Chinese Online Hong Kong Stock IPO: New Business Expansion Period Pressures Performance, Several Executives Plan to Reduce Holdings

Can AI · The surge in overseas short drama revenue reverse the losses of Chinese Online?

Recently, Chinese Online Group Co., Ltd. (hereinafter referred to as “Chinese Online”) submitted a prospectus, planning to list on the main board of Hong Kong Stock Exchange, with Citigroup serving as its sole sponsor.

Chinese Online is the first digital publishing company listed on the A-share market. Its businesses include online literature and related services, short dramas, and IPO derivative products. According to the latest earnings forecast, the company expects a net profit attributable to shareholders of the listed company between -580 million and -700 million yuan in 2025, representing an increase in losses compared to the same period last year.

For this Hong Kong IPO, Chinese Online plans to raise funds to develop and improve AI technology, repay some bank and other loans, among other uses.

Performance Pressure During New Business Expansion

Founded in 2000, Chinese Online was listed on the Growth Enterprise Market of the Shenzhen Stock Exchange in January 2015, becoming the first digital publishing company listed on the A-share market. The company is a leading AI-driven digital entertainment platform, mainly providing online literature content domestically and short dramas overseas.

According to Frost & Sullivan data, based on 2024 revenue, Chinese Online ranks third in China’s online literature copyright-driven content platform market with a market share of 1.6%. In overseas short drama platforms, the company ranked eighth based on September 2025 revenue, and second based on monthly active users during the first seven months after launch.

Figure 1: Chinese Online Financial Data

According to the prospectus, the company’s performance has been under pressure in recent years. In 2023, 2024, and the first nine months of 2025, Chinese Online’s revenue was approximately 1.409 billion yuan, 1.159 billion yuan, and 1.011 billion yuan, respectively. During the same period, net profit attributable to equity shareholders was 89.44 million yuan, -243 million yuan, and -520 million yuan.

Based on the 2025 earnings forecast, Chinese Online expects a net loss attributable to shareholders of 580 million to 700 million yuan, a decrease of 139% to 188% from the previous year. The company states that it is in a critical stage of expanding overseas business scale. To maintain competitive advantage, it has significantly increased promotional investments. Since these businesses are still in the investment phase, costs cannot be fully offset by income in the short term, resulting in substantial losses in 2025.

Over 60% Year-over-Year Growth in Short Drama and IP Derivative Revenue

Chinese Online’s core businesses include online literature and related services, short dramas, and IP derivative products.

According to the prospectus, in the first three quarters of 2025, revenue from online literature and related services was about 480 million yuan, slightly down year-over-year, accounting for approximately 47.5% of total revenue.

Figure 2: Chinese Online Revenue Structure

Due to fierce domestic market competition and a strategic shift toward high-end domestic short dramas, revenue from short dramas and IP derivative businesses declined from 2023 to 2024. Benefiting from growth in overseas short drama business, higher revenue sharing from high-end short dramas in cooperation with Hongguo, and increased income from “Luo Xiaohei” related IP derivatives, the revenue from this segment reached 474 million yuan in the first three quarters of 2025, a year-over-year increase of 62.9%, accounting for 46.9% of total revenue.

As of September 30, 2025, Chinese Online’s digital content reached users in over 177 countries and regions worldwide. In 2023, 2024, and the first nine months ending September 2024 and 2025, overseas market revenue accounted for 9%, 25.9%, 25.9%, and 40% of total revenue, respectively.

Several Executives Plan to Reduce Holdings

The largest shareholder group of Chinese Online includes founder Tong Zhilei and Xuan Yuan Yuan Ding 6th Fund. As of the last practicable date, this group holds approximately 13.69% of the company’s voting rights.

Figure 3: Chinese Online Ownership Structure

Ahead of the IPO, several senior executives announced plans to reduce holdings. On February 3, Chinese Online issued a “Pre-disclosure Announcement of Share Reduction by Directors and Senior Management.” According to the announcement, Director Zhang Fan, Executive Vice President Xie Guangcai, COO Yang Ruizhi, Vice President, Board Secretary, and CFO Wang Jingjing plan to reduce their shares through centralized bidding or block trades due to personal funding needs, each intending to reduce their holdings by 25% of their total shares.

Previously, in November 2025, Chinese Online announced that the combined shareholding of major shareholders Shenzhen Litong and Shanghai Yuewen decreased from 8.98% to 6.991%, completing the reduction plan.

For this Hong Kong IPO, Chinese Online aims to raise funds to develop and improve AI technology to enhance content creation and distribution, build an overseas short drama ecosystem, strengthen the content ecosystem, repay some bank and other loans over the next year, and support operating capital and general corporate purposes.

【New Stock Watch】is a column jointly produced by Xinhua Finance and Bread Finance, mainly interpreting new and recent IPOs. Xinhua Finance is a national financial information platform built by Xinhua News Agency, covering global stock markets, forex markets, bond markets, and providing authoritative, professional, and comprehensive financial information services.

(Article serial number: 2030926985907277824/GJ)

Disclaimer: This article does not constitute any investment advice.
Intellectual Property Statement: The intellectual property rights of Bread Finance works belong to Shanghai Miaotan Network Technology Co., Ltd.