Can the list of luxury shareholders solve the difficulties faced by Guomai Culture after its listing?
With the aura of celebritiesFruit wheat culture has always attracted the attention of the capital market.
On November 25, the Shenzhen Stock Exchange issued an announcement on the results of the 51st deliberation meeting of the GEM Listing Committee in 2020, and Guomai Culture Media Co., Ltd. (hereinafter referred to as “Guomai Culture”) made the first meeting.
Behind the Star Shareholders
Guomai Culture was established in 2012 by Lu Jinbo, one of the “first-generation collection writers”, and Zhou Qiaorong, the mother of well-known writer Han Han. Writers such as Zhang Haochen and Yi Zhongtian are also shareholders, holding 0.2% and 0.19% of Guomai Culture respectively.
In addition to the blessings of celebrity writers, Guomai Culture is also well-known investment institution’s loving.
The data shows that the latitude and longitudeChina Pass through Jingwei Chuangda andJingtianweidi holds 15.76% of the shares. PricewaterhouseCoopers, IDG Capital, Huagai Capital, Asahi Ventures and other institutions also participated in the investment.
The eye-catching shareholder list has naturally aroused many concerns. At the review meeting, the Listing Committee mentioned multiple risks in the Guomai culture, including multiple failures in gambling, frequent resignations of executives, and the sustainability of the business model, and requested explanations.
In addition, it was discovered that in terms of copyright procurement, Guomai Culture has related transactions with Han Han and its related parties. During the reporting period, Guomai Culture paid Han Han a large sum of money in advance, and the balance at the end of the year reached 9,442,900 yuan.
Regarding prepayments, the prospectus explained that “the prepayments are mainly prepaid royalties, in order to lock high-quality copyrights in advance.”
Book publishing business accounts for more than 90% of revenue
The main business of Guomai Culture includes book planning and distribution, digital content business, and IP derivative and operation. Among them, book planning and distribution income accounts for more than 90% of the main business income, which is the company’s core business.
Source: Prospectus (draft for the meeting)
It’s a consensus in the industry that it’s difficult to make money in the physical book business. According to Beijing Opening Information Technology Co., Ltd. conducts research on the national book retail market, In the first half of 2020, the overall national book retail market fell 9.29% year-on-year, and the physical store channel fell 47.36% year-on-year.
This will be negative to downstream companies to a certain extent. According to the prospectus, in the first half of this year, the performance of Guomai Culture declined, and its operating income was less than 40% of last year, and its net profit fell by 17.92% compared with the same period of the previous year, reaching only 16 million yuan.
In addition, according to data from the prospectus, from 2017 to the first half of 2020, the proportion of Guomai cultural inventory in operating income is much higher than the average of its peers, which has increased the company’s operating pressure to a certain extent.
However, under the dual pressure of declining revenue and insufficient funds, Guomai Culture still chooses Shigekura’s book planning and distribution business, indicating that it will continue to strengthen its book business in the next three years and continue to expand its book varieties through copyright library construction projects. Scale, the project plans to invest 350 million yuan, and it is estimated that 550 kinds of book copyrights will be purchased.