Risk Assessment Report on GEO Concept Speculation for Gravity Media

I will now provide you with a systematic and comprehensive investment risk assessment report.

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Gravity Media (Stock Code: 603598.SH) issued a stock trading risk warning announcement on January 12, 2026, formally clarifying the market’s classification of it as a “GEO concept stock” [1]. According to the announcement, the company clearly stated:

[2]. The company’s current main business remains advertising agency services. The GEO business has not yet formed a mature business model, and there are significant uncertainties regarding its market recognition and profit model.

Against the backdrop of a lack of substantive business support, Gravity Media’s stock price has experienced continuous abnormal fluctuations. According to the company’s market performance prior to the announcement, its stock hit the daily upward limit 5 times in 6 trading sessions (“5 daily limits in 6 days”), soaring from around RMB 18 to over RMB 28 [2]. This stock performance is significantly disconnected from the company’s fundamentals, attracting high attention from regulators and market investors.

GEO (Generative Engine Optimization) is an emerging concept that has risen in recent years alongside the development of artificial intelligence technology. According to market research data, the global GEO market size is expected to reach USD 11.2 billion in 2025, with the Chinese market size reaching approximately RMB 2.9 billion [3]. According to calculations by Miaozhen Marketing Academy, the global GEO market size is expected to exceed USD 100 billion by 2030, with the Chinese market size reaching RMB 24 billion [1]. From a market development perspective, GEO does represent an important development direction in the digital marketing field.

However, it must be objectively recognized that GEO technology is still in the early stages of development. A 2026 January research report from Pacific Securities clearly states that GEO technology “is still in the early stages of development with significant growth potential” [1]. This means that even for companies that have truly laid out GEO business, it will take a long period of time and substantial resource investment from R&D to commercialization and stable revenue generation. Gravity Media is still in the process of forming its business division, so it is still a long way from actual commercial operation.

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Based on an analysis of Gravity Media’s trading data from December 1, 2025, to January 12, 2026, we observed the following notable characteristics [0]:

Indicator	Value
Closing Price at Period End	RMB 28.52
Opening Price at Period Start	RMB 17.93
30-Day Increase	59.06%
30-Day Highest Price	RMB 28.52
30-Day Lowest Price	RMB 15.86
Average Daily Trading Volume	25.09 million shares
Standard Deviation of Daily Returns	4.85%
Maximum Single-Day Increase	+10.02%
Maximum Single-Day Decrease	-5.76%
Number of Daily Upward Limit Days	5 days
Number of Daily Downward Limit Days	1 day

From the above data, Gravity Media exhibits typical characteristics of concept speculation during this period: huge short-term gains, sharp intraday fluctuations, and significantly increased trading volume. Notably, the stock hit the daily upward limit 5 times in 30 trading sessions, a pattern that usually indicates highly speculative trading by market funds.

From a fundamental perspective, Gravity Media’s financial situation cannot support its current high stock price [0]:

Financial Indicator	Value	Evaluation
Price-to-Earnings Ratio (P/E)	-442.83x	Loss-making Status
Price-to-Book Ratio (P/B)	36.65x	Severely Overvalued
Return on Equity (ROE)	-8.78%	Negative Earnings
Net Profit Margin	-0.21%	Loss-making
Operating Profit Margin	-0.23%	Loss-making

The company’s core financial indicators are all negative: sustained losses, negative return on equity, and an extremely high price-to-book ratio. This fundamental situation stands in stark contrast to the nearly 60% increase in stock price over 30 days, a typical example of the divergence between “theme speculation” and “value investment” in the A-share market.

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Since 2024, the China Securities Regulatory Commission (CSRC) has continuously intensified its crackdown on illegal and irregular activities in the capital market, issuing more than 500 administrative penalty tickets throughout the year, with fines and confiscations exceeding RMB 12 billion, and more than 100 individuals subject to market access bans [4]. Under the framework of the new “Nine Guidelines for the Capital Market”, regulators have adopted a stricter attitude towards behaviors such as “hot topic chasing” and “concept speculation”.

In early January 2025, the Shanghai Stock Exchange (SSE) took regulatory measures against two companies involved in the “brain-computer interface” concept. Among them, Yahui Long (688575.SH) was given a regulatory warning by the SSE for releasing misleading information related to brain-computer interfaces on the investor interaction platform [5]. After investigation and verification, the partner mentioned in the company’s announcement, Shenzhen Brain-Computer Star Chain Technology Co., Ltd., was established in September 2025 (only 4 months before the announcement was issued) and is still in the early R&D stage, and its technical path is fundamentally different from the market-hyped “invasive brain-computer interface”. This typical “hot topic chasing” behavior received a rapid response and punishment from regulators.

A more typical case is Tianpu Co., Ltd., which was placed under investigation after regulators intervened, as it “secretly established an AI chip subsidiary to chase hot topics and drive its stock to the daily upward limit” and then “quickly returned to its original business” [6]. This case fully demonstrates that regulators have a zero-tolerance attitude towards behaviors that boost stock prices by establishing “shell” concept businesses, and relevant companies and responsible parties will face severe administrative penalties and even criminal liability.

According to relevant provisions of the Securities Law, if information disclosure materials such as securities issuance documents announced by information disclosure obligors of listed companies contain false records, misleading statements, or major omissions, causing investors to suffer losses in securities transactions, the obligors shall be liable for compensation [7]. For “hot topic chasing” behaviors, legal liabilities mainly include:

: Exchanges may take regulatory measures such as regulatory warnings, circulations of criticism, and public condemnation against relevant companies and their responsible persons; if the circumstances are serious, the CSRC may impose administrative penalties such as fines, orders to rectify, and warnings.

: Investors who trade based on reliance on false or misleading information and suffer losses may claim compensation from the listed company and relevant responsible persons. In the case of Suzhou SVG Technology Group Co., Ltd., the court ruled that the listed company should compensate investors for losses caused by its misleading statements, with the board secretary bearing joint and several liability for compensation [7].

: For false statement behaviors with particularly serious circumstances, relevant responsible persons may be suspected of the crime of illegal disclosure or non-disclosure of important information, and face criminal prosecution.

Notably, in several recent cases of illegal “hot topic chasing”, board secretaries of listed companies, as directly responsible persons for information disclosure, have been punished [7]. The CSRC recently publicly solicited opinions on the “Supervision Rules for Board Secretaries of Listed Companies (Draft for Comment)”, further clarifying the scope of board secretaries’ responsibilities and strengthening their accountability for information disclosure and corporate governance. This indicates that regulators are strengthening supervision and accountability for board secretaries, who will bear greater legal risks for illegal information disclosure behaviors such as “hot topic chasing”.

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Through analysis of typical cases in the A-share market in recent years, “hot topic chasing” behaviors usually exhibit the following characteristics [5][6][7]:

: Companies often proactively release relevant information through investor interaction platforms, announcements, news reports, etc., in the early stages of market hot topic formation or after abnormal stock price fluctuations.

: Announcement content is often vague, with ambiguous descriptions of key information such as business substance, technological maturity, and commercial prospects, or deliberate downplaying of risk warnings.

: Only positive information beneficial to the company is disclosed, while risk factors such as immature technology, difficulties in commercialization, and fierce market competition are avoided or mentioned in passing.

: After relevant information is disclosed, the stock price often hits consecutive daily upward limits, severely disconnected from the company’s fundamentals.

: Companies only issue supplementary announcements to clarify the actual situation after regulatory intervention or market questioning, but by then the stock price has already experienced huge fluctuations.

“Hot Topic Chasing” behaviors cause multiple harms to investors, especially retail investors:

: Concept speculation is often accompanied by sharp rises and falls in stock prices. Investors who follow the trend and buy at high levels may face severe losses if the company subsequently issues a clarification announcement or regulators intervene. Taking Tianpu Co., Ltd. as an example, its stock price increased 16-fold while it was chasing the AI hot topic, but investors who participated in the speculation faced huge loss risks after the company was placed under investigation [6].

: Frequent concept speculation and subsequent regulatory punishment events will undermine investors’ confidence in the capital market, which is not conducive to the formation of a healthy and rational investment culture.

: A large amount of capital flows into hot topic companies lacking fundamental support, reducing capital allocation efficiency and hindering the development of the real economy.

According to general forecasts from market institutions, the style of the A-share market may shift from “theme speculation” to “performance realization” in 2026 [6]. The main basis for this judgment includes:

: The strict implementation of the new delisting rules and continuous strengthening of information disclosure accountability have significantly increased the cost of “hot topic chasing” behaviors.

: With economic recovery and improved corporate profitability, capital is shifting from pure concept speculation to high-quality targets with real performance support.

: Institutional investors generally prefer to allocate “hard technology” leaders with technological barriers and performance support, and maintain a cautious attitude towards pseudo-technology companies and hot topic chasing companies.

This means that companies that lack real performance support and rely purely on concept speculation to boost stock prices will face greater valuation correction pressure in 2026.

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Based on the above analysis, we have constructed the following risk assessment framework to comprehensively evaluate Gravity Media:

Risk Dimension	Risk Level	Key Indicators/Explanations
Business Authenticity Risk	Extremely High	GEO Business Division is still in planning phase, no revenue generated
Valuation Bubble Risk	Extremely High	P/B ratio of 36.65x, detached from fundamentals
Regulatory Punishment Risk	High	Questionable information disclosure compliance
Stock Price Volatility Risk	Extremely High	Daily volatility of 4.85%, 5 daily upward limits / 1 daily downward limit
Performance Support Risk	Extremely High	Sustained losses, negative ROE
Concept Fade Risk	High	Stock price will face pressure after concept popularity fades

From a valuation perspective, the current stock price of Gravity Media implies market expectations that the company will successfully transform into a leading enterprise in the GEO field in the short term and achieve large-scale commercial profitability. However, considering the following factors, the likelihood of this expectation being realized is extremely low:

: Even for genuine GEO practitioners, it takes 3-5 years from R&D to stable revenue generation. Gravity Media is still in the process of forming its business division, so the possibility of generating substantive revenue in the short term is almost zero.

: Professional content service providers such as Visual China have already laid out in the GEO field, and these enterprises have massive high-quality copyrighted content and mature technical accumulation [3]. As an advertising agency service provider, Gravity Media has no obvious competitive advantages in this field.

: GEO technology is still in the early exploration stage, and market recognition of its business model remains to be verified. Even if the technology matures, there are still uncertainties regarding how to convert it into stable revenue.

Considering the above factors, we believe that the expectations implied by Gravity Media’s current stock price are difficult to achieve in the foreseeable future, and the stock faces significant valuation regression risk.

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: It is recommended to avoid companies lacking fundamental support for hot topic speculation such as Gravity Media. Regulators are continuously increasing their crackdown on “hot topic chasing” behaviors, and relevant companies face a high probability of exposure to regulatory risks. Institutional capital should adhere to the concept of value investment and allocate high-quality targets with real performance support.

: Highly warn against the risks of participating in concept speculation stocks such as Gravity Media. After the company has clearly announced that “no relevant revenue has been generated”, continuing to chase the upward trend is equivalent to “catching fire with bare hands”. Even if there may still be inertial short-term rises, the probability of the stock price returning to fundamentals in the medium and long term is extremely high.

: It is recommended to reduce holdings or liquidate positions as soon as possible. The company has issued a risk warning announcement, and the risk-return ratio of continuing to hold is severely imbalanced. If regulators subsequently take regulatory measures or place the company under investigation, the stock price may hit consecutive daily downward limits, causing investors to suffer greater losses.

Based on this case analysis, we summarize the following methods for investors to identify “hot topic chasing” companies:

: When company announcements include phrases such as “still in the planning phase”, “has not generated revenue”, or “business model has uncertainties”, investors should be alert to concept speculation risks.

: Through channels such as the company’s official website and investor communication records, understand the actual progress of the company’s relevant business, and distinguish the essential difference between “has generated revenue” and “only has plans”.

: Compare the company’s valuation with that of comparable companies in the same industry. If the valuation deviates significantly from the reasonable range, be alert to bubble risks.

: Pay attention to regulatory inquiries and penalty decisions issued by exchanges and the CSRC against relevant companies or industries, as these are often leading indicators of risk.

: Avoid blindly following market hot topics, and do not invest in targets you do not understand.

From a longer-term perspective, the A-share market is undergoing a structural transformation from a “speculative market” to an “investment market”. The implementation of the new “Nine Guidelines for the Capital Market”, strict implementation of the delisting system, and continuous strengthening of information disclosure supervision are all promoting the market to develop in a more standardized and rational direction. Against this background, the survival space for concept speculation lacking fundamental support such as that of Gravity Media will continue to be compressed.

For investors, this is both a risk warning and an opportunity to screen high-quality investment targets. Instead of gambling on restructuring or chasing hot topics in junk stocks, it is better to focus on companies that truly have technological barriers, sustainable profitability, and standardized information disclosure. This is not only necessary to avoid risks but also the correct way to grasp long-term investment opportunities in the A-share market.

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[1] CNR Finance - “GEO Concept Stocks Continue to Surge; Multiple Stocks Trigger Abnormal Fluctuation Risk Warnings” (https://finance.cnr.cn/ycbd/20260112/t20260112_527491467.shtml)

[2] Securities Times/Sina Finance - “Gravity Media: The Company’s GEO Business Has Not Generated Relevant Revenue” (https://finance.sina.com.cn/jjxw/2026-01-12/doc-inhfzysr9961512.shtml)

[3] Caifuhao/Eastmoney - “GEO (Generative Engine Optimization) is an Optimization Strategy for AI Search Platforms” (https://caifuhao.eastmoney.com/news/20260112000138193198630)

[4] Grandall Law Firm - “2024 Annual Review of Securities Administrative Penalties” (https://www.grandall.com.cn/ghsd/info.aspx?itemid=30432)

[5] Securities Times - “Two Companies Punished Rapidly for ‘Hot Topic Chasing’; Board Secretaries’ Information Disclosure Accountability Strengthened” (https://www.stcn.com/article/detail/3582193.html)

[6] NetEase Finance - “Big Negative News Over the Weekend! 50,000 Shareholders Hit a Mine Over the Weekend! 2 Companies Issue Delisting Warnings, 1 Company Placed Under Investigation” (https://www.163.com/dy/article/KJ0PR6H60539QCIH.html)

[7] CLS - “Yahui Long Given Rapid Regulatory Warning by SSE for Chasing ‘Brain-Computer’ Hot Topic in Information Disclosure” (https://m.cls.cn/detail/2251294)

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The chart above shows the K-line trend of Gravity Media (603598) from December 2025 to January 2026. The chart clearly presents the sharp volatility of the company’s stock price after being classified as a “GEO concept stock” by the market:

• Red candle bodies
  indicate stock price increases,
  green candle bodies
  indicate stock price decreases
• Blue, yellow, and pink lines
  represent the 5-day, 10-day, and 20-day moving averages respectively
• Bar chart at the bottom
  represents trading volume, and the significantly increased volume confirms the heat of market speculation
• The annotation on the right side of the chart indicates the time when the company issued the risk warning announcement

It can be clearly seen from the chart that the stock price experienced irrational rapid rises without fundamental support, and this speculation will eventually end with valuation regression.