On October 8th, Chinese Online responded to the company's inquiry letter on the Shenzhen Stock Exchange, stating that based on comprehensive considerations of the market environment and the company's own development plan, after careful discussion and analysis, it has decided to terminate the issuance of H-shares and list them on the Hong Kong Stock Exchange, and simultaneously terminate the issuance of A-shares to specific targets.

Chinese Online also stated in the relevant announcement that the company's production and operation activities are normal at present, and the termination of related capital matters will not have a significant adverse impact on the company's daily operations and sustainable development.

Analysts believe that this adjustment means that the company will temporarily end its previously planned equity financing plan, and its capital planning will enter a new stage that focuses more on business fundamentals. Compared to the refinancing plan in 2023, the company's current business layout has shifted more towards AI big models, multimodal content creation, AI short dramas, and AIGC commercial applications. The IP development scenarios have also further extended from traditional web articles and film adaptations to new forms such as AI short dramas and interactive IPs.

According to the 2026 semi annual report of Chinese Online, the company achieved a revenue of 578 million yuan in the first half of the year, a year-on-year increase of 3.85%; The net profit attributable to the parent company decreased by more than 80% year-on-year, with a net profit attributable to the parent company of 2.8334 million yuan achieved in the second quarter, successfully turning losses into profits. The overall gross profit margin increased to 49.58%, a year-on-year increase of 17.71 percentage points, and the profitability significantly improved. The net cash flow from operating activities turned positive from negative to 127 million yuan, an improvement of 222.07% year-on-year. The comprehensive improvement of these core business indicators indicates that the quality of the company's operations is steadily improving.

In terms of business structure transformation, in the first half of 2026, the revenue of Chinese online short dramas and IP derivatives business reached 411 million yuan, a significant increase of 108.72% year-on-year, and the revenue scale has significantly surpassed traditional online literature business, becoming the company's largest source of revenue. Among them, the overseas short drama platform FlareFlow achieved a revenue of 253 million yuan and a net profit of 152 million yuan, turning losses into profits year-on-year and achieving monthly operational breakeven ahead of schedule. The platform has accumulated over 52 million registered users, covering more than 200 countries and regions, and supporting 14 languages. The short drama going global is entering the profit realization period from the stage of traffic expansion, and the commercialization ability of the company's global layout has been preliminarily verified.

The cost reduction and efficiency improvement of AI in content production have also steadily entered the stage of business verification. At present, the company has produced and launched over 1200 high-quality AI short dramas, including more than 10 dramas with over 100 million views and over 80 dramas with over 10 million views. The full stack AI content creation platform "Dimension Magic Pen" released by the company, based on self-developed Xiaoyao AI, achieves full coverage from intelligent script disassembly to multimodal post rendering. Relying on AI capabilities, the production cost of AI short dramas per minute has decreased by more than 75% compared to traditional 3D animation, and the overall production time per episode has been reduced by about 50%. The company expects that by the end of 2026, the annual production capacity of AI short dramas is expected to reach 3000 units, showing a several fold increase compared to the same period last year. AI is upgrading from a content production tool to a core growth engine for companies.

From the core data disclosed in the semi annual report, it can be seen that the company's operational quality is substantially improving in the second quarter, with a turnaround from negative to positive cash flow and a significant increase in gross profit margin. After the successive adjustments of A/H share capital arrangements, the market's attention to Chinese Online may return more to its operations. What is even more worth observing next is the actual implementation capability of China Online's "IP+AI+Going Global" strategy, as well as whether AI driven content industrialization production can continue to release growth momentum.