On the morning of October 8, 2026, Col Global Co., Ltd. (300364.SZ) announced that it had convened the 14th meeting of its sixth board of directors on October 7 and approved a resolution to terminate the issuance of H shares and its listing on the Hong Kong Stock Exchange.

The stated reason for the termination was notably restrained and diplomatic: a comprehensive consideration of market conditions and the company's own development plans, guided by the principle of safeguarding shareholder interests and being accountable to shareholders.

However, just eight days earlier, the company had unveiled an A-share private placement plan more than ten times the size of its net assets. The Shenzhen Stock Exchange then issued an inquiry letter during the National Day holiday, with the very first question asking: what is the rationale for pursuing equity financing in both A-share and H-share markets simultaneously?

Against that backdrop, the diplomatic justification now appears somewhat awkward. When trading opened on October 8, Col Global Co., Ltd. shares fell sharply, dropping 12.20% by the time of publication, with market capitalization falling below 15 billion yuan.

So what exactly caused a company with a market value of 15 billion yuan to decisively abandon its H-share IPO plan after a single inquiry letter, even before the deadline to respond had arrived?

The Trigger: A Private Placement Ten Times Net Assets and a Holiday Inquiry Letter

Before explaining this question, we need to first examine the specific sequence of events. Let us turn back the clock half a month. On the evening of September 30, 2026, Col Global Co., Ltd. disclosed its private placement plan: it intended to issue A-shares to no more than 35 specific investors, raising a total of no more than 2.833 billion yuan.

Looking at the allocation plan alone might not seem particularly unusual, but the real problem lies in the denominator. As of the end of June 2026, Col Global Co., Ltd.'s net assets stood at only 263 million yuan, with book cash of 277 million yuan and interest-bearing debt of 428 million yuan. For the period from January to June 2026, net profit before and after deducting non-recurring items was -43 million yuan and -48 million yuan, respectively.

This means that if the financing succeeds, Col Global Co., Ltd. would instantly leverage up to more than ten times its net assets. Clearly, the Shenzhen Stock Exchange was unlikely to let such a thing pass unchecked.

On the evening of October 2, the second day of the National Day holiday, the Shenzhen Stock Exchange worked overtime to issue the "ChiNext Inquiry Letter (2026) No. 117" to Col Global Co., Ltd., explicitly requiring the company to submit explanatory materials to the ChiNext Company Management Department and disclose them publicly before October 8.

The inquiry letter covered five areas. First, the scale of financing: the company was required to justify the 2.833 billion yuan based on its current financial situation, explain how the financing volume matches its existing business, management capabilities, and personnel reserves, and fully disclose the calculation logic behind the fundraising.

Second, the investment projects: regarding the 864 million yuan digital copyright procurement, regulators required disclosure of the types, quantities, unit price ranges, supplier information, and pricing fairness basis for copyright purchases; the necessity of additional procurement given the utilization rate and revenue contribution of the existing copyright library; and specific measures to prevent duplicate procurement and idle copyrights.

Third, profit assumptions: the plan assumed net profit before and after deducting non-recurring items of 10 million yuan for 2026 and between 20 million and 100 million yuan for 2027 when measuring the impact of the issuance on key financial indicators. The inquiry letter noted that the company had negative net profit before and after deducting non-recurring items for both 2024 and 2025. Regulators required the company to trace the causal relationship, explain the derivation process of its profit forecast, and quantitatively analyze the dilution impact of the issuance on immediate returns.

Fourth, previous refinancing: the company had initiated a private placement in 2023 and terminated it in August 2025. The Shenzhen Stock Exchange required an explanation of the specific differences between the current fundraising plan and the previous one.

Fifth, and most critically: Col Global Co., Ltd. had already submitted an H-share listing application to the Hong Kong Stock Exchange on February 27, 2026, with Citigroup as sole sponsor, and that application was still under review. The Shenzhen Stock Exchange required the company to disclose the latest review progress of the Hong Kong IPO, compare the differences in fundraising purposes between the A-share private placement and the Hong Kong IPO, and justify the rationale for simultaneously pursuing equity financing in both A-share and H-share markets.

In fact, all the questions in this inquiry letter were essentially asking the same thing: Is Col Global Co., Ltd.'s financing need a genuine requirement of business development, or is it passive life support under a cycle of "financing, then losses, then refinancing"?

Eleven Years of Hot-Topic Relay Racing With 3.8 Billion Yuan in Losses

It is not surprising that the Shenzhen Stock Exchange raised such questions. Col Global Co., Ltd. was founded in 2000 and listed on the ChiNext board of the Shenzhen Stock Exchange on January 21, 2015, becoming the first digital publishing company to list on the A-share market, once hailed as the "first stock in digital publishing."

In its listing year, the company's issue price was 6.81 yuan, and during its most frenzied phase, the share price once reached 251.6 yuan. But eleven years later, not only has the share price returned to around 20 yuan, but its income statement has left behind a string of figures showing almost no profitability.

From 2016 to 2025, Col Global Co., Ltd.'s cumulative net profit attributable to shareholders after deducting non-recurring items exceeded 3.8 billion yuan in losses. Among these, 2018 and 2019 saw losses of 1.966 billion yuan and 645 million yuan respectively, while 2022 and 2024 saw losses of 393 million yuan and 271 million yuan respectively. The most recent four years, from 2022 to 2025, recorded consecutive losses after deducting non-recurring items.

2023 is a year that is easily misread. That year the company reported operating revenue of 1.409 billion yuan and net profit of 89.43 million yuan, appearing profitable. But this profit relied mainly on approximately 120 million yuan in non-recurring gains and losses. After deducting these, the company actually lost 38.34 million yuan.

Stripping away non-recurring gains and losses, in the eleven years since Col Global Co., Ltd. went public, it achieved genuine profitability after deducting non-recurring items only in 2015, 2016, 2017, and 2021. Even more striking, the company has raised over 3.2 billion yuan in cumulative equity financing since listing, while cumulative cash dividends amounted to only 34.2495 million yuan.

3.2 billion yuan in financing, 34 million yuan in dividends. Put together, these two figures essentially answer the question of whether it has ever actually made money. But that does not mean the problem is solved. On the contrary, the question now is: if the core business cannot generate profit, where does this company's money and its stories come from?

Looking at its track record reveals a fairly regular rhythm: every two to three years, it pivots into a hot new concept. From 2016 to 2017, the spread of smartphones brought a mobile gaming boom. Col Global Co., Ltd. spent over 1.7 billion yuan to acquire all equity in Morning Star, an anime-style mobile game publisher, and invested in AcFun, an anime social platform once as well-known as Bilibili.

Neither investment yielded good results. Morning Star continued to lose money due to underperformance, and the company recorded substantial goodwill impairments, directly causing a non-recurring-adjusted loss of 1.966 billion yuan in 2018. The company was ultimately sold off for 45.67 million yuan, while AcFun became a relic of a bygone era, with its highest weekly video views currently reaching only about 5,000.

In 2021, the metaverse became the hottest concept. The company pivoted again, announcing the metaverse as its direction for the next decade, investing in laboratories and technology research. Subsequently, metaverse enthusiasm faded, related businesses failed to generate stable revenue, and its simultaneous foray into online education also failed to produce good results, ultimately leading to massive losses.

Overall, every pivot for Col Global Co., Ltd. started with a hot concept, and the cost of each pivot was conveniently written into the following year's losses.

Short Dramas: A New Business or a New Story?

Yet Col Global Co., Ltd. has not stopped pursuing new concepts. After 2023, the short drama market exploded, and the company began betting on "short drama going global," establishing overseas subsidiaries, increasing advertising spending to promote its business, and launching the overseas short drama platform FlareFlow.

At this point, the question returns to the most fundamental level: Is Col Global Co., Ltd. a company that does business, or a company that tells stories? The answer may be: both, and that is precisely its problem.

Looking first at the numbers in its financial reports, in the first half of 2026, the company's operations did show some substantive improvement. Operating revenue was 578 million yuan, up 3.85% year-on-year; net profit attributable to shareholders showed a loss of 42.9953 million yuan, a significant reduction of 81.01% year-on-year; overall gross margin rose to 49.58%, up 17.71 percentage points year-on-year; and net cash flow from operating activities turned positive, reaching 127 million yuan.

In terms of business structure, short drama and IP derivative business revenue reached 411 million yuan, up 108.72% year-on-year, accounting for 71.2% of total revenue, surpassing the traditional online literature business to become the largest revenue source. The overseas platform FlareFlow was the biggest variable. In the first half of 2026, FlareFlow generated revenue of 252 million yuan, with cumulative registered users surpassing 52 million, compared to approximately 33 million at the end of 2025 as disclosed in the prospectus.

This is the biggest difference between it and companies that "purely tell concepts": at least in the overseas short drama line, the revenue is real, users are growing, and quarterly profits have indeed turned positive. But the problem is that this profitable financial report still has some hidden parts.

This same company recorded cumulative non-recurring-adjusted losses exceeding 3.8 billion yuan from 2015 to 2025, with a single-year non-recurring-adjusted loss of 637 million yuan in 2025. This same FlareFlow platform had a full-year net loss exceeding 470 million yuan in 2025, going from massive losses to profitability within a single year.

From losing 470 million yuan to earning 152 million yuan within a year, what happened in between? The company has not provided a complete explanation. The most likely answers are two: either efficiency genuinely improved, with AI cost reduction combined with more disciplined spending pushing the overseas business to the break-even line; or the spending rhythm was temporarily misaligned, meaning promotion costs were collected first while revenue was recognized later, ultimately causing profits to be "realized early."

But there is really no need to make a judgment, because for Col Global Co., Ltd. at present, cost is the biggest problem, and whether profits were realized early is not the focus at all. This is because in the short drama going global business, the most expensive part of the cost structure has never been determined by the company.

Industry research has pointed out that AI has reduced short drama production costs but has not increased demand. User attention is limited, and short drama customer acquisition costs remain high. In North America, the per-user acquisition cost is $5.28, and some platforms must reinvest nearly 80% of revenue into traffic acquisition. The industry is thus caught in a cycle: once you stop spending on traffic, you get no new users, but if you keep increasing spending, you have no profit.

Col Global Co., Ltd. can indeed use AI to compress the production cost of a short drama to one-tenth that of a live-action drama, but the $5.28 per-user acquisition cost in North America is a core problem that AI currently cannot solve.

For this reason, it is hard to say whether the A-share private placement will still proceed. Moreover, the more critical question is: if this financing, with a six-month lock-up period and an issue price no lower than 80% of the average price over the 20 trading days preceding the pricing benchmark date, is not stopped but ultimately completed, will this 2.8 billion yuan become fuel for overseas spending, only to become a sickle for harvesting after driving up the share price, ultimately evolving into the classic old story of the past eleven years: "losses, then telling stories to find reasons, then large-scale financing for life support, then continued losses, then refinancing"?

But for investors, the only question truly worth pondering is this: Is a company that has been listed for eleven years, accumulated non-recurring-adjusted losses exceeding 3.8 billion yuan, and paid dividends just over 1%, worth continuing to receive your "life support"?