From the "Clearance Sale" in the ACG world to "Betting" in short dramas: Chinese Online makes another push for a Hong Kong IPO

Ask AI · Why has Chinese Online’s China-to-overseas strategy shifted from 2D anime to short-drama export?

Recently, media reports disclosed that the listed company Guolv United, in its 2025 annual financial report disclosure, has made bad-debt provision for 10 game companies due to unpaid amounts, including Shanghai Chenzhike and Beijing Qinglongtu, among others, drawing attention from the industry.

Among them, Shanghai Chenzhike, which has focused on the 2D anime sector, has had a relatively deep capital relationship with Chinese Online, which is currently pushing to secure an “A+H” listing.

Chenzhike was once “offloaded” by Chinese Online

Chinese Online is one of the first companies in China involved in digital publishing. In its early stages, it developed rapidly by relying on the internet and digital books, and in 2015 it successfully listed on the ChiNext board. After listing, the company leveraged the capital markets to actively pursue emerging opportunities.

In November 2016, Chinese Online first obtained 20% equity in Chenzhike for 250 million yuan (including 120 million yuan for a capital increase subscription of 9.6% and 130 million yuan to acquire 10.4% from the original shareholders). In August 2017, it then acquired the remaining 80% equity for about 1.47 billion yuan, achieving 100% control. The two deals together cost about 1.723 billion yuan. At the time, Chinese Online viewed the acquisition as an important layout in the 2D anime cultural field, intending to connect the entire industrial chain and build a cultural ecosystem by tapping into the development dividends of the 2D anime industry, to upgrade the pan-entertainment ecosystem, and to make Chinese Online a leading A-share company in the 2D anime cultural sector.

According to reports at the time, Chenzhike was an emerging technology company focusing on mobile entertainment and the 2D anime industry chain, with businesses including the 2D anime player community G Station (Gulugulu), games, live streaming, and more. At the time of the acquisition, Chenzhike also committed that its performance in 2017–2019 would be no less than 150 million yuan, 220 million yuan, and 264 million yuan, respectively.

However, in 2018, due to the suspension of game license issuance, new games could not be launched, and older games entered the end stage of their lifecycle. Chenzhike recorded a loss of 82.632 million yuan and failed to complete the performance commitment. In December 2019, Chinese Online sold 100% of Chenzhike’s equity to Ganggangwang E-commerce (Shanghai) Co., Ltd. for 324 million yuan, and was forced to recognize a large amount of goodwill impairment, which directly resulted in a net loss after non-recurring items of 1.966 billion yuan in 2018.

According to publicly available information, in 2020, Chenzhike’s founder Zhu Ming received a warning letter from the Beijing Securities Regulatory Bureau for failing to fulfill the performance compensation commitment. In 2022, the Beijing Second Intermediate People’s Court, in its first-instance judgment, ruled that Zhu Ming needed to pay Chinese Online approximately 177 million yuan in performance compensation and late fees.

As of now, the 130,000 yuan in arrears disclosed by Guolv United in its 2025 disclosures regarding Chenzhike still has unclear specific causes.

Betting on short-drama export, planning to push for an “A+H**” listing**

A complex capital relationship once again brought Chinese Online—an enterprise that has always chased market trends—back under the spotlight. Recently, Chinese Online has officially submitted a listing application to the Hong Kong Stock Exchange’s Main Board, aiming for an “A+H” listing structure.

Chinese Online was founded in 2000. In January 2015, it listed on the ChiNext board of the Shenzhen Stock Exchange, becoming the first digital publishing enterprise listed on the A-share market in China. According to the prospectus, the company’s performance has faced pressure in recent years.

In 2023, 2024, and the first nine months of 2025, Chinese Online’s revenue was 1.409 billion yuan, 1.159 billion yuan, and 1.011 billion yuan, respectively; during the same period, profit attributable to equity holders was 89.437 million yuan, -243 million yuan, and -520 million yuan, respectively. According to the company’s 2025 performance forecast, the net profit attributable to shareholders of the listed company in 2025 is expected to be a loss of between 580 million yuan and 700 million yuan, representing a year-on-year decrease of 139% to 188%.

Judging from its revenue structure, the company’s business is mainly divided into two segments: online literature and related businesses, and short dramas and IP derivative products. From 2023 to 2024 and the first nine months of 2025, the revenue from online literature and related businesses was approximately 670 million yuan, 686 million yuan, and 480 million yuan, accounting for 47.5%, 59.2%, and 47.5% of the company’s total revenue, respectively. In the same period, the revenue from short dramas and IP derivative products was approximately 622 million yuan, 398 million yuan, and 474 million yuan, accounting for 44.2%, 34.4%, and 46.9%, respectively. Growth in the new businesses has been strong.

Facing a loss situation, after the short-drama market rapidly heated up, Chinese Online pinned its hopes on “short-drama export.” In 2023, it launched the Sereal platform to trial the overseas short-drama market, but due to a mismatch between the platform’s positioning and content and overseas users’ needs, its operations failed to meet expectations. In 2025, the company launched a new platform, FlareFlow, replacing Sereal. As of the last practical feasible date, FlareFlow had ranked first on the U.S. free entertainment app charts in major mobile app stores; at present, registered users exceed 33 million, and it provides about 5,200 short-drama episodes.

In its risk disclosure, Chinese Online stated plainly that the core of competition in short dramas and IP derivative products lies in high-quality content, as well as the ability to acquire and retain users. Some competitors in this market may have higher brand awareness, stronger financial strength, more advanced technical capabilities, or larger marketing budgets, giving them advantages in attracting and retaining users and business partners. In addition, as platforms intend to expand their user base, increase operating scale, and strengthen their ability to support diversified content formats, industry consolidation via mergers and acquisitions may emerge from time to time. If we are unable to compete effectively in a highly competitive market, our business, financial condition, operating performance, and prospects may be materially and adversely affected.

Due to losses caused by “burning cash,” Chinese Online believes the company is in a critical stage of overseas business scale expansion; to maintain its competitive advantage, it has significantly increased promotional spending. Since the relevant businesses are still in the investment stage, the related costs cannot be fully covered by revenue in the short term, resulting in substantial losses in 2025.

Data shows that in the first three quarters of 2025, Chinese Online’s sales and marketing expenses reached 660 million yuan, up 93.65% year over year, accounting for 65% of revenue. As of the end of September 2025, Chinese Online’s cash and cash equivalents were only 294 million yuan, facing significant funding pressure.

As for the planned use of funds for its IPO in Hong Kong, Chinese Online said it plans to use the raised funds to develop and improve AI technologies to strengthen content creation and distribution capabilities, build an overseas short-drama ecosystem, strengthen the content ecosystem, repay part of bank loans and other borrowings over the coming year, provide working capital, and for general corporate purposes.

Worth noting is that at the key moment of pushing for a listing in Hong Kong, in November 2025, the company’s major shareholder—Shenzhen Litong—under Tencent, and Shanghai Yuewen under Yueduwen Group, acted in concert as consistent-action persons, together reducing holdings by about 14.5 million shares, raising about 400 million yuan in cash. On February 3, 2026, shortly before the company submitted its filing to the Hong Kong Stock Exchange, the company’s four directors and executives collectively issued a pre-disclosure announcement of share reductions, planning to reduce their respective holdings by 25%.

Byline: Nandu · Bay Finance and Economics News reporter Wang Yanling