True and false "short drama concept stocks": 22 days and 13 board bull stocks fell to the limit and closed the regulatory letter, and the letter was accused of playing word games

Abstract: When the "China Times" reporter asked why he first admitted and then refuted the rumors, the staff of the Securities Department of Gravity Media denied this statement, saying that "there is no refutation of rumors", and the cooperation content replied on the interactive platform at that time has always been before, and there will be no cooperation revenue in 2023.

China Times (www.chinatimes.net.cn) reporter Chen Feng and Xi reporter Li Moxuan report from Beijing

After trading on December 20, the bull stock Gravity Media (603598. SH) received a regulatory work letter from the Shanghai Stock Exchange. At the same time, the stock price fell for two consecutive days, the stock price fell on the 20th, and closed down more than 5% on the 21st at 24.26 yuan / share.

Because of the concept of short dramas, the stock price of Gravity Media has soared since mid-November, and it has come out of 13 daily limits in 22 days, from about 10 yuan per share to about 30 yuan, with the highest increase of nearly two times.

According to the reporter's incomplete statistics, in the past month, Gravity Media has issued 7 announcements on abnormal fluctuations in stock trading. At the same time, as to whether it is a short drama concept stock, Gravity Media's successive responses have been questioned by investors about playing word games. After the market on the 20th, the staff of the Securities Department of Gravity Media responded to the reporter of the "China Times" on related issues.

"The company is evaluating whether to respond"

On December 20, the Shanghai Stock Exchange issued a regulatory work letter to Gravity Media on the disclosure of information related to the company's abnormal stock price fluctuations, including listed companies, directors, supervisors, senior managers, controlling shareholders and actual controllers.

The reporter found that in addition to Gravitational Media, there have also been cultural investment holdings and Sichuan Jinding recently received regulatory work letters for similar reasons.

On the 20th, the relevant personnel of the Securities Department of Gravity Media told the reporter of the "China Times" more specific content of the regulatory letter: Regarding the recent abnormal fluctuations in the company's stock price, including the turnover rate, increase and other issues, there are four main points in the regulatory letter that need to be confirmed, including the reduction of directors, supervisors and senior executives, the company's operation, and whether the recent disclosure is compliant. The staff member also said that the regulatory letter is not required to be replied to, and if the company does not disclose the situation, it needs to reply, and the company is evaluating whether to reply.

Talking about why the limit fell on the 20th, the staff member said: "It's really hard to say, it may be a market behavior."

Talking about the company's stock price recorded three consecutive boards last week, the staff member said that it was mainly due to the catalysis of short dramas, short video payments, AI and other markets.

On December 21, Gravity Media clearly replied on the interactive platform that the company's main business includes brand marketing, effect marketing, social marketing, e-commerce marketing and integrated operation services. It also said that the company's actual controller's shareholding reduction plan has been terminated ahead of schedule.

There is an essential difference between short drama marketing and short drama payment

On November 8, Gravity Media said on the interactive platform that the company was the first batch of partners of Kuaishou's high-quality short dramas. Since then, Gravity Media has also said that in 2021, the total exposure of short dramas will exceed 2.3 billion.

However, on November 22, after hours, Gravity Media said in an announcement of abnormal stock trading that the company was concerned that some media listed the company as a Douyin short video paid concept stock. At present, the company's main business does not involve Douyin short video payment business.

On December 14, Gravity Media said in the announcement that the content of the reply on November 8 mainly came from the company's 2020 and 2021 annual reports, and the short drama content production business involved was carried out by the company in 2022 and before, and no related production business is currently involved.

Gravity Media also said that this year, the company has obtained orders related to short drama marketing, and the business only conducts brand marketing for customers through the placement of advertisements in short dramas, and does not involve the production and operation of short drama content. There is an essential difference between the short drama marketing business and the traditional paid short drama business. As of the 14th, the total amount of short drama marketing orders was 7.5 million yuan, accounting for a small proportion of the company's total revenue, and it will not have a significant impact on the company's revenue and profit.

At the time of the second clarification, at that time, in the secondary market, Gravity Media had already stepped out of the market of 21 days and 12 boards, and some investors questioned Gravity Media playing word games on the letter to speculate the stock price.

When asked by a reporter from the "China Times" why he first admitted and then refuted the relationship between the rumors and the short drama, the staff of the Securities Department of Gravity Media denied this statement, saying that "there is no refutation of rumors", and the cooperation content replied on the interactive platform at that time has always been before, and there will be no cooperation revenue in 2023. Later, the marketing and promotion revenue announced was in the past two weeks, and there was no such revenue when the interactive platform replied in early November.

The stock price diverges from the company's performance

Although the concept of short dramas has become "demonic", if you return to the fundamentals, the financial situation of Gravity Media is not ideal. According to the financial report, the net profit attributable to the parent company of Gravity Media in 2019, 2021, and 2022 will be 211 million yuan, 207 million yuan, and 100 million yuan respectively. When the announcement reminded of the risk, Gravity Media said that the company's net profit attributable to shareholders of listed companies in the third quarter of 2023 was 3.1797 million yuan, a year-on-year decrease of 10.53%.

Looking forward to investment opportunities in 2024, Cinda Securities Research Report said that in addition to being a new track increment, micro-short dramas and live-action film and television games will effectively make up for the long production cycle, limited production capacity and insufficient ways to realize film and television IP copyrights in the film and television industry, and are expected to open up new space for advertising traffic models and IP copyright monetization in the film and television industry.

Cinda Securities also pointed out that the micro-short drama industry has risk factors for declining growth, such as the serious trend of content homogenization, the intensification of industry regulatory risks, and the decline in the growth rate of industry scale.

Jiang Han, a senior researcher at Pangu Think Tank, told the China Times that with the popularization of the Internet and mobile Internet, people's demand for short videos is getting higher and higher, and micro-short dramas, as one of them, have high commercial value and market potential. But he also pointed out that the profit model and business model of micro-short drama companies need to be clear and clear.

Jiang Han suggested that for investors, it is necessary to understand the company's revenue sources and profit model in order to evaluate its business prospects and investment value. At the same time, investors need to understand industry trends and policy environment in order to adjust their investment strategies in a timely manner. The micro-short drama industry is in a stage of rapid development, and the policy and market environment may also change, so it is necessary to pay close attention to industry dynamics and adjust investment strategies in a timely manner.