New Stock News | COL Group Co., Ltd. (300364.SZ) submits application to Hong Kong Stock Exchange, ranking third in China's copyright-driven content platform for online literature market.

According to the information disclosed by the Hong Kong Stock Exchange on February 27, COL Group Co., Ltd. (referred to as "COL Group Co., Ltd.", 300364.SZ) submitted an application for listing on the main board of the Hong Kong Stock Exchange, with Citigroup acting as its joint sponsor. Company Overview According to the prospectus, the company is a leading AI-driven digital entertainment platform that primarily (i) provides online literature content domestically and (ii) offers short dramas overseas, dedicated to building the next-generation full-industry chain digital content ecosystem. According to Frost & Sullivan data, based on revenue projections for 2024, the company ranks third among copyright-driven content platforms in the Chinese online literature market, with a market share of 1.6%; in the overseas short drama platform, the company ranks eighth based on revenue projections for September 2025 and second based on monthly active users within the first seven months after going online. The company was founded in 2000 and listed on the Growth Enterprise Market of the Shenzhen Stock Exchange in January 2015, becoming the first digital publishing company to be listed on the A-share market. Over the past 25 years, the company has built a vast library of original digital content and a rich network of creators, forming a strong competitive moat. With continuously improving technological innovation capabilities, especially the application of AI technology, the company has successfully transformed from a digital publishing company to a leader in content in the AI era. By leveraging AI technology to empower various forms of content such as online literature, audiobooks, comics, AI dramas, animations, and short dramas, the company has expanded its business from China to the global market. By connecting renowned creators, publishers, distribution channels, and global users, the company has built an AI-driven business covering content creation, IP incubation, various forms of IP development and operation, and global distribution. This enables the company to continuously deliver high-quality digital content to global users. According to the Frost & Sullivan report, the company is one of the pioneers in developing and applying AI technology in the digital entertainment industry. With years of technical accumulation and rich digital content resources, the company launched the Chinese version of Xiaoyao AI in October 2023 and the English version in June 2025. Xiaoyao AI is a content production platform with creative generation, translation, and in-depth analysis capabilities in a multilingual environment. As of the last feasible date (February 18, 2026), the company's Xiaoyao AI has served over 50,000 content creators from more than 90 countries and regions globally, assisting them in producing over 2 billion words of content. The company has deeply integrated Xiaoyao AI and other AI technologies into several key processes from production to monetization. As of the last feasible date, the company has used AI technology to create over 50,000 literary works, more than 250 AI dramas, and over 200,000 hours of audio content. In addition, with its independently developed AI agent - including Xiaoyao AI and AIGC toolset - the company has achieved automatic generation of content promotion materials and advertising deployment strategies. Meanwhile, the company's AI agent has promoted over 27,000 literary works, increasing the daily average readership of high-quality literary content over 48 times, enhancing the daily average reading time of the company's paid readers by more than 20%, and improving the efficiency of ad placement by over 20 times compared to traditional non-AI processes. The company's content distribution channels mainly include online reading platforms, audio platforms, short drama platforms, and other video platforms. To distribute high-quality content, the company has partnered with leading online reading platforms (such as Xihongshi, Qimao, Qidian, QQ Reading, Weixin Reading, and Woyue Reading), well-known audio platforms (such as Himalaya), QQ Music, Kuwo Music, and Kugou Music), top short drama platforms (such as Hongguo), and major video platforms (such as iQiyi). Financial Information Revenue For the nine months ending on September 30 of 2023, 2024, and 2025, the company's revenue was approximately RMB 1.409 billion, RMB 1.159 billion, and RMB 1.011 billion, respectively. Profit For the nine months ending on September 30 of 2023, 2024, and 2025, the company's annual/profit for period was approximately RMB 89.982 million, -RMB 243 million, and -RMB 517 million, respectively. Gross Margin For the nine months ending on September 30 of 2023, 2024, and 2025, the company's gross margin was 44.7%, 32.9%, and 34.4%, respectively. Industry Overview Driven by the evolution of digital entertainment consumer behavior and the continuous enrichment of digital content formats and distribution channels, the global digital entertainment market saw its size grow from RMB 1.785 trillion in 2020 to RMB 2.5117 trillion in 2024, with a compound annual growth rate of 9.0%. With content creators increasingly utilizing interactive entertainment, subscription-based services, and advertising monetization models, it is projected that by 2029, the global digital entertainment market's size will reach RMB 4.3925 trillion, with a compound annual growth rate of 11.8% from 2024 to 2029. Driven by the rapid popularity of short videos and the improvement of AI technology in content production and distribution efficiency, China's share of the global digital entertainment market continues to expand. The size of the Chinese digital entertainment market grew from RMB 422.1 billion in 2020 to RMB 609.6 billion in 2024, with a compound annual growth rate of 9.6%. With closer industrial cooperation, the maturation of the content production ecosystem, and the efficiency improvement driven by AI, the market is expected to maintain stable growth. By 2029, the market size is projected to reach RMB 1.0832 trillion, with a compound annual growth rate of 12.2% from 2024 to 2029. The global online literature market maintains growth momentum, projected to grow from RMB 19.7 billion in 2020 to RMB 79.8 billion in 2029, with a high compound annual growth rate of 26.3% from 2020 to 2024, and 9.8% from 2024 to 2029. At the same time, the Chinese online literature market is expected to grow from RMB 18.3 billion in 2020 to an estimated RMB 61.9 billion in 2029, indicating maturity in the domestic market. Despite the relative maturity of the Chinese online literature market, markets outside of China are still in the early stages of development, with significant growth potential attributed to rapidly increasing user penetration rates, diversified content types, and improving AI-driven translation and localization capabilities. The global short drama market grew from RMB 1 billion in 2020 to RMB 60.4 billion in 2024, with a compound annual growth rate of 181.4%. With the continuous improvement of subscription models, advertising monetization, IP extension, and overseas distribution capabilities, the market size is expected to reach RMB 271.2 billion by 2029, with a compound annual growth rate of 35.0% from 2024 to 2029. Driven by factors such as the continuous upgrade of mobile Internet content consumption, the rise in fragmented entertainment demands, and accelerated platform investments, China's short drama market grew from RMB 1 billion in 2020 to RMB 46.4 billion in 2024, with a compound annual growth rate of 163.5%. The market size is projected to reach RMB 150.4 billion in 2029, with a compound annual growth rate of 26.5% from 2024 to 2029. The overseas short drama market is still in its early stages of development, expected to grow from RMB 14 billion in 2024 to RMB 120.8 billion in 2029, with a compound annual growth rate of 53.9%. In the overseas market, the North American market accounted for the largest share in 2024, representing 51.2% of the total overseas short drama market, expected to grow from RMB 7.2 billion in 2024 to RMB 55.6 billion in 2029. Meanwhile, the Southeast Asian short drama market is projected to grow from RMB 1.4 billion in 2024 to RMB 16.5 billion in 2029, with a compound annual growth rate of 64.0%, becoming the fastest-growing regional market. Board of Directors Information Following compilation, the company's board of directors consists of eight members, including two executive directors, two non-executive directors, and four independent non-executive directors. Directors serve a term of three years and may be re-elected consecutively. Under relevant Chinese laws and regulations, independent non-executive directors may serve a maximum of six consecutive years. Equity Structure The company's single largest shareholder group includes Mr. Tong and XY Fund 6. According to a joint action agreement they entered into, XY Fund 6 agrees to follow Mr. Tong's voting decisions when exercising its voting rights. As such, Mr. Tong and XY Fund 6 constitute the company's single largest shareholder group. As of the last feasible date, the company's single largest shareholder group could exercise approximately 13.69% of the company's voting rights, including: (i) 87,201,416 shares held directly by Mr. Tong, accounting for approximately 11.97% of the company's issued shares; and (ii) 12,511,000 shares held by XY Investment Management, a private equity fund whose sole beneficial owner is XY Fund 6 held approximately 1.72% of the company's issued shares. Intermediary Team Sole Sponsor: Citigroup Global Markets Asia Limited; Legal Advisors: Zhong Lun Law Firm, Zhong Lun Law Firm, and Loeb & Loeb LLP; Sole Sponsor and Legal Compiler: RSA International Law Firm, Jingtian & Gongcheng Law Firm; Reporting Accountant and Auditor: KPMG Certified Public Accountants; Industry Consultant: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai branch; Independent Property Valuer: RuiLi Assessment Consulting Co., Ltd.