Wen 丨 node finance, author 丨 three lives
To say that spanning 2021 and 2022, the concept is still very hot, the metacosm must be counted as one. Not only are the Internet giants layout, listed companies are eager, but also written into the industrial planning by many local governments, and there is a momentum to continue to burn in 2022.
Many institutions also have great respect for the concept of meta-universe, such as China Merchants Securities recently strongly promoted the concept of meta-universe in the research report, believing that meta-universe is the next generation of the Internet, and listed several A-share companies as meta-universe leaders, Visual China (000681. SZ) is among them.
Since the meta-universe concept strengthened, Visual China's stock price has risen with the tide. In August last year, it was still about 10 yuan, and by the close of trading on January 17, the company's stock price had reached 26.29 yuan / share, which more than doubled in half a year. So, can Visual China really be reborn with the concept of metaverse? Let's make a detailed analysis from the perspective of the fundamentals of Visual China, the opportunities and risks of the metacosm, and the attitude of the capital market.
01. After rectification, the opportunity to turn around has come?
When it comes to Visual China, the two rectifications in 2019 are definitely impossible to get around, and it can be said that before and after this, Visual China is completely different.
Prior to this, Visual China was regarded as the only leader in scarce visual materials and had great potential for development. In terms of performance, in the years before 2019, the company's performance grew steadily, and revenue and net profit growth remained above double digits. Reflected in the stock price, Visual China is also in an upward channel.
Everything seemed to be moving in a good direction until April 10, 2019, when the first photo of a black hole in human history was released.
At that time, Visual China posted this photo that had been declared free by the copyright owner on its official website, and indicated that if the picture was used for commercial purposes, it needed to contact Visual China, which triggered a public opinion crisis. Subsequently, the company's other "riot operations" were pulled out, resulting in interviews and the closure of the website for rectification.
A month later, the official website resumed operations, when the stock price fell from 28 yuan to about 16 yuan in one go, and the market value evaporated by 8 billion. In December 2019, Visual China was named by the Cyberspace Administration of China again, and the website was closed again for rectification.
Under these two blows, Visual China's stock price can be said to be a slump, and in terms of performance, in 2019 and 2020, the company's total revenue was 722 million yuan and 570 million yuan, down 26.9% and 21%, and the net profit was 219 million yuan and 142 million yuan, down 31.81% and 35.39% respectively.
After entering 2021, the company's performance growth began to rebound. In the first three quarters of 2021, the revenue reached 524 million yuan, an increase of 18.64% year-on-year, and the net profit was 151 million yuan, an increase of 23.53% year-on-year.
Although it is still much worse than the peak of 2018, it is good that the market has seen the hope of a reversal of the predicament. However, it is still difficult to get investors back just by relying on the performance of traditional businesses to recover.
There are two reasons, one is that with the development of the Internet, the dividends of the entire large industry are weakening, visual China in the loss of two years of rapid development at the same time, with the market maturity increased, competition intensified, money has not been so good to earn.
This can be seen in the changes in the company's gross and net profit margins. In 2017 and 2018, visual China's net profit margin was 38.37% and 33.94% respectively, which can be said to be a huge profit. But in the more than two years after the rectification, the company's net profit margin hovered around 30% or even lower.
In addition to the changes in the Internet industry itself, the second point cannot be ignored, that is, is the "sword of Damocles" really safe for content rectification?
After two rectifications, at present, Visual China should have landed safely in terms of standardization. However, for investors, "once bitten by a snake, ten years afraid of the well rope", especially after experiencing the impact of the policy level on the capital market in 2021, the hidden uncertainties are always a heart disease.
Therefore, how to find a more imaginative development direction on the basis of maintaining the security of visual content has become the key to visual China regaining market confidence.
The arrival of the metaverse seems to be in line with the expectations of Visual China.
02, under the outlet of the meta-universe, it is time to re-evaluate
2021 is known as the "first year of the metaverse", and after half a year of information bombardment, the concept of the metaverse has been accepted by many people. In the eyes of many Internet giants and investment institutions, metacosm has become synonymous with the next generation of Internet.
Zuckerberg's change of the company name from "FACEBOOK" to "META" is certainly not a whim of brain fever. Domestic Internet giants such as Tencent invested in the "first stock of the meta-universe" Roblox, and ByteDance invested 5 billion yuan to acquire VR startup Pico, which is also targeted.
However, as to what the form of the metaverse will look like, there is no unification in the industry at present. The idealized view is that the metacosm is a highly networked virtual reality, in a well-established networked world, people can achieve the same as the physical world, fully realize the full range of personal and social needs such as identity, currency trading, community affiliation and even career development.
In contrast, the description of the metacosm in the Guohai Securities Research Report is easier to understand, that is, the metacosm is a collection of new generation Internet application scenarios that bring better experience through new hardware (such as VR and AR devices) and new interaction modes.
In fact, it is precisely because the metaverse has not yet had a unified appearance, so at this stage, it is the time when the imagination space is the largest. Reflecting on the capital market, it is the chicken dog ascending to heaven, the bubble is maximized, as long as it is rubbed on the hot spot of "meta-universe", it is easy to bring about a sharp rise in stock prices.
But whatever form the metaverse eventually takes, one thing is almost certain, and that's that it will need more and better visualization material, which is the foundation of everything.
Therefore, the manufacturers of VR and AR are generally optimistic, and Visual China, as the leader of scarce visual materials, is also regarded by many investors as "water sellers", which suddenly opens up new space.
Whether gold diggers can dig up gold mines is not easy to say, selling water can always make a fortune.
On December 26 last year, Visual China's visual art digital collection platform "Yuan visual" was officially launched, and hope project's famous publicity photo "I want to go to school" was priced at 199 yuan, limited to 10,000 copies, and sold out in 40 minutes.
Image source: Screenshot of Visual China's official website
The concept behind this platform is the indispensable NFT (Non-Fungible Tokens) in the metaverse.
What is an NFT? Simply put, it is a unique digital asset in the digital world. For example, a photo, an audio or even a piece of land in a game, after being made into an NFT through blockchain technology, it means that you have the ownership and actual asset use rights of the NFT.
Last March, an NFT digital painting created by artist Beeple was sold by Christie's auction house for more than $69 million, causing a sensation around the world.
It can be said that NFTs are one of the infrastructures of the metaverse, and pictures are the easiest materials to make NFTs. Visual China launched "Meta-Vision", which is the opportunity of NFT, which is also the most abundant and easiest piece of Visual China's resources to monetize.
In fact, not only visual China, because of the meta-universe and the NFT fire, Alipay launched the NFT art collection mini program "Ant Chain Fan Grain", Tencent launched the NFT trading platform "Phantom Core"... Various Internet giants are also moving.
There is no doubt that the metacosm and NFT are an opportunity for visual China, which has a wealth of visual material, to revaluate. The capital market also doubled the stock price in half a year to convey this message, and a simple performance reversal is unlikely to bring such a rapid performance.
Compared with some companies that are purely rubbing wind outlets, Visual China does have its own advantageous resources. However, there is a law that cannot be ignored, and when big technological changes come, there are opportunities for more risk. From the perspective of deeper development logic, the metaverse and NFTs may bring no small challenges to visual China.
Why? Let's look down.
03, the classical Internet or into the past, the test of the times is coming
At present, most players in the metaverse and NFT have basically grown up under the influence of blockchain technology, and in the concept of these people, the Internet before the blockchain has a synonym, called "classical Internet".
Visual China is undoubtedly one of the representatives of the classical Internet.
So, in the historical tide of Internet development, have you ever seen any websites or products that can cross the PC Internet and mobile Internet, and until now they are still standing at the forefront of the trend and developing rapidly? Almost nothing. From the three major portals to BAT, the Internet giants have always been worried in their hearts, in fact, from the ruthless changes of this technological change.
For Visual China, because it has long been doing "selling water" business, from pc Internet to mobile Internet, it is actually in a gradual upward trend. Even after a series of hammers in 2019, the gross profit margin is still maintained at more than 60%, and it is still very moist.
However, if the metaverse, NFT and blockchain do become the mainstream form of the next generation of the Internet, it may shake the foundation of the "selling water" business.
From the perspective of business model, Visual China is actually the copyright of hundreds of thousands of photographers or content creators, centralized acquisition into their own hands, and then packaged and sold. This business model is very traditional and has been prosperous for a long time, because between the producer and the demand terminal, there is always a need for a middleman.
However, the emergence of third-generation Internet technologies such as blockchain, NFTs and metacosm may break this pattern.
Taking Opensea, the largest traffic platform in NFT, as an example, content creators can directly publish their works on the chain, price and sell them, and ensure that the copyright is unique. Those who demand it, whether it is for collection or application to various program products, can directly pay for it.
In the process, the copyright of all digital products such as pictures and videos on the Internet has been reconstructed, and Opensea as a platform earns only a fee, not a royalty fee. The latter is precisely the lifeblood of traditional digital product copyright aggregation platforms such as Visual China.
Of course, at present, the landing of blockchain technology has just started, and the NFT and metacosm are in a very early stage, leaving time for Visual China to prepare, which is still very sufficient.
Image source: Flush
In the eyes of many investment institutions that pay attention to Visual China, its most "sexy" place is also concentrated in the imagination brought by the metaverse.
From the current valuation point of view, as of the close of trading on January 17, visual China's dynamic PE is about 91 times. If you look at it from the perspective of Internet growth stocks, this valuation is not too high, after all, many consumer stocks can reach this level at one time when they are hotly speculated.
In the capital market, after the concept of a level like the metacosm appears, it often has to go through a bubble period of hype at the beginning, and then the application lands and the performance is realized. At present, the concept of metaversity is still in its first stage, the market is restless, and the revaluation has been initiated.
Visual China is very frank in stressing that it is currently impossible to predict the extent of the impact of the meta-visual platform on business performance. However, this does not prevent the company from being included in one of the leading names in the metaverse concept. At present, the meta-universe is undoubtedly the best opportunity for Visual China to turn around, opportunities and risks coexist, and it is difficult to make up a conclusion about what will happen in the future, but the initiative is still in the hands of the company itself.
The future has come, and the box of the metacosm has been opened.