The stock price plummeted by 80%, and the market value evaporated by 3.8 billion in one day, what happened?
On January 16, Hong Kong stocks Lehua Entertainment continued to fall in early trading, once falling 80%, the stock price hit a new low since listing, as of press time, the stock fell 75.92% to HK$1.38, with a total market capitalization of HK$1.203 billion, evaporating nearly HK$3.8 billion from yesterday, and falling more than 82% in the past three trading days.
According to the performance data of Lehua Entertainment, known as "Wang Yibo Concept Stock", in the first half of 2023, Lehua Entertainment's revenue was 365 million yuan, a year-on-year decrease of 25.2%, a loss of about 176 million yuan during the period, a profit of 92.733 million yuan in the same period in 2022, and an adjusted net profit of 49.892 million yuan during the period, a year-on-year decrease of 70.4%.
On January 19, 2023, Lehua Entertainment was listed on the Hong Kong Stock Exchange, becoming the "first stock of artist brokerage".
Wang Yibo once "fed half of Lehua Entertainment"
40% of the total share capital will be lifted soon
According to public information, Beijing Lehua Yuanyu Culture Communication Co., Ltd. was established in 2009 and is located in Beijing, with a registered capital of 110 million yuan and Du Hua as the legal representative. The Company was listed on the Main Board of the Stock Exchange on 19 January 2023. The company's revenue structure is relatively simple and highly dependent on the management of top artists. Taking the first nine months of 2022 as an example, Lehua Entertainment's revenue was 752 million yuan, of which nearly 6% of the revenue contributed by Wang Yibo was contributed.
It is reported that Lehua Entertainment is mainly engaged in three major businesses: artist management, music IP production and operation, and pan-entertainment. Among them, artist management accounts for more than 90% of recent income. The income of artist management mainly comes from the participation of artists in commercial activities such as endorsements, as well as entertainment content services such as starring in movies and dramas.
It is reported that Lehua Entertainment Group has now become a cultural and entertainment platform that includes three complementary business segments: artist management, music IP production and operation and pan-entertainment business. Lehua Entertainment has signed artists such as Han Geng, Wang Yibo, Cheng Xiao, Wu Xuanyi, Meng Meiqi, Fan Chengcheng, Huang Minghao, etc.
Screenshot from the company's official website
In the first half of 2023, Lehua Entertainment's revenue was 365 million yuan, a year-on-year decrease of 25.2%, and the loss during the period was about 176 million yuan. Lehua Entertainment said that mainly due to poor market conditions, the demand for services provided by contracted artists has declined.
It is worth noting that on January 19, 2023, Lehua Entertainment was listed on the Hong Kong Stock Exchange, and the company's prospectus showed that the offer shares purchased by cornerstone investors were subject to a 12-month lock-up from the listing date, so Lehua Entertainment will usher in the release of 349.269 million shares (accounting for 40.06% of the total share capital) on January 19.
According to the prospectus, Lehua Entertainment introduced a number of cornerstone investors when it went public, namely Sun Mass Energy (a wholly-owned holding company of China Ruyi), Maoyan Hong Kong, Ding Shijia (executive director and vice chairman of Anta Sports) and Haozan Asset Management Co., Ltd., with a total subscription of US$19.9 million.
Known as "the first stock of artist management"
The company responded to Wang Yibo's reputation rights protection case
According to the announcement of Lehua Entertainment, according to Frost & Sullivan data, in the highly fragmented domestic artist management market, Lehua Entertainment ranked first in artist management revenue in 2021, with a market share of 1.9%. As a result, Lehua Entertainment is regarded as the "first stock of artist management" in the Hong Kong stock market.
Top artists are very important to Lehua Entertainment. At present, the most profitable person for Lehua Entertainment is Wang Yibo, who has been repeatedly mentioned in the prospectus and has 40 million Weibo fans. From 2019 to the first three quarters of 2022, Wang Yibo's revenue for the company accounted for 16.8%, 36.7%, 49.5% and 58.8% of the company's total revenue in the same period, respectively. On January 19, 2023, Lehua Entertainment Group officially landed on the Hong Kong Stock Exchange and became the "No. 1 Artist Management Stock" in Hong Kong stocks. On the same day, Du Hua, Han Geng, Wang Yibo, Cheng Er, Yu Dong and others appeared on the scene to beat the gong.
According to Red Star News, at the live broadcast ceremony on the first day of listing, Wang Yibo was introduced as a shareholder of Lehua Entertainment for the first time, which had never been disclosed by the outside world before.
Judging from the current contract period, Han Geng will expire in 2024, and Wang Yibo and Meng Meiqi will expire in 2026.
On January 15, Lehua Entertainment's official Weibo released a description of the progress of Mr. Wang Yibo's reputation rights protection case: Recently, our company found that there are still a large number of network entities that continue to publish suspected insulting and defamatory remarks against our company's artist Mr. Wang Yibo on various platforms, which has aroused the attention, reprinting, and dissemination of relevant content from many network users, resulting in a serious impact on Mr. Wang Yibo's reputation and social image, and is suspected of seriously infringing on Mr. Wang Yibo's right to reputation. In this regard, our company resolutely protects the legitimate rights and interests of Mr. Wang Yibo and actively protects his rights through legal channels.
Editor|Wang Yuelong, Gai Yuanyuan, Du Hengfeng
Proofreading|Sun Zhicheng
Cover image source: Visual China
The daily economic news is synthesized from public information, Red Star News, and company announcements
National Business Daily