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Lehua Entertainment responded to the plummeting stock price and owned artists such as Wang Yibo

Lehua Entertainment responded to the plummeting stock price and owned artists such as Wang Yibo


On the 16th, the share price of Hong Kong-listed Lehua Entertainment plummeted by more than 70%.

After the opening of the market that day, Lehua’s stock price fell all the way, with the maximum drop of nearly 80%. As of closing, Lehua Entertainment’s share price fell by more than 77%.

In past reports, the media often associated Lehua Entertainment with its artist Wang Yibo, calling it the “Wang Yibo concept stock.” Just the day before, on January 15, Lehua Entertainment released a progress statement on Wang Yibo’s reputational rights protection case.

According to information on the Lehua Entertainment website, Beijing Lehua Yuanyu Culture Communication Co., Ltd. was registered and established in July 2009 by Du Hua, the founder of Lehua Entertainment Group.

Lehua Entertainment Group currently has three complementary business segments including artist management, music IP production and operation, and pan-entertainment business, with more than 60 artists. Information on the company’s website shows that Lehua Entertainment’s artists include Han Geng, Wang Yibo, Li Wenhan, Cheng Xiao, Meng Meiqi, Wu Xuanyi, etc.

Screenshot of Lehua Entertainment website

Relevant information also shows that Lehua Entertainment is one of the earliest artist management companies in China to enter the virtual artist market. It has cooperated to launch a virtual artist girl group A-SOUL with five members. The participating companies have also launched a virtual artist group with four members. The artist boy group Quantum Boys, and the five-member virtual artist girl group EOE.

On January 19, 2023, Lehua Entertainment Group officially landed on the Hong Kong Stock Exchange and became the “No. 1 artist management stock” in Hong Kong stocks. On that day, Du Hua, Han Geng, Wang Yibo, Cheng Er, Yu Dong and others appeared at the scene to beat the gong.

Previous reports show that in the first three quarters of 2022, Wang Yibo’s revenue accounted for 59% of Lehua Entertainment’s total revenue in the same period. For this reason, Lehua Entertainment was once called “Wang Yibo Concept Stock” by the media.

Lehua Entertainment’s 2023 interim report showed that in the first half of that year, the company suffered a loss of 176 million yuan. During this period, the company’s revenue was 365 million yuan, a year-on-year decrease of 25.2%, mainly due to the decrease in income generated from artist management. Artist management income decreased by 26.6% year-on-year; income from music IP production and operation business decreased by 26.7% year-on-year, mainly due to the decrease in sales of digital singles and albums during the reporting period; income from pan-entertainment business increased by 28.8% year-on-year, mainly due to the decrease in sales of digital singles and albums during the reporting period; Increased revenue generated from concerts organized by contracted artists.

Just one day before today’s stock price plunge, on January 15, Lehua Entertainment’s stock price fell by more than 25%. The reporter noticed that Lehua Entertainment released the “Progress Statement on Mr. Wang Yibo’s Reputation Rights Protection Case” through Weibo that day.

Lehua Entertainment Weibo screenshot

The statement stated that recently, the company has discovered that there are still a large number of Internet entities that continue to publish suspected insulting and defamatory remarks against its artist Wang Yibo on various platforms, which has attracted the attention, reprinting, and comments of many Internet users. The release and dissemination of relevant content has caused Wang Yibo’s reputation and social The image was seriously affected.

The note listed six cases of reputation disputes related to Wang Yibo. The note also said that in addition, there are still other cases of Wang Yibo’s reputation and portrait rights protection in progress.

Lehua Entertainment stated that it will pay close attention to online developments, continue to entrust law firms to collect evidence and file lawsuits on suspected infringing content, and resolutely safeguard Wang Yibo’s legitimate rights and interests.

Announcement screenshot

On the evening of the 16th, Lehua Entertainment issued an announcement regarding abnormal price and trading volume changes. It stated that the company is operating normally and the board of directors has full confidence in the group’s future development prospects; none of the directors holding shares has directly or indirectly, voluntarily or involuntarily, sold or otherwise disposed of their respective interests in the company.

In addition, the board of directors reminds that, except for Ark Trust (Hong Kong) Co., Ltd. and Shengshi Trust (Hong Kong) Co., Ltd. (the trustees who hold shares as incentive reserves under the company’s share incentive plan), they are subject to a 180-day lock-up period; And the company’s controlling shareholders (i.e. Du Hua, Sun Yiding and entities controlled by them) need to be limited to the shares issued before the company’s listing and the cornerstone investors participating in the company’s global offering outside the 24-month lock-up period. The shares are subject to a lock-up period of 12 months from the listing date (i.e. January 19, 2023). The lock-up period will expire on January 18, 2024.



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