"Red Celebrity Economy First Stock" Tianxia Show Strives for Hong Kong Stock Exchange: Profits "Three Consecutive Declines," Increasing Fundraising and Globalization

After nearly six years of listing on the A-shares market, “Red Celebrity Economy’s First Stock” Tianxia Xiu (600556.SH) officially launched a bid for the Hong Kong Stock Exchange.

On January 5th, the HKEX official website showed that Tianxia Xiu Digital Technology (Group) Co., Ltd. (hereinafter “Tianxia Xiu”) submitted a listing application to HKEX, with Deutsche Bank, Guotai Huarong, and Guotai Junan International serving as joint sponsors.

According to the prospectus, Tianxia Xiu was established in 2009 and is the first domestically mature influencer marketing solution platform company. It aims to become a “super connector” in the global influencer marketing industry by building bridges between advertisers and influencers, MCNs (multi-channel networks), and major third-party UGC (user-generated content) platforms.

Tianxia Xiu’s business is mainly divided into two segments: influencer marketing solution platform and innovative influencer economy ecosystem. The former is its main revenue source, providing influencer marketing solutions to advertisers through its proprietary platform WEIQ. As of the third quarter of 2025, the platform had approximately 222,600 registered advertisers, about 20,200 MCN agencies, and nearly 3.5862 million registered influencers.

Image source: Tianxia Xiu Prospectus

According to data from Frost & Sullivan, based on 2024 revenue, Tianxia Xiu ranks first in China’s influencer marketing solution platform industry with a 26.1% market share, maintaining this position for five consecutive years; simultaneously, it holds a 16.5% market share globally, leading the worldwide influencer marketing solution platform industry.

Behind its impressive market share, Tianxia Xiu’s recent financial performance has been less optimistic. The prospectus shows that from 2023 to the first three quarters of 2025, the company achieved revenues of RMB 4.202 billion, RMB 4.066 billion, and RMB 2.734 billion, respectively; net profits for the same periods were RMB 80.964 million, RMB 43.353 million, and RMB 32.573 million. During this period, Tianxia Xiu’s revenue growth rates were 1.77%, -3.23%, and -10.21%; net profit year-over-year declined by 48.49%, 46.45%, and 46.2%.

Additionally, from 2023 to the first three quarters of 2025, the company’s net cash flow from operating activities was RMB 299 million, RMB 154 million, and negative RMB 36.499 million. As cash flow turned negative, Tianxia Xiu’s accounts receivable remained high. By the end of the third quarter of 2025, trade receivables and notes receivable reached RMB 1.968 billion, accounting for nearly 44% of total current assets of RMB 4.468 billion.

In the prospectus, Tianxia Xiu stated that some small and medium-sized clients experienced financial difficulties, delayed promotional activities, or even terminated business, leading the company to recognize bad debt provisions in 2023 and 2024. For the fiscal years ending December 31, 2023, and 2024, the company recorded impairment losses on receivables of RMB 98.114 million and RMB 76.459 million, respectively, both exceeding the company’s net profit for those periods.

Regarding the use of proceeds, the prospectus clearly states that funds raised from this H-share offering and listing will mainly be used for: global strategic expansion and business development, including establishing and operating overseas offices; expanding its influencer economy ecosystem through synergy initiatives and diversification efforts, including consumer brand incubation and development plans, creation and commercialization of virtual influencer IP, and strategic collaborations with celebrities and artists; seeking strategic investments, acquisitions, and partnerships aligned with the company’s long-term growth strategy and with significant synergy potential; and for working capital and general corporate purposes.