The shift from a minor loss of 5.5 million yuan to a projected loss of up to 55 million yuan in just one year highlights a dramatic decline for Strawbear Entertainment Group (02125.HK). On July 31, 2026, the company issued a profit warning, estimating a net comprehensive loss attributable to shareholders of approximately 50 million to 60 million yuan for the first half of the year.
This represents a tenfold increase from the 5.5 million yuan loss recorded in the same period last year. The adjusted net loss is expected to be between 47.4 million and 57.4 million yuan, compared to a mere 0.4 million yuan in the first half of 2025. The company, which saw a significant revenue boost in 2024 from hit series like "Bleach" and "Going to the Mountains," has now slid from a near-breakeven point into deep losses.
The primary driver for this sharp increase in losses was a reduction in the volume and investment scale of series content broadcast during the first half of the year. According to the company's announcement, broadcast content was largely limited to custom series and micro-dramas, which led to a decrease in both revenue and project gross profit. The custom series model inherently offers limited profit margins, while micro-dramas, despite their smaller scale, have yet to achieve significant profitability. Strawbear's performance decline is closely tied to a broader structural contraction in the series market.
The "First Half of 2026 Series Market Observation" report from Beacon Professional Edition shows a market-wide decline in both supply and demand, with total viewership falling 21% year-on-year to 43.9 billion plays. Data from Cloud Huitong also reveals a 20% drop in the number of new domestic series and an 8% decline in effective viewership rates compared to the same period last year. Changes in the industry's overall scheduling and the adjustment of online video platforms' release calendars are the key external factors behind the reduced number and investment in broadcast series for the company in the first half. Adjustments in content procurement and release strategies by platforms directly impact the revenue recognition schedule for upstream production companies like Strawbear, which relies on a core revenue model of licensing broadcast rights for series content on a per-episode basis. When platforms slow their release pace, revenue recognition is also delayed.
Strawbear Entertainment operates on a platform-based business model, using a "centralized hub" management system to aggregate high-quality industry resources. As of the end of 2025, the company had only 80 employees. This asset-light model allowed it to rapidly scale up revenue during the industry's upswing—as evidenced by a 33.8% revenue increase in 2024. However, in a downturn, the lack of self-owned production capacity and a content inventory buffer means the revenue contraction is equally severe. By the end of 2025, the company's inventory, representing projects already invested in but not yet recognized as revenue, had reached 1.081 billion yuan, exceeding the year's total revenue. This high level of inventory ties up capital in the production process. The company's operating cash flow showed no significant improvement in 2025, and the efficiency of inventory turnover directly impacts its cash flow health. The combination of high inventory and declining revenue places Strawbear under greater liquidity pressure during the industry's adjustment period.
As of August 7, 2026, shares of STRAWBEAR ENT (02125.HK) traded at HK$0.295, giving the company a total market capitalization of approximately HK$208 million. The stock's 52-week high was HK$0.750, with a low of HK$0.260. The price-to-sales ratio is a mere 0.17 times. Following the profit warning, the stock has been trading in a narrow range between HK$0.29 and HK$0.30, suggesting the market has largely priced in the negative news, though there is little positive momentum to drive a rebound. The company's performance could see a staged recovery if its upcoming series scheduled for the second half of this year and next are released and revenue is recognized as planned. Conversely, if platforms continue to slow their release schedules or if the market performance of the company's flagship series falls short of expectations, the full-year loss for 2026 could widen further.
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