Short drama exports see a significant increase; Chinese online platform files for listing in Hong Kong

China Securities Journal China Securities Network News (Wang Jiafei, Xiong Yonghong) On February 27, China Online formally submitted its listing application to the Hong Kong Stock Exchange. Founded in 2000 and listed on the Shenzhen Stock Exchange’s ChiNext Board in 2015, this leading digital entertainment company aims to advance its core development strategy of “solidifying content, winning IP, prioritizing international markets, and AI empowerment.” The company plans to accelerate building an AI-driven next-generation digital content ecosystem across the industry, enhance its international brand recognition, and deepen its global capital and business deployment.

Online literature and related businesses are China Online’s traditional foundation. The prospectus shows that the company owns over 5.6 million digital content resources, with more than 4 million registered authors, covering diverse fields such as original literature, classical literature, education, performing arts, and management. Based on 2024 revenue, the company ranks third in China’s online literature copyright-driven content platforms. In the first three quarters of 2025, this business contributed 480 million yuan in revenue, accounting for 47.5% of total revenue.

Notably, there has been significant growth in short dramas and IP derivative products. According to the prospectus, in the first three quarters of 2025, revenue from short dramas and IP derivative products reached 470 million yuan, a year-on-year increase of 62.9%, accounting for 46.9% of total revenue. Among overseas short drama platforms, the company ranks second based on monthly active users during the first seven months after launch. The company states that the growth momentum mainly comes from three sources: rapid expansion of overseas short drama business, increased revenue sharing from high-end short dramas in cooperation with Hongguo, and increased income from “Luo Xiaohei” related IP derivative products.

From a market perspective, both of the company’s core business lines have broad market potential. The global online literature market is expected to grow from 19.7 billion yuan in 2020 to 79.8 billion yuan in 2029. The global short drama market size is projected to expand from 60.4 billion yuan in 2024 to 271.2 billion yuan in 2029.

The highlight of China Online’s IPO is its deep application of AI technology and self-developed capabilities. The company explicitly lists “AI empowerment” as one of its core strategies and has established a comprehensive AI tool matrix covering content production, operation, and distribution.

The “Xiaoyao” AI platform is the company’s core engine for content creation. Launched in Chinese in October 2023 and in English in June 2025, it features multi-language creative generation, translation, and in-depth analysis capabilities. To date, “Xiaoyao” AI has served over 90 countries and regions worldwide, supporting 50,000 content creators and helping produce over 2 billion words of content. Additionally, the company has used AI technology to create over 50,000 literary works, more than 250 AI animation dramas, and over 200,000 hours of audio content.

In the increasingly competitive domestic short drama market, China Online regards internationalization as a key growth driver and has pioneered a unique “model going overseas” approach. The company combines its mature domestic paid short drama model with overseas consumer habits, launching platforms such as Sereal+ and FlareFlow, and implementing localized operations.

China Online’s overseas layout has formed a complete ecosystem. In terms of content reserves, the company relies on its extensive original digital content library accumulated over more than 25 years, rich in cross-cultural adaptation materials. In terms of technological capabilities, AI-driven translation and localization capabilities continue to improve, enabling rapid cross-language content transformation. In terms of operational capacity, the company has established a full capability circle covering content creation, platform operation, and global distribution. In the first three quarters of 2025, overseas revenue increased by 92.8%, becoming a key engine of revenue growth.