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Yangtze Business Daily News● Yangtze Business Daily reporter Shen Yourong

Faced with business pressure, Luo Yanji and Jiang Li did not choose to face the challenges head-on.

On the evening of August 12, Gravity Media (603598.SH) issued an announcement stating that the person acting in concert with the company's controlling shareholder Luo Yanji had signed an agreement with other parties to transfer 15 million shares of the company.

After the completion of this transfer, Jiang Li will complete the liquidation. This transaction is discounted by about 10%, and the transaction price is about 161 million yuan.

As the actual controller and controlling shareholder of Gravity Media, Luo Yanji has sold off his shares through the secondary market many times. According to preliminary statistics from the Yangtze Business Daily based on Wind system data, he has cashed out a total of about 309 million yuan.

If Jiang Li completes this liquidation, Luo Yanji and his wife will cash out a total of 470 million yuan.

Gravity Media is mainly engaged in brand marketing, e-commerce marketing and other services, and entered the A-share market in 2015.

Overall, since its listing, Gravity Media's operating performance has not been ideal. From 2015 to 2023, the company's net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was approximately -177 million yuan.

In the past six years, Gravity Media has not paid cash dividends to shareholders.

Clearance transfer by actual controller

Jiang Li, an actual controller of Gravity Media, is in the process of clearing out her shares.

According to the announcement of Gravity Media, on August 12, the company's controlling shareholder and person acting in concert Jiang Li signed a "Share Transfer Agreement" with Shanghai Quanqiao Private Equity Fund Management Co., Ltd. (hereinafter referred to as "Quanqiao Fund") to transfer a total of 15 million shares of the company's unrestricted tradable shares held by her (accounting for 5.60% of the company's total share capital) to Quanqiao Fund.

Currently, Jiang Li holds 15 million shares of Yinli Media, accounting for 5.60% of the company's total share capital. After the completion of this agreement transfer, Jiang Li will no longer hold shares in the company. This means that this transaction is a clearance transfer by Jiang Li.

The two parties agreed that the transfer price of the target shares was RMB 10.76 per share, and the total transfer price was approximately RMB 161 million.

10.76 yuan per share, which is about 10% lower than the closing price of 11.95 yuan per share on August 9, the trading day before the signing of the transfer agreement.

The controlling shareholder of Yinli Media is Luo Yanji, who holds 37.05% of the company's shares. Luo Yanji and Jiang Li are husband and wife, and both are the actual controllers of Yinli Media.

This is not the first time that Jiang Li has reduced her holdings. From December 30, 2019 to June 23, 2020, Jiang Li reduced her holdings of 5 million shares of Gravity Media through centralized bidding transactions, accounting for 1.85% of the company's total share capital.

Not only Jiang Li reduced her holdings, Luo Yanji also reduced his holdings more intensively.

Yinli Media was founded in August 2005 by natural persons Luo Yanji and Zheng Qingyi with a registered capital of RMB 500,000. In 2011, the company completed its share reform and was listed on the A-share market on May 27, 2015.

At the beginning of the listing, Luo Yanji and Jiang Li held 48.37% and 7.50% of the company's shares respectively, and Beijing Hechuang Shengshi Management Consulting Partnership (Limited Partnership) held 7.50% of the company's shares. The company was wholly owned by Luo Yanji and Jiang Li.

By the end of the first quarter of this year, Luo Yanji's shareholding ratio was 37.05%, Beijing Hechuang Shengshi Management Consulting Partnership (Limited Partnership)'s shareholding ratio was 7.47%, and Jiang Li's shareholding ratio was 5.60%.

A comparison shows that since its listing, Luo Yanji has reduced its holdings by more than 10%.

According to rough estimates and statistics based on Wind system data by a reporter from the Yangtze Business Daily, Luo Yanji has cashed out a total of about 309 million yuan through selling off shares in the secondary market.

If Jiang Li completes the transfer agreement, Luo Yanji and Jiang Li will cash out a total of about 470 million yuan.

In the secondary market, on December 19, 2023, the share price of Gravity Media reached a staged high of 29.16 yuan per share, and closed at 11.79 yuan per share on August 13 this year. In less than eight months, the company's share price range fell by about 60%.

Net profit in the first quarter turned from growth to decline

Gravity Media, whose actual controller is busy reducing its holdings and cashing out, is under great operating pressure.

Gravity Media is mainly engaged in brand marketing, performance marketing, social marketing, e-commerce marketing and operation services and data consulting services. The company is guided by market insight and brand consulting, and provides customers with comprehensive communication services based on media and consumer insight, communication strategy, multi-screen media agency, content customization and distribution, social communication, etc.

It is disclosed that Gravity Media has long-term and close cooperation with more than 300 media, forming a media resource matrix covering all-domain media and all-domain traffic, including traditional TV media, long video media, short video platforms, more than 200 head APPs in vertical segments, etc. More than 100 media have cooperated with the company for more than 10 years.

At the same time, the company has served thousands of domestic and foreign brand companies, and has maintained long-term and stable cooperative relations with most customers, with nearly 100 companies cooperating for more than 10 years. Its customers include Vipshop, Yangyuan Beverage, Mengniu, Junlebao, Midea, Joyoung Electric, etc. The company has also established cooperation with Internet unicorn companies such as Ctrip, Meituan, Pinduoduo, Youxin Used Cars, VIPKid, Kuaishou, Tencent Interactive Entertainment, and Zhangmen 1 to 1.

However, the company's operating performance was not ideal.

In 2013, before going public, Gravity Media achieved operating income and net profit of 1.393 billion yuan and 63 million yuan, respectively. Since then, operating income has been on the rise, while net profit has fluctuated frequently. In 2017, Gravity Media's net profit was 67 million yuan, and in 2019 it suffered a loss of 211 million yuan. From 2020 to 2022, net profits were 102 million yuan, -207 million yuan, and -100 million yuan, respectively. In 2020, the company's operating income was 5.596 billion yuan, the highest level to date.

In 2023, the company's operating income was 4.738 billion yuan, a year-on-year increase of 9.34%; the net profit was 48 million yuan, turning losses into profits.

The growth of operating income and the alternating profits and losses of net profit are related to the previous aggressive acquisitions.

In August and September 2017, Gravity Media announced that it planned to acquire 100% of the equity of Zhuhai Shitong for a transfer price of 385 million yuan, with an appreciation rate of 832.33%; it planned to acquire 60% of the equity of Shanghai Zhiqu for a transfer price of 288 million yuan, with an appreciation rate of 608.84%.

In 2019, Zhuhai Shitong's net profit was 41.4357 million yuan, failing to achieve the performance commitment of 50.40 million yuan. In 2020, Shanghai Zhiqu and Zhuhai Shitong's net profits were 54.1596 million yuan and 29.5445 million yuan, respectively, failing to achieve the promised performance of 69.12 million yuan and 60.48 million yuan.

The performance of the acquisition targets did not meet the target, and goodwill impairment ensued. In 2019 and 2021, the company successively made provisions for goodwill impairment of 317 million yuan and 198 million yuan. In these two years, the company's net profit loss exceeded 200 million yuan.

In the first quarter of this year, the company's operating income was 1.268 billion yuan, a year-on-year increase of 32.45%; net profit was 8.0445 million yuan, a year-on-year decrease of 7.29%.

Wind data shows that since its listing, Gravity Media has achieved a cumulative net profit of -177 million yuan. Since 2018, the company has not distributed cash dividends.

Since 2023, Gravity Media's operating income has been recovering, but the actual controller Jiang Li wants to sell all her shares. What kind of development prospects will the company have?