Gravity's Revenue Dip: Navigating Challenges and Exploring Opportunities in a Competitive Landscape
1min read Performance of the Quarterly Report
Gravity (stock code: GRVY) recorded an operating revenue of RMB129.723 billion as of December 31, 2024, a year-on-year decrease of 11.00% from RMB145.530 billion as of December 31, 2023. This change indicates that the company faces certain pressure in terms of revenue, which may affect its overall profitability and market confidence.
Key Data from the Financial Report
1. A 11.00% decrease in operating revenue reflects the challenges the company faces in the market.
2. A significant reduction in sales costs, with RMB81.008 billion in 2024 compared to RMB93.330 billion in 2023, may affect the gross profit level.
3. The overall intensified competition within the industry, with other companies in the industry also reporting revenue declines, indicates a weakened industry as a whole.
Peer Comparison
1. Industry-wide analysis: In 2024, the overall industry's operating revenue was generally affected by the economic slowdown and intensified market competition, with many companies facing challenges in revenue decline. According to Huatai Securities' forecast, the industry's operating revenue is expected to be RMB278.3 billion, RMB315.5 billion, and RMB352.8 billion under different scenarios, with a year-on-year change of -31.4%, -22.3%, and -13.1%, respectively [source] (http://www1.hkexnews.hk/listedco/listconews/sehk/2025/0411/2025041100524_c.pdf).
2. Peer evaluation analysis: Gravity's operating revenue decreased by 11.00% year-on-year, which is at a medium level in the same industry, indicating a weakened competitiveness in the market. Although the decline in revenue is relatively small, attention should be paid to its market positioning and product strategy to maintain its competitive advantage.
Summary
Gravity's revenue decline is mainly affected by the weakening of market demand, intensified industry competition, and macroeconomic uncertainties. In addition, the revenue transfer of some subsidiaries directly led to the overall decline in operating revenue. Although the reduction in sales costs may have a positive impact on profits, overall profitability still faces pressure.
Opportunities
1. The company can enhance revenue through optimizing product pricing strategies, especially in a competitive market environment.
2. Seeking new markets and new customers, especially in overseas markets, can help diversify revenue sources and boost overall operating revenue.
3. Enhancing market competitiveness through technological innovation and improving product quality can attract more consumers.
Risks
1. The intensified competition within the industry may further squeeze the company's market share and profit margin.
2. Uncertainties in the macroeconomic environment, as well as high inflation and interest rates, may affect the company's operating costs and profitability.
3. If the company fails to respond promptly to changes in customer relationships, especially in cases where customer satisfaction is affected by collection methods such as lawsuits, revenue may continue to be sluggish.
