Col Group Co.,Ltd., recognized as China's first digital publishing listed company, has officially submitted an application to list on the main board of the Hong Kong Stock Exchange, aiming to establish a dual capital platform spanning both A-shares and H-shares. The company is aggressively betting on the overseas expansion of short dramas, with its FlareFlow platform experiencing rapid growth. However, data indicates substantial promotional spending behind this expansion, and its profitability remains unproven.
Col Group Co.,Ltd. was listed on the Shenzhen Stock Exchange's ChiNext board on January 21, 2015, with an initial offering price of 6.81 yuan. Its traditional foundation lies in online literature and related businesses. The company possesses a library of over 5.6 million digital content resources and has contracts with more than 4.5 million authors. It operates original platforms such as 17K小说网 and 四月天小说网. Based on 2024 revenue, the company ranks third among China's online literature copyright-driven content platforms, holding a 1.6% market share. In the first three quarters of 2025, this business segment contributed 480 million yuan in revenue, accounting for 47.5% of total revenue.
At this critical juncture of pursuing a Hong Kong listing, actions by shareholders and senior management to reduce their holdings have drawn significant attention. In November 2025, major shareholders—Shenzhen Litong, affiliated with Tencent, and Shanghai Yuewen, under阅文集团, acting as concerted parties—collectively sold approximately 14.5 million shares, realizing about 400 million yuan. This reduced their combined stake from 8.98% to 6.991%. Subsequently, on February 3, 2026, shortly before the Hong Kong application, four directors and senior executives jointly announced pre-disclosed plans to sell up to 25% of their respective shareholdings.
According to the prospectus, the funds raised from the Hong Kong IPO will be primarily allocated to five areas: developing and enhancing AI technology, building an overseas short drama ecosystem, strengthening the content ecosystem, repaying a portion of borrowings, and supplementing working capital. Analysts suggest that successful fundraising would provide the company with additional capital to expand in international markets while boosting its global brand recognition.
Currently, Col Group's business structure shows a "dual-core" pattern, with short dramas and IP derivative businesses becoming a major growth driver. As one of the earliest domestic entrants into short dramas, the company has accelerated its overseas布局 since 2022. In the first three quarters of 2025, revenue from this segment surged 62.9% year-on-year to 474 million yuan, representing 46.9% of total revenue—nearly matching the contribution from its online literature business. This growth is primarily driven by the rapid expansion of overseas short dramas, revenue-sharing collaborations with domestic platforms like Red Fruit, and increased income from derivatives of the "罗小黑" IP.
Data shows that Col Group's FlareFlow platform ranked second among overseas short drama platforms based on monthly active users in its first seven months after launch. Concurrently, the proportion of the company's revenue from overseas markets increased sharply from 9% in 2023 to 40% in the first three quarters of 2025. To capture market share, the company has engaged in strategic "burning" of capital. In the first three quarters of 2025, sales and marketing expenses soared to 660 million yuan, a 93.65% increase year-on-year, constituting 65% of total revenue. This led to a net loss of 517 million yuan for the period, with a projected full-year net loss between 580 million and 700 million yuan.
As of the end of September 2025, the company's cash and cash equivalents stood at only 294 million yuan, which is below its short-term debt. Net cash flow from operating activities was negative 173 million yuan, indicating significant financial pressure. Therefore, a successful Hong Kong listing is crucial for the company.
Forecasts from the renowned consulting firm Frost & Sullivan predict the global short drama market will grow from 60.4 billion yuan in 2024 to 271.2 billion yuan by 2029, with the overseas market expected to achieve a compound annual growth rate of 53.9%. Competition is intensifying as more players enter the field. Data shows that by January 2025, 244 short drama apps were actively investing in marketing, with major companies like TikTok and昆仑万维 also joining the competition. Industry observers note that while Col Group was an early mover in exporting the domestic model, its first-mover advantage is being eroded, and its profit margins are declining. Looking ahead, the company's biggest challenge will be converting its traffic advantages into a sustainable and profitable business model amidst increasingly fierce competition.
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