New Stocks Preview | Going to Hong Kong for IPO, how does COL Group Co., Ltd. use AI to tell a new story of cultural expansion overseas?

As the first digital publishing company listed on the A-share Growth Enterprise Market, COL Group Co., Ltd. has experienced the entire process from the early stage of building a digital library to the explosion of online literature, to the current trend of short dramas and the integration of AI large models. On the capital level, the company landed on the Shenzhen Stock Exchange in 2015 and has now knocked on the door of the Hong Kong Stock Exchange. For this listing in Hong Kong, COL Group Co., Ltd. proposes to focus on consolidating content ecology, developing AI technology to empower creation, and building an overseas short drama ecosystem, aiming to create an "AI-driven global leading digital entertainment platform". Against the backdrop of the rapid growth of the global digital entertainment market, the global popularity of the Chinese short drama model, and the efficiency restructuring brought by AIGC technology, can this entertainment veteran, who has been experienced in the A-share market for many years, complete a magnificent transformation into a global AI-driven entertainment giant through this Hong Kong listing? From digital publishing to AI-driven platform: the business transformation logic of COL Group Co., Ltd. It is understood that COL Group Co., Ltd. was established in 2000 and is one of the earliest listed digital publishing companies in China. After more than twenty years of development, the company has gradually transformed from a traditional digital publisher to a digital entertainment platform with content IP as its core. As of now, the company has accumulated over 5.6 million pieces of digital content resources and established an IP development system covering various content forms such as online literature, audiobooks, comics, animations, and short dramas. In terms of business model, COL Group Co., Ltd.'s business is mainly divided into two major sections: online literature and related businesses, and short dramas and IP derivative businesses. Among them, the online literature business is still the company's long-term foundational business, with the company providing reading and audio content to users through its own platform and third-party channels, while monetizing through copyright authorization and data services. As of the nine months ended September 30, 2025, this business generated revenue of approximately 480 million RMB, accounting for 47.5% of the company's total revenue, and remains an important source of revenue for the company. However, from the changes in the business structure disclosed in the prospectus, the company's strategic focus in recent years has gradually shifted towards IP development and short drama content. With the rise of short videos and mobile entertainment consumption, short drama content has gradually become a new traffic entry point. COL Group Co., Ltd. began laying out short drama production as early as 2021, and achieved a milestone in revenue exceeding 1 billion RMB from short drama business in 2022. Subsequently, the company started expanding its short drama business to overseas markets and gradually forming a content development path centered on original IP. This transformation is essentially a change in the business model of the digital content industry. Traditional online literature platforms mainly rely on paid reading or copyright authorization, while short drama and IP derivative businesses can monetize through various means such as advertising, paid unlocking, subscriptions, IP licensing, and related products, significantly increasing the lifecycle value of individual IPs. COL Group Co., Ltd. is attempting to maximize content value through multi-form IP development. From the perspective of industry competition, the online literature field has formed a market structure dominated by large platforms. According to industry reports, based on revenue scale, COL Group Co., Ltd. ranks third in China in copyright-driven content platforms, with a market share of approximately 1.6%. Although its market share is not outstanding, its long-term accumulation of content library and author resources provides an important foundation for subsequent IP development. AI and overseas short dramas: the growth engine and potential challenges of COL Group Co., Ltd. If online literature constitutes the content foundation of COL Group Co., Ltd., then AI technology and overseas short dramas have become the company's new growth engine. It is understood that in recent years, the company has vigorously promoted the application of AI technology in content production and operations, and launched its independently developed content creation platform "Xiao Yao AI". This system can achieve functions such as novel generation, text analysis, script adaptation, and multilingual translation, and has served over 50,000 creators in more than 90 countries and regions globally, assisting in generating over 2 billion words of content. The introduction of AI technology has significantly improved content production efficiency and operational efficiency. For example, the company uses AI systems for ad material generation and optimization, significantly improving efficiency in content promotion and user acquisition. According to data disclosed by the company, the application of AI technology has increased ad delivery efficiency by over 20 times compared to traditional processes, while also improving user reading exposure efficiency. In terms of content forms, AI technology is also used in online literature, audiobooks, AI comics, and animation production, accelerating the IP development cycle. For digital content companies, IP development efficiency often directly determines commercialization ability, so the deep application of AI technology may become an important competitive barrier for the company in the future. In addition to AI technology, the overseas short drama business is the most watched new growth direction for COL Group Co., Ltd. The company launched its flagship short drama application FlareFlow in 2025, targeting overseas users with short drama content and monetizing through paid unlocking, member subscriptions, and advertising. As of now, FlareFlow operates in over 200 countries and regions globally, with over 33 million registered users and supporting 14 languages including English, Spanish, French, and Thai. In the overseas short drama platform, FlareFlow ranks eighth in revenue and fourth in downloads as of September 2025, showing a certain degree of market competitiveness. In terms of market space, the short drama industry is still in a high-speed expansion phase. According to industry forecasts, the global short drama market size is expected to grow from 140 billion RMB in 2024 to 1.208 trillion RMB in 2029, with a compound growth rate exceeding 50%. Against this backdrop of growth, Chinese content companies are accelerating their expansion into overseas markets with mature production systems and business models. COL Group Co., Ltd. is one of the participants in this "overseas short drama" trend. By replicating China's mature "paid unlocking" model in overseas markets and combining localized content production and operation teams, the company is establishing a user base in markets such as North America, Southeast Asia, and Europe. However, from a financial structure perspective, the expansion of the short drama business is also accompanied by high marketing costs. It is understood that in 2023, the company achieved a net profit of 89.98 million RMB, but in 2024, it incurred a net loss of 243 million RMB, and this net loss further expanded to 517 million RMB in the first nine months of 2025. The core reason for the expanding losses is the high sales and marketing expenses incurred by the company in order to rapidly acquire users and expand the FlareFlow business. The prospectus shows that the company's sales and marketing expenses accounted for 34.2%, 40.1%, and 65.3% of revenue in 2023, 2024, and the first nine months of 2025 respectively, indicating that in order to carry out large-scale user acquisition in overseas markets, the company needs to continue investing marketing resources until the short drama business truly enters a profitable stage. Overall, the core strategy of COL Group Co., Ltd. can be summarized as "content IP + AI technology + global distribution". By accumulating IP resources through online literature, improving content production efficiency through AI, and realizing global commercialization through new content forms such as short dramas. If this model can operate smoothly, it is expected to form a complete digital entertainment ecosystem from content creation to global distribution. However, industry competition should not be underestimated. The short drama market is attracting more and more internet platforms and content companies, and the cost of user acquisition is constantly rising. Additionally, the demand for localized content in overseas markets is also more complex, placing higher demands on the company's operational capabilities. From a long-term perspective, COL Group Co., Ltd.'s IPO application is not only a capital operation, but also a case study of how digital content companies seek new growth models in the AI era. In the future, whether the company can truly achieve synergy between IP reserves, AI technology, and global markets will largely determine its position in the digital entertainment industry.