In the past 2021, the concept of "metaverse" has been hyped in full swing, becoming the concept "top stream" in one fell swoop and standing on the cusp.
At the same time, many technology giants are competing to grab this "admission ticket" and quickly label the layout of the meta-universe, and the entertainment industry and the media are paying close attention to this concept. Therefore, there is such a phenomenon: technology companies want to bundle the concept of metaversmonics, stars hold concerts in metaverses, Zhou Dong buys "Phanta Bear" on the meta-universe platform Ezek, Lin Junjie buys land in the meta-universe, and major news media publish articles about the meta-universe...
Everyone is watching: which company will successfully take the title of "the first share in the domestic meta-universe"?
Just two weeks ago, Beijing Flowing Cloud Technology Ltd (hereinafter referred to as "Feitian Cloud" ) submitted a form to the Hong Kong Stock Exchange for listing on its main board. The flying clouds have thus been pinned on the high hope of becoming the "first force in the domestic meta-universe".
Source: Feitian Yundong official website
They are all talking about the metacosm, so how did the wind blow in the metacosm? Can the flying clouds, which have high hopes, soar into the sky with the blessing of the meta-universe?
Metaversity's "Past and Present Lives"
The metaverse is not a new concept for the past two years, as early as 1992, Neal Stephenson proposed the concepts of "Metaverse" and "Avatar" in his science fiction novel "Snow Crash". People can have their own virtual avatars in the "Metaverse", and this virtual world that is closely connected to reality is called the "metaverse".
But at the time, the metaverse didn't get much attention because of the gap between technology and the concept of the metaverse.
In 2020, the epidemic accelerated the development of new technologies and accelerated the formation of contactless cultures, which led to the critical point of virtualization in human society.
And then it is 2021, which is known as the "metaverse year", when the concept of the metacosm really explodes. We may wish to follow the timeline to see why the metaverse is "exploding" in 2021.
Source: Google Search Index
According to Google search statistics, there are two things worth paying attention to last year's change in the global search popularity of "Metaverse".
The first is that in April and May 2021, the index that has been silent suddenly rose. This change is actually due to the listing of "online Lego game" Roblox on the New York Stock Exchange DPO (Direct Public offering) and officially throwing out the concept of "metacosmity" in the prospectus. Through this wave of concept speculation, the metacosmity is really into the public eye, and Roblox has also become the world's "first stock in the metacosm" with a market value of nearly $40 billion on the day of listing.
But if you stretch the timeline, the heat of April and May is compared to the heat after October. Why did the "metacosm" completely "explode" in October? This time it was because Facebook changed its name to "Meta" and announced its official entry into the metacosm, throwing out an estimated $100 billion meta-universe investment plan. As soon as Facebook struck, followed by Microsoft, Google, Nike, Nvidia, GREE and other foreign manufacturers have entered the game. Of course, domestic technology giants Tencent, Huawei, ByteDance, etc. are also following the trend.
At this point, the approximate timeline related to the metaverse has been sorted out.
The prospectus contains a very high amount of "yuan",
Cut into the metaverse track with AR/VR
Similar to Luo Yonghao's official announcement of entering the AR/VR/MR field before mentioning the concept of "meta-universe" many times, the main business in the field of AR/VR services is flying in the sky, and when sprinting hong Kong stock IPOs, he did not forget to bring the meta-universe concept, not only bluntly saying that he wanted to build his own meta-universe platform, but also mentioned the "meta-universe" 256 times in the prospectus:
In the introduction of "Our Mission", the company said that it would break the dimensional barriers between the real world and the virtual world with AR/VR technology, and empower customers to achieve digital upgrades and business replenishment, "We are determined to help each customer enter the metaverse, connect with each other, and realize the commercialization of digital value in the metaverse era, so as to build our own metaverse platform."
Although the company's prospectus uses "meta-universe" as the core selling point, the "Feitian Meta-universe" platform, which is the cornerstone of the company's meta-universe, was actually established in November 2021, less than 3 months ago. However, some insiders told reporters that as a company that started from a game, Feitian Yundong will have a certain potential energy advantage in building a meta-universe platform. "Game + marketing is the strength of Feiyundong, and if it can be well combined, it will have unexpected effects."
And how does Feitian Yundong hook up the company's business with the meta-universe? Its explanation says that AR/VR is an important application to realize and empower the immersive metaverse experience, and is a prerequisite and barrier to entry in the development of the metaverse.
At present, the company is mainly active in scene application and the underlying technology layer by providing AR/VR content and services and AR/VR technology. The company has created a full-service business that provides AR/VR related services, mainly including (1) AR/VR services, (2) AR/VR content, (3) AR/VR SaaS, and (4) IP services.
In short, the main business of Feitian Yundong is to produce and deliver advertising and other marketing content for customers in VR, AR and other scenarios.
AR/VR services are the "I develop and help you use" model, that is, the company cooperates with media platforms and their agents to provide customer service solutions, including serving AR/VR interactive content ads. Customers are ultimately charged for the results of the service, such as marketing performance.
AR/VR content is a "I develop, you use" model, that is, the company develops AR/VR content according to the customer's requirements, and the customer applies this to its business and provides it to end users. Companies typically charge customers a one-time fee when offering content offerings.
AR/VR SaaS is a "you develop what you use" model, that is, the company's AR/VR SaaS platform empowers customers to generate, publish and leverage relevant AR/VR content themselves. The Company charges customers a fee for ordering SaaS products or developing custom SaaS solutions. It is worth noting that in 2020, Feitian Yundong also became a partner of Tencent, and its AR/VR SaaS platform became the only AR/VR product supplier selected for Tencent's Qianfan plan.
IP business is the company to grant IP rights to customers, so that customers can develop games, animation, TV series, movies and other works. However, in this business, the company's main focus is on using IP resources to support AR/VR services, and granting IP rights according to individual situations to meet specific customer needs.
According to the revenue of each business, the main revenue sources of Feitian Cloud Are concentrated in ar/VR services and content businesses. And, from the perspective of financial indicators, from 2018 to 2021, these two businesses have developed by leaps and bounds. From 75.15 million yuan in 2018, accounting for 45.8% of revenue, it jumped to 256.45 million yuan in 2020, accounting for 75.8% of revenue. In the first six months of 2021, the revenue share even climbed to 91.4%, and the revenue from AR/VR services in the first six months exceeded the revenue in this business in the whole of 2020.
Source: Prospectus
According to iResearch, the company ranks first in China's AR/VR content and services market by revenue, accounting for 2.3% of the market share in 2020.
It is worth noting that compared with the VR/AR market, which is not a big market at present, the "VR/AR content service" market is even smaller. The size of this market will be about 11.5 billion yuan in 2020, and it will only be 21.1 billion yuan after a round of rapid growth in 2021.
At the same time, the prospectus also revealed that there are more than 5,000 competitors in this field. Even if Feitian Yundong sits in the top position in the industry, it accounts for less than 3%, which also means that the industry is still in the early stage of development, and the market share advantage of Feitian Yundong is not obvious.
The game "started" and successfully transformed
The story of the flying clouds actually dates back to 2008. In March of that year, Yang Xuekai, Guo Xiaofeng and Song Pengpeng jointly funded the establishment of Pocket Feitian Technology to engage in game-related business, which is the predecessor of Feitian Yundong.
In 2009, the company's main shareholders, Wang Lei and Li Yanhao, signed a share transfer agreement with the three people to acquire all of their shares. In the same year, Wang Lei officially left palm fun technology and joined palm feitian technology as general manager. The prospectus shows that Wang Lei is now the largest shareholder of Feitian Yundong.
According to media reports, in 2017, Du Haitao, the host of Hunan Satellite TV, also participated in the investment of Palm Feitian, with a shareholding ratio of 8.6%, becoming the third largest shareholder of the company in one fell swoop. However, as The Palm Flying Sky continued to increase its capital, Du Haitao's shareholding ratio gradually declined, and in August 2021, Du Haitao transferred and sold his shares for 1.8393 million yuan.
Wang Lei, born in 1982, has both a gamer and an advertiser. Since graduating from the North China University of Technology in July 2005 with a major in automation, he has worked in information technology and game development in Palm World Wide And Palm Fun Technology. Under his helm, the company has independently developed a number of stand-alone mobile games, including "God of Drag Racing", "Alice in Wonderland", "Battlefield Gun God" and so on.
In 2015, vr rose in China, Wang Lei seized the opportunity to start to do related accumulation, in 2017 he decided to shift the company's focus to AR/VR content and services.
At the time, the business related to the new technology of AR/VR was extremely expensive. Therefore, Wang Lei began to expand the company's financing channels. In 2017, Palm Feitian Technology applied for listing on the New Third Board, and on July 14 of the same year, the company successfully landed on the capital market.
Since then, the Handheld Feitian Technology business has ushered in the take-off phase, and the company has launched its first AR/VR SaaS platform. Public data show that in 2018, the company achieved revenue of 170 million yuan, an increase of 114.43% over the same period; net profit attributable to shareholders of listed companies was 43.5412 million yuan, an increase of 129.18% over the same period.
However, just when Feitian Technology in the palm of his hand was in the ascendant stage of development, Wang Lei made an unexpected decision: to withdraw from the new third board. He explains in the prospectus: "In order to implement our future business strategy, we are looking to enter the capital markets with a wider investor base on other stock exchanges. ”
On August 27, 2019, the shares of Pocket Feitian Technology were officially delisted from the New Third Board. In the following years, the company's SaaS platform was further iterated, and the VR panoramic store project was launched, covering multiple industries. In addition, the company should reach a strategic cooperation with Baidu VR and become the core supplier of JD VR.
The next story is obvious, the 2021 "meta-universe" concept explosion has brought great opportunities for the company, so that the company that has been deeply involved in AR/VR for many years has received a lot of market attention.
On November 30, 2021, Pocket Feitian Technology officially established the new business "Feitian Yundong" with the theme of meta-universe; on December 2, Feitian announced that it entered the "meta-universe" field and changed its name to "Feitian Yundong"; on December 28, the company officially submitted a prospectus to the Hong Kong Stock Exchange.
Under the leadership of CEO Wang Lei, the company not only completed the transformation, but also successfully grasped the explosive concept of "meta-universe" and tried to knock on the door of the IPO.
Does it stand the "first share" test?
From the perspective of the company's revenue, from 2018 to 2020, Feitian Yundong's revenue was 164 million yuan, 251 million yuan and 339 million yuan respectively, with an annual compound growth rate of 43.76%. Revenue in the first six months of 2020 and the same period in 2021 was RMB121 million and RMB278 million, respectively, more than doubling.
If you only look at the change in consolidated gross margin, the main change is that 41.7% in 2018 decreased to 30% in 2019.
Through further analysis, the gross margins of the company's main businesses – AR/VR services, AR/VR content, and AR/VR SaaS – all showed a slight upward trend overall. As a result, the significant decline in consolidated gross margin was primarily due to changes in gross margins in IP and other businesses.
The decline in gross margins in these two businesses was explained by the Company, respectively: the gradual decrease in the gross margin of the IP business was mainly due to our plan to use IP resources to promote the future development of the AR/VR business and retain high-quality IP rights for our own use; the decline in the gross profit margin of other businesses was due to the higher gross margin of the games and game-related businesses that we ended in 2019.
While considering the relative variation, we also need to pay attention to the size of its absolute value. In fact, the gross profit margin of Feitian Cloud Is not low. Among them, the gross profit margin of the AR/VR SaaS business is the highest, reaching more than 50%, followed by AR/VR content, and the gross profit margin is maintained at 47%.
However, in the face of increasingly fierce competition in the industry, Feitian Yundong's investment in research and development is not ideal. From 2018 to 2020 and the first half of 2021, the company's R&D investment was 7.58 million, 11.425 million yuan and 15.046 million yuan, respectively, and the R&D investment in the first half of 2021 was 9.012 million yuan, accounting for 4.6%, 4.6%, 4.4% and 3.2% of the current revenue, respectively.
For Feitianyun, whose main business is based on "money-burning" technologies such as AR/VR, whether the annual R&D investment of about 4% can support its company's competitive advantage still needs to be marked with a question mark.
An investor once said, "Just from the perspective of building a metacosm, this itself is an investment behavior of billions or even tens of billions, so it is difficult to create a real metacosm without sufficient investment." This is also an important reason why despite the current concept boom, long-term funds are still only optimistic about the giants.
The metaverse concept did bring a lot of tech companies to fire last year, but in fact, after the hustle and bustle, it is often a chicken feather, it is difficult to live on the concept, and it seems that it will be more reliable to cultivate the core advantages of technology. Today, some meta-universe concept stocks have also shown a downward trend – Choice data shows that the stock prices of 22 meta-universe concept stocks have fallen in 2021.
As the People's Daily commented on the metacosm not long ago: "Although the metacosm seems to have a vast space and multiple possibilities, it is still a new thing that has not yet taken shape." Everyone still needs to look rationally at the current meta-universe boom and be wary of any flicker in the name of technology and the future. Is it the future that can be touched, whether it is capital speculation or a new track, whether it is a new bottle of old wine or a new breakthrough in science and technology. Think twice about the risk of heat getting burned. ”
Therefore, while chasing the concept of "metaverse", if it is necessary to form a closed metacosm of the commercial system, the landing and application of new technologies is crucial and a basic condition.
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