Soaped up by its U.S. success, COL Group sets sail for Hong Kong

The company says it plans to list in Hong Kong, basking in the limelight of strong demand from American viewers for its over-the-top Chinese-style soap operas

Key Takeaways:

• COL Group, a Shenzhen-listed producer of online literature and dramas, is preparing to apply for a second listing in Hong Kong
• The company’s short dramas, following a formula from popular Chinese online literature, briefly lifted its affiliated ReelShort video platform to fame in the U.S.

By Lee Shih Ta

Tired of the “Mary Sue” in your favorite online soap? Then just swap her out for the latest popular new character. It may sound hokey, but such whimsy takes place regularly in popular Chinese online literature, whose video equivalents became a recent sensation in the U.S. on the ReelShort short video platform.

Now, the Chinese source behind that cultural phenomenon, COL Group Co. Ltd. (300364.SZ), is preparing to take its own show to global investors as it prepares to list in Hong Kong. The company detailed the plan in a filing this month to the Shenzhen Stock Exchange, where its shares are already traded. COL’s move follows a recent trend by companies listed on China’s domestic A-share markets to make second listings on the more globally focused Hong Kong Stock Exchange to boost their international profiles.

Founded in 2000 as a university-industry collaboration originating in the prestigious Tsinghua University, China’s equivalent of MIT, the company stands out as one of China’s earliest online literature and digital publishing enterprises. Its current operations cover short dramas, online literature and intellectual property (IP) licensing.

Pre-packaged cinematic fare

The core appeal of Chinese short dramas lies in their ability to deliver intense emotional experiences in extremely brief segments lasting just 30 to 90 seconds. They do that by employing highly recognizable melodramatic themes such as “marriage before love” and “class reversal” to create highly addictive viewing. Such content is becoming increasingly popular among female viewers in North America. A case in point is ReelShort’s hit short drama “The Double Life of My Billionaire Husband” which surpassed 470 million cumulative views and has even been compared to Netflix’s popular “Squid Game” series.

The operator of ReelShort is U.S.-based Crazy Maple Studio, a venture that COL Group has meticulously cultivated in overseas markets over an extended period, and in which it still holds a large, though minority, stake.

Crazy Maple founder Jia Yi previously spearheaded overseas operations within COL. Taking advantage of interactive fiction platforms like Chapters and Kiss, he utilized data to repeatedly validate plot structures and emotional cadences, progressively developing expertise in content targeting female audiences in Europe and America. Crazy Maple eventually emerged as an independent operator built upon this capability, evolving from interactive fiction to short dramas and ultimately shaping the current iteration of ReelShort.

ReelShort employs a “pay-to-unlock” business model. The initial episodes of most short dramas are free. But once the narrative reaches a core conflict or pivotal plot twist, users encounter an “unlock threshold.” At this point, they can choose to watch an advertisement first, or pay directly to unlock later episodes. For users wishing to view an entire series, the cumulative expenditure typically ranges between $15 and $25, higher than the monthly subscription fee for Netflix.

According to media reports, ReelShort generated in-app purchase revenue of $130 million in the first quarter of 2025, capturing 24% of the short-drama market. Data from NetMarvel indicates that in May this year, the ReelShort app achieved 14.49 million monthly downloads, surpassing traditional streaming giants like Netflix and HBO for two consecutive months.

As a result of such rapid growth, Crazy Maple’s scale has significantly overtaken COL Group’s. In the first half of 2024, Crazy Maple reported revenue of about 1.09 billion yuan ($154 million), more than double COL Group’s 460 million yuan over the same period. Crazy Maple’s revenue surged 150% year-on-year to 2.76 billion yuan in the first half of this year, while COL Group’s grew by a more modest 20% to 556 million yuan.

Crazy Maple has been less reliable on the bottom line, shifting from a profit of 22.93 million yuan last year to a loss of 46.51 million yuan in the first half of this year, primarily due to increased marketing costs and intensifying competition. That loss, combined with a decline in investment income, resulted in a 50.8% year-on-year widening of COL Group’s own loss to 226 million yuan during the same period.

U.S. entity status

It’s noteworthy that COL Group ceased consolidating Crazy Maple’s financials into its own statements starting in May 2023. COL maintains a 49% stake in the company, while its voting rights have dropped from 50.9% to 47.81%. That led COL to reclassify its Crazy Maple stake as a simple equity investment, giving Crazy Maple de facto operational independence.

The company said the move aims to encourage Crazy Maple’s independent development and facilitate the company’s own market-driven financing. In practice, the structure also mitigates the types of geopolitical and content censorship risks that became problematic for ByteDance with its TikTok ownership. ReelShort’s status as a U.S. entity also enhances its ability to expand within the American app store ecosystem, payment systems, and local production networks.

Beyond the nominally independent ReelShort, COL also operates another short-drama platform, FlareFlow, which has achieved rapid user growth since its launch in April. As of October, FlareFlow had accumulated over 19 million downloads and hosted more than 3,000 titles. FlareFlow is also deeply integrated with COL’s proprietary “XiaoYao” large AI model, leveraging AI-generated content to enhance efficiency and create a synergistic effect encompassing “AI content generation – short-drama adaptation – IP derivation.”

The rapid growth of ReelShort and FlareFlow in the U.S. has bolstered COL Group’s optimism on its overseas expansion prospects and further validated its decision to pursue a Hong Kong listing. For the company, listing in Hong Kong could help to redefine its strategic positioning, transitioning from a traditional online literature and copyright entity into a global digital content platform. This shift positions FlareFlow, its AI content ecosystem and international IP incubation capabilities as the core pillars of its valuation thesis.

COL’s shares haven’t moved too much this year, down about 3.9% since January, significantly underperforming the broader market. That may owe to the company’s yet unproven profitability, with its overseas operations still in a high-investment phase leading to widening losses, prompting investor caution. While Chinese short dramas are experiencing explosive popularity, associated production costs are substantial, and skepticism persists regarding whether rapidly produced, formulaic narratives can evolve into valuable long-term IP.

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