Col Group Co.,Ltd. has officially submitted its listing application to the Hong Kong Stock Exchange, with Citigroup serving as the sole sponsor. Since its initial public offering on the A-share market, the company has repeatedly raised capital through equity financing, accumulating over 3.2 billion yuan. However, its cumulative net losses after deducting non-recurring items have surpassed 3.8 billion yuan, while cash dividends distributed amount to only 34 million yuan. The company has reported significant losses every few years, with its net profit after deducting non-recurring items remaining in negative territory for the past four consecutive years.
Historically, Col Group has been active in mergers and acquisitions, but several major acquisitions have ended poorly. The company suffered substantial investment losses and goodwill impairments, and a counterparty named Zhu Ming has yet to fulfill compensation obligations amounting to hundreds of millions of yuan.
Despite frequent heavy losses following its A-share listing, Col Group has demonstrated adeptness in capital operations and aligning with market trends. Its current core businesses include online literature and related services, as well as short drama and intellectual property derivative operations. Over the years, the company has ventured into various sectors such as anime, gaming, education technology, and the metaverse. In its latest Hong Kong listing prospectus, the term "AI" appears more than 300 times. Whether its promoted narrative of "AI empowerment + short drama expansion overseas" will meet the same fate as previous concepts remains to be seen.
Col Group raised 204 million yuan in its 2015 IPO. Shortly after, in August 2016, it conducted a private placement raising 2 billion yuan. In 2018, it acquired assets through share issuance valued at 1.02 billion yuan. In total, equity financing since its A-share listing has exceeded 3.2 billion yuan. Nevertheless, the company has struggled to achieve profitability, with cumulative losses estimated at over 2.8 billion yuan since going public.
From early ventures into anime with the acquisition of Chenzhike, to the metaverse, education technology, gaming, and now AI large models and short dramas, Col Group has rarely missed a market trend. However, it has failed to build a sustainable profit moat in any of these areas. Instead, high-premium acquisitions leading to goodwill impairments and substantial expenses from new business initiatives have repeatedly plunged the company into losses.
Between 2015 and 2024, Col Group's net profit after deducting non-recurring items fluctuated significantly, recording figures of 17 million yuan, 7 million yuan, 46 million yuan, -1.966 billion yuan, -645 million yuan, -46 million yuan, 23 million yuan, -393 million yuan, -38 million yuan, and -271 million yuan respectively. For 2025, the company anticipates a net loss between 579 million yuan and 699 million yuan. Based on the lower estimate, cumulative losses from 2015 to 2025 would reach 3.845 billion yuan.
Notably, Col Group has reported negative net profit after deducting non-recurring items for four consecutive years, with a severe loss projected for 2025. Given this performance, questions arise regarding the justification for further fundraising.
In terms of shareholder returns, cash dividends for minority investors have been minimal. Over the past decade, total cash dividends distributed amount to only 34 million yuan, a stark contrast to the 3.2 billion yuan raised through equity financing. Meanwhile, major shareholders and executives have capitalized on significant share reductions. In February 2026, the company announced that several key executives, including directors and senior management, planned collective share sales, each reducing their holdings by 25%.
Earlier, in November 2025, Tencent-affiliated entities Shenzhen Litong and Shanghai Yuewen collectively sold shares, cashing out approximately 400 million yuan and reducing their combined stake to 6.991%. While Tencent remains a significant shareholder, its decision to reduce holdings ahead of the company's Hong Kong listing raises questions about its confidence in Col Group's future prospects.
A key factor behind Col Group's repeated heavy losses is questionable high-premium acquisitions resulting in goodwill impairments. In late 2016, the company acquired a 20% stake in Chenzhike for 250 million yuan, implying a valuation of 1.25 billion yuan for the entire company. By March 2018, it purchased the remaining 80% for 1.4726 billion yuan, raising the valuation to 1.86 billion yuan—a premium of 528.61%.
Zhu Ming, the seller, committed to profit guarantees for Chenzhike totaling 634 million yuan from 2017 to 2019. Although Chenzhike narrowly met the 2017 target, its performance deteriorated sharply just three months after the acquisition was completed. In 2018, it reported a net loss of 89.04 million yuan, leading Col Group to fully impair the 1.254 billion yuan goodwill from the acquisition, resulting in a net loss of 1.508 billion yuan for the year.
In July 2020, Col Group sold Chenzhike to Shanghai Shunfei Enterprise Development Co., Ltd. for just 46 million yuan. The transaction turned the initial 1.723 billion yuan investment into a loss exceeding 1.6 billion yuan within three years. Public records show that Shanghai Shunfei, formerly a decoration company, had a registered capital of 28,000 yuan and no employees enrolled in social insurance for a decade, raising suspicions about the legitimacy of the sale.
Moreover, Zhu Ming failed to fulfill his compensation obligations for the missed profit targets. As of March 2022, he had not paid 269.8454 million yuan in performance compensation, leading regulatory sanctions.
Col Group listed on the ChiNext board in January 2015 as a pioneer in digital publishing. Its share price surged from under 7 yuan to a peak of 251 yuan, fueled by market enthusiasm around various concepts. However, aggressive acquisitions in anime and mobile gaming, such as the Chenzhike deal, eventually backfired.
When the metaverse concept emerged in 2021, Chairman Tong Zhilei expressed long-term commitment, and the company filed trademarks related to the metaverse. Its share price nearly doubled that year. Yet, the term "metaverse" is absent from the latest Hong Kong prospectus.
Instead, the document heavily emphasizes AI, referring to Col Group as an "AI-driven leading digital entertainment platform" that has successfully transformed into a content leader in the AI era. The prospectus highlights the company's third-place ranking in China's online literature copyright-driven platform market, though with only a 1.6% share. It also notes its second position in overseas short drama monthly active users but eighth place in revenue as of September 2025.
Investors are skeptical whether the "AI empowerment + short drama expansion overseas" narrative will follow the same path as previous stories centered on anime, pan-entertainment, and the metaverse. Time will tell if this latest strategy leads to sustainable profitability or becomes another short-lived trend.
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