China's "first stock of the influencer economy," Inmyshow Digital Technology (Group) Co., Ltd. (600556.SH), is facing its toughest moment since going public. According to its performance forecast, the company expects a net loss attributable to shareholders of 50 million to 70 million yuan for the first half of this year, compared with a profit of 36.3792 million yuan in the same period last year. After deducting non-recurring gains and losses, the net loss is projected to be between 55 million and 75 million yuan. This marks the first interim loss since Inmyshow completed its backdoor listing in 2020.

What is more alarming is the pace of the losses. The company still posted a profit of 3.224 million yuan in the first quarter of this year, which implies a second-quarter net loss attributable to shareholders of 53.22 million to 73.22 million yuan, a year-on-year drop of more than 330%. The net loss after deducting non-recurring items fell by over 400% year-on-year, setting a new record for a single-quarter loss since its backdoor listing. The concentration of losses in the second quarter signals that the company's operational pressures are still accelerating.

Both volume and price are declining in its main business, with gross margins falling year after year. Inmyshow's troubles are not a sudden development. The company's profitability peaked in 2021, when its net profit after deducting non-recurring items reached 420 million yuan. Since then, it has declined annually, with 2025 marking its first annual loss, as that figure dropped to -15.61 million yuan. In just four years, profits have plunged from 420 million yuan into a loss-making abyss.

Behind this is a systemic weakening of its core business. Over 90% of Inmyshow's revenue comes from its influencer marketing platform business, which matches advertisers with influencers and charges service fees. However, this business is caught in a "price and volume downturn": in 2021, revenue was 4.29 billion yuan with a gross margin of 22.25%, but by 2025, revenue had fallen to 3.7 billion yuan with a gross margin of only 17.77%. As a result, the company's overall revenue dropped from 4.512 billion yuan to 3.904 billion yuan, and its gross margin fell from 22.28% to 18.95%.

The broader industry environment is equally challenging. From 2023 to 2025, the growth rate of China's internet advertising market size was 7.6%, 6.1%, and 4.6%, respectively, showing a continuous slowdown. With advertisers tightening budgets and intensifying competition, Inmyshow, as an intermediary platform, is bearing the brunt of the impact.

While revenue is shrinking, expenses are rising against the trend. As revenue and gross margins both declined, Inmyshow's period expenses grew instead, becoming another factor eroding profits. From 2021 to 2025, its selling, administrative, and financial expenses all rose rather than fell. Administrative expenses, in particular, increased from 155 million yuan to 239 million yuan, a surge of 54.15%. In 2025, total period expenses reached 616 million yuan, up 12% from 2021. The rigidity of expenses contrasts sharply with shrinking revenue, directly causing the net profit margin to collapse. In 2025, the company's net profit margin was only 0.63%, a record low since listing, and it further slipped to 0.13% in the first quarter of this year.

The company's transformation has been slow, its overseas expansion has stalled, and its Hong Kong IPO has lapsed. Despite the weakness in its main business, Inmyshow has made attempts to break through. It has launched innovative ventures such as the IMSOCIAL accelerator, the Krau platform, influencer vocational education, the West Fifth Street project, the Hong Universe metaverse, and the AIGC product "Inspiration Island." However, these new businesses have grown slowly. In 2025, although revenue from the influencer economy ecosystem innovation segment surged by 102.26% year-on-year, it still accounted for only 5.22% of the total, far from enough to turn the tide.

With the domestic market reaching its peak, overseas expansion was seen as a hope. In 2025, the company set up international offices in Hong Kong, Tokyo, Singapore, and Kuala Lumpur, and its Japanese subsidiary obtained qualification as a cross-border marketing agency for Xiaohongshu. Yet, in 2025, overseas revenue accounted for just 0.92% of the total, almost negligible.

More symbolic is the setback of its Hong Kong IPO. To advance its globalization strategy, Inmyshow formally submitted a listing application to the Hong Kong Stock Exchange in January this year. However, its prospectus lapsed on July 5, and the company has not commented. The window for capital markets has quietly closed.

Under multiple pressures, Inmyshow has proposed improvement measures such as enhancing quality and efficiency, refined operations, and deepening customer cooperation. However, given the slowing main business, rigid expenses, sluggish transformation, and obstacles in overseas expansion, the "first stock of the influencer economy" still has a long and arduous road ahead to reverse its predicament.