Glory Star New Media Group Holdings Ltd. (GSMG), a company providing advertisement and content production services in China, has carried its gaining momentum within the premarket trading session. Currently, in pre-hours, GSMG stock has gained a tremendous 42.58% in its share price, and as a result of that, the share price of GSMG stands at $2.21. On Wednesday, GSMG stock gained a 4.73% increase.
Subscription agreement
Today, GSMG has announced that it has entered into a subscription agreement with an institutional investor. They both have agreed for sale of up to 2,857,142 ordinary shares of the Company. The gross proceeds from that agreement would be approximately $10,000,000. Each Ordinary Share will be accompanied by a warrant exercisable to purchase one Ordinary Share at an exercise price of $4.40 per share. The company said that it would use the net proceeds from the offering for general corporate purpose and working capital.
Financial results for the first half of 2021
On 19th of August, GSMG reported the financial results for the first half of the fiscal year 2021. According to the details, the downloads of the CHEERS app was about 215.6 million, as compared to the 121 million in the equivalent period of the previous year. The average daily active users of the app increased to 7.1 million during the quarter, while they increased to 4,5 million in the equivalent period of 2020. The revenue in the first half increased 144.6% and stood at $71.9 million, while during the equivalent period of 2020, the revenue stood at $29.4 million. The income from operations increased some 40.9% to $16.2 million as compared to $11.5 million during the equivalent period of 2020. The total operating expenses increased by some 211.2% to $55.7 million. The operating expenses stood at $17.9 million during the equivalent period of 2020. The net cash used in operating activities was $11.9 million, as compared to $1 million during the equivalent period of 2020. Mr. Bing Zhang, Founder and Chief Executive Officer of Glory Star commented on the results that Glory Star accelerated our growth momentum in the first half-year of 2021, and going forward, it plans to deepen its expertise in integrating quality content with lifestyle commerce.
Research coverage of GSMG
On 27th of July, GSMG stock surged some 9.29% after the company announced that Dongxing Securities had initiated research coverage of Glory Star. The price to sales ratio for coverage was kept at 2.21, a corresponding price target of US$6.05 per share, and a rational valuation of US$409 million.
GSMG program enjoying top ranks
In mid of July, GSMG announced that its flagship variety program ” Star Makeover”, a fashion makeover reality game show, had continuously ranked in the top 10 late-night shows in China for 10 consecutive weeks Since premiering, the show’s ratings were skyrocketing. Bing Zhang said on the occasion that based on an attractive viewer base and Show’s entertainment, advertisers are reaching out to companies for advertisement options.
What lies ahead for GSMG stock?
With the effects of pandemic largely subsiding, the analysts believe that GSMG is in a position to take off for the heights of glory. The EPS for this year is expected to increase by 372.60%. The revenue estimate for the next fiscal year stands at $197.41 million. Based on these statistics, potential investors need to closely keep watching GSMG stock movement in the market.
