, and other types of book content. In the future, Palm Reading Technology can explore more categories of reading resources through domestic content translation, cooperation with overseas publishers, and original works by overseas contracted authors, enriching the platform's book types, expanding more target user groups, attracting more users with different interests and reading preferences, and achieving a new round of market growth overseas.

（3） Using digital technology to select works suitable for "going global" and improve the localization level of translation

Although Zhangyue Technology has utilized digital technology in various aspects to achieve better operations, there are still some problems in the development of its two content creation models, namely, signing contracts with overseas authors to produce original content and translating domestic content to "go global". On the one hand, the overall output rate of high-quality content in the overseas online literature market is relatively low. Compared with China, the overall writing level of overseas authors is still in the early stage, and their literary literacy, writing techniques, market trend analysis and other abilities are generally poor. Ecological development still needs a long time to mature. So, in response to the above situation, it has become necessary to promote the "going global" of domestic online literature. However, in the early days, most of the "going global" of domestic online literature ended in failure, mainly due to the localization of content and translation. Looking at the current content creation agencies of domestic translation agencies, they can only solve the above two core problems very little. Most can only achieve barrier free text reading, but it is difficult to truly express the emotional color behind the text through reasonable translations. Therefore, there are certain challenges in selecting suitable translated works, whether domestic content supply is in line with overseas environments, and localizing translated works.

Therefore, there is still room for improvement in both content production models of Palm Reading Technology overseas, which requires further utilization of digital technology to achieve better improvements. Whether it is discovering and finding more excellent online literature works suitable for overseas users to read, improving the localization level of translation, ensuring that translated works can accurately convey the emotions and cultural connotations of the original work, or the creation, collection, and discovery of original works, or the promotion and user experience in the market, continuous use of digitization is needed to improve. In addition, by utilizing digital technology, Palm Reading Technology can flexibly adjust its investment in relevant regions based on data recovery situations, or further assess its expansion in other countries and regions. In the future, Palm Reading Technology still needs to try to innovate and develop digital technology in various fields to avoid being abandoned in the rapidly developing Internet industry. Only by actively embracing new technologies and fields can it maintain its leading position.

（4） Expand translation into more languages and optimize overseas layout

At present, the overseas development of Palm Reading Technology is mainly focused on developed countries and regions such as the United States, the United Kingdom, Australia, and Canada, with English as the main language. Small language regions such as Thailand, South Korea, and Brazil are currently in the stage of expansion. In the future, with the policy advantages of the "the Belt and Road" co construction area, Zhangyue Technology can increase language translation in more relevant countries, expand more overseas markets and further optimize the overseas layout. In the process of expansion, mature domestic development models can be fully utilized, successful experience in existing overseas markets, and precise judgment of digital technology to achieve efficient and high-quality market expansion.