Good morning,

Our latest trade idea, Glory Star New Media Group (GSMG), just announced some major news this morning that they have resumed content production under an agreement with JD.com, one of China's largest e-commerce platform.

Glory Star New Media Group Holdings Limited Announces Update on Its Content Partnership with JD.com

BEIJING, May 21, 2020 (GLOBE NEWSWIRE) -- Glory Star New Media Group Holdings Limited (GSMG) (the “Company”), a leading mobile and online digital media and entertainment company in China, today announced that it had resumed content production, which was suspended due to the COVID-19 outbreak for JD.com Inc. (“JD”), one of China’s largest e-commerce platforms. The Company previously entered into a content collaboration framework agreement with JD, at the end of 2019.

As part of the partnership, the Company will develop solutions to help JD fulfill their customers’ needs for premium lifestyle-oriented online content, in the forms of text and short-form videos.

The content production for JD.com is a great addition to Glory Star’s premium digital client lists which includes Tencent, Alibaba, Weibo, Iqiyi as well as traditional consumer brand clients such as Starbucks, Pantene, Louis Vuitton, Samsung and Sony etc.

“While the outbreak of COVID-19 has gradually been brought under control, we are excited to resume our content production in May as part of our partnerships with all of our clients,” commented Mr. Bing Zhang, Chairman and Chief Executive Officer of Glory Star. “In the past three years, we have leveraged our industry-leading content production and content marketing capabilities to serve consumer brands both at home and abroad. Through our collaboration, our premium content will help JD better serve its massive customer base by establishing a complete content service ecosystem. As we actively explore additional collaboration opportunities with JD for a long-term partnership, we are confident that our partnership will serve as an important driver for our growth and a success case for us to forge more strategic partnerships going forward.”

About JD.com.
JD.com is a leading technology driven e-commerce company transforming to become the leading supply chain-based technology and service provider. The company’s cutting-edge retail infrastructure seeks to enable consumers to buy whatever they want, whenever and wherever they want it. The company has opened its technology and infrastructure to partners, brands and other sectors, as part of its Retail as a Service offering to help drive productivity and innovation across a range of industries. JD.com is the largest retailer in China, a member of the NASDAQ100 and a Fortune Global 500 company.

Read in full at https://finance.yahoo.com/news/glory-star-media-group-holdings-120010774.html

All the best today.


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Subscribers,

We've had a nice run with NASDAQ listed companies in the past few weeks, and we have another for tomorrow.

It's time to get Glory Star New Media Group (GSMG) on your screen right away.

GSMG has been steadily rising in recent times and is currently trading just above $4 after hitting a 52 week low of $1.46 a couple months ago.

Back in February this year, GSMG hit a 52 week high of $11.53.

There has been a strong surge in GSMG in recent days, suggesting there could be something going on that investors need to pay close attention to.

Glory Star New Media Group Holdings Limited (NASDAQ: GSMG) is a leading mobile entertainment operator in China. Glory Star’s ability to integrate premium lifestyle content, including short videos, online variety shows, online dramas, live streaming, its Cheers lifestyle video series, e-Mall, and mobile app, along with innovative e-commerce offerings on its platform enables it to pursue its mission of enriching peoples’ lives. The company’s large and active user base creates valuable engagement opportunities with consumers and enhances platform stickiness with thousands of domestic and international brands.

For more information on GSMG visit http://www.yaoshixinghui.com/ 

On February 15th TKK Symphony Acquisition Corporation, a special purpose acquisition company, announced closing a share exchange agreement pursuant to which TKK acquired Glory Star in a Business Combination. TKK changed its name to “Glory Star New Media Group Holdings Limited” or GSMG, trading on the high profile NASDAQ exchange. Prior to this in 2018, the original IPO generated gross proceeds of $220,000,000 for the company. 

The potential maximum value of this transaction is approximately $525,000,000, including approximately $100,000,000 in earnout shares. To further the high earnings power here, GSMG management remains committed to its successful strategy of integrating premium lifestyle content with innovative e-commerce offerings to benefit from the growth of consumerism in China. 
 

Glory Star Reports First Quarter 2020 Financial Results

BEIJING, May 11, 2020 (GLOBE NEWSWIRE) -- Glory Star New Media Group Holdings Limited (GSMG) (“Glory Star” or the “Company”), a leading mobile and online digital media and entertainment company in China, today announced its financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Operating Highlights

• Downloads of the CHEERS App¹ exceeded 100.5 million as of March 31, 2020, compared to 17.2 million as of March 31, 2019.
   
• Average daily active users (“DAUs”)² of the CHEERS App increased to 4.1 million from 0.5 million in the same period of 2019.
   
• The Company’s e-Mall carried over 9,602 Stock Keeping Units (“SKUs”) as of March 31, 2020, and recorded over RMB40.6 million (US$5.8 million) in gross merchandise value (“GMV”)³ through its CHEERS App in the first quarter of 2020.

First Quarter 2020 Financial Highlights

• Revenues were US$9.8 million as compared to US$13.8 million in the same period of 2019.
   
• Income from operations was US$2.9 million as compared to US$4.4 million in the same period of 2019.
   
• Operating margin reduced to 29.7% from 32.3% in the same period of 2019.
   
• Net income attributable to Glory Star New Media Group Holdings Limited’s shareholders was US$2.9 million as compared to US$4.1 million in the same period of 2019.
   
• Net margin was 29.1% as compared to 30.1% in the same period of 2019.

Mr. Bing Zhang, Founder and Chief Executive Officer of Glory Star, commented, “In the face of the COVID-19 novel coronavirus outbreak, we delivered a solid operating performance, advanced our flagship e-commerce platform, and drove user base growth. We also maintained our content leadership by focusing on the creation of original, professionally produced content in the areas of lifestyle, culture, and fashion. As such, we continued to have success in converting content viewers into CHEERS App users, which was illustrated by an excess of 100.5 million CHEERS App downloads, in total, as of March 31, 2020, compared to 17.2 million CHEERS App downloads, in total, by the end of the prior-year period. Moreover, as a result of our platform stickiness and engaging content, MAUs in the period grew by 7% on a sequential basis. Our healthy growth trajectory also continued to fuel GMV growth as illustrated by more than US$3.0 million in GMV for the month of March.”

“Undoubtedly the outbreak of COVID-19 has had a substantial impact on both the overall market environment and our business in the quarter. As a result of the outbreak, we experienced a noticeable dampening of advertising demand as well as a slowdown in our copyrights business during the quarter. The decline in both businesses was not only a result of the economic slump, but also largely a result of our decision to put our own employees first, as we encouraged staff to work from home and follow the government’s policies. Due to this decision, we were less able to film those TV series and short online videos that form a crucial component of our revenue generation capabilities. Nevertheless, our unique business model, swelling user base, and content production leadership will continue to serve as competitive advantages going forward, enabling us to overcome these short-term uncertainties and replenish our revenue streams as conditions gradually normalize.”

Mr. Ian Lee, Chief Financial Officer of Glory Star, added, “In a challenging macro environment, we remained prudent in our finances during the period. As part of our focus on controlling costs, we leveraged the increasing influence of our CHEERS App platform to reduce our expenditure on those payments to various channel owners for broadcast advertisements. Going forward, as our professional content production restarts and the advertising environment becomes gradually more favorable, we are confident that we will pick up where we left off.”

First Quarter 2020 Financial Results

Revenues in the first quarter of 2020 were US$9.8 million as compared to US$13.8 million in the same period of 2019, mainly due to the impact of COVID-19 and its negative effect on the Company’s advertising revenues as well as a decline in copyrights revenues. The decrease was partially offset by an uptick in revenues generated from the copyright licensing of the Company’s internally produced TV show series, custom content production, and CHEERS e-Mall marketplace service, which was first launched in April 2019.

Advertising revenues in the first quarter of 2020 decreased by 24.2% to US$7.9 million from US$10.4 million in the same period of 2019 due to sluggish advertising demand as well as the decline in online short videos and live streaming, attributable to more difficult filming conditions as a result of COVID-19 during that period. The decrease in the Company’s revenues was also due to a decline in copyrights revenues as the Company only earned copyright revenues from one TV channel in the first quarter of 2020 as compared to three channels in the same period of 2019. As such, copyrights revenues decreased by 63.6% to US$1.0 million from US$2.7 million in the same period of 2019.

Total operating expenses in the first quarter of 2020 decreased by 26.3% to US$6.9 million from US$9.3 million in the same period of 2019.

• Cost of revenues in the first quarter of 2020 decreased by 39.2% to US$5.0 million from US$8.2 million in the same period of 2019, which was in line with the decrease in revenues. Gross margin in the first quarter of 2020 improved to 48.8% from 40.3% in the same period of 2019, as the Company reduced expenditures on payments to various channel owners for broadcast advertisements and relied more heavily on its own CHEERs App platform, which has already attracted a large number of users, to provide advertising services.
   
• Sales and marketing expenses in the first quarter of 2020 were US$0.4 million compared to US$0.3 million in the same period of 2019. As a percentage of revenues, sales and marketing expenses in the first quarter of 2020 were 3.9% as compared to 1.9% in the same period of 2019, which was due to the increase of coupons and reward points provided to users on CHEERS e-Mall to stimulate platform consumption.
   
• General and administrative expenses in the first quarter of 2020 were US$1.3 million compared to US$0.6 million in the same period of 2019. As a percentage of revenues, general and administrative expenses in the first quarter of 2020 were 13.2% compared to 4.6% in the same period of 2019. This increase was mainly attributable to higher professional service fees incurred after being listed as a public company as well as an increase in bad debt expense in the period.
   
• Research and development expenses in the first quarter of 2020 were US$0.2 million compared to US$0.2 million in the same period of 2019. As a percentage of revenues, research and development expenses in the first quarter of 2020 were 2.1% compared to 1.4% in the same period of 2019. Despite the decline in the Company’s revenues during the first quarter of 2020 due to the impact of COVID-19, the Company continued to invest in the information technology of its CHEERS e-Mall platform, which led to an increase in research and development expenses as a percentage of revenues. This indicates that the Company strongly values maintaining its leadership in technology and has continued to strengthen its technology and research and development capabilities.

Income from operations in the first quarter of 2020 was US$2.9 million compared to US$4.4 million in the same period of 2019. Operating margin in the first quarter of 2020 reduced slightly to 29.7% from 32.3% in the same period of 2019.

Net income attributable to Glory Star New Media Group Holdings Limited’s shareholders in the first quarter of 2020 was US$2.9 million compared to US$4.1 million in the same period of 2019. Net margin in the first quarter of 2020 reduced slightly to 29.1% from 30.1% in the same period of 2019.

Basic and diluted earnings per share in the first quarter of 2020 were both US$0.06. In comparison, the Company’s basic and diluted earnings per share in the same period of 2019 were US$0.10 and US$0.09, respectively.

As of March 31, 2020, the Company had cash and cash equivalents of US$10.0 million, compared to US$1.3 million as of March 31, 2019.

Read in full at https://finance.yahoo.com/news/glory-star-reports-first-quarter-225010827.html


All the best.

SmallCapMomo.com

picks@smallcapmomo.com

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