On April 29, 2022, Visual China (000681) announced that Zhongyuan Securities, CITIC Prudential Fund, China Overseas Fund, Yunxi Fund, Industrial Securities, New Era Securities, Tianhong Fund, Shenwan Hongyuan, Shanghai Mingyu Asset Management, Shanxi Securities, Ouqing Investment, Nanjing Securities, Jianshun Investment, Huachuang Securities, Hongta Laterite Fund, Guotai Junan Securities, Guorong Fund, Guangdong Hengsheng Fund, Soochow Securities, IGWT Investment, BOC International Securities, Zhongtian Guofu Securities, Galaxy Securities, AIA Life, Schmidt Fund, Xiniu Investment, Tianfeng Securities, Shanghai Shenzhen Asset Management, Shanghai Jiuge Investment, Sumitomo Mitsui Asset Management, ABC Life Insurance, Regen Fund, Harvest Fund, Huabao Fund, Haitong Securities, Guotai Junan International, Guolian Securities, Everbright Securities, Caixin Securities, CITIC Construction Investment Securities, Zhongtai Securities, PICC Asset Management, Galaxy Fund, Xingtai Investment, Southwest Securities, Taikang Assets, Shanghai Botong Investment, Shanghai Calm Investment, Qingshuiyuan Investment, ABC Huili Fund, Kaiyuan Securities, Huaxin Securities, Huaan Securities, Guoyuan Securities, Guoshou Security Fund, Guohai Securities, Dongxing Securities, Caitong Fund, CITIC Industrial Fund, CICC, Changjiang Pension Insurance, Yimi Fund, Cinda Securities, Western Profits Fund, Qianhai Shengyao Capital, Shanghai Niefeng Investment, Shanghai Chunda Asset Management, Park Xin Investment, Ningyin Wealth Management, BOCOM Schroder Fund, Huatai Securities, Laterite Innovation Fund, Guosen Securities, Guosheng Securities, GF Securities, Dongxing Fund, Polymer Capital surveyed our company on April 28, 2022.
The main contents of this survey are:
Q: How will the pandemic affect the company's business lines?
A: Both at home and abroad have been affected by the epidemic to varying degrees. Overseas business declined significantly last year and is already recovering, and is expected to see an improvement in the second half of the year. Many customers such as domestic business commercial advertising companies are located in East China, and the marketing activities and advertising delivery have been greatly affected in the first quarter of 2022; the operating rate of small and medium-sized enterprises has also been affected; media customers have been less affected and have a certain growth; and one of the important businesses of the company's "visual +" strategy, the custom shooting business, has also been impacted due to restrictions on personnel travel and venues. The epidemic is an uncontrollable factor, in this case, the company can only do a good job of itself, during this period to do a good job in organizational optimization and technological change, and has also achieved certain results.
Q: Please tell us more about your overseas business and its subsequent development?
A: Overseas business will continue to be affected in 2021, the decline is relatively large, it is not expected to decline further this year, and even have some room for improvement.
Q: What is the company's follow-up development plan for audio and video business?
A: Despite the impact of the epidemic, the revenue growth of the audio and video business last year was still close to 150%, and the growth trend is certain. Graphics and text transmission is more efficient and will not be replaced, but will be taken away by video, and the company believes that graphics and video will coexist for a long time. On the one hand, the company will expand the amount of audio and video materials and the number of signed video contributors on the supply side, because the picture creators and video creators have a lot of intersection, and the company has a large advantage in the field of pictures, and the current audio and video material supply field company is still one of the largest digital platforms in terms of material volume and number of contributors. On the other hand, the video business still has some challenges, such as higher production, storage costs, more difficult search, etc., the need for more investment, in the face of this problem, the company strategically invested in the domestic excellent video material platform Optical Factory Creative (VJshi), and in the content, technology in-depth cooperation, cost sharing, coordinated development. In terms of content, last year, the company had about 300,000-400,000 pieces of material connected to the Optical Factory Creative (VJshi) platform, and this year plans to achieve 2 million pieces; in terms of back-end operation, the two sides jointly built a "Visual China Video Business Center", and the operating costs such as storage, review, and search technology improvement can be shared. Last year VJshi earned 110 million yuan last year, an increase of more than 70%. VJshi's main customer group, small and medium-sized enterprise customers, which are highly price sensitive, were still affected by the epidemic in the first quarter of 2022, and the revenue growth rate has declined to a certain extent, but it has still maintained rapid growth. The audio and video business is still a key development strategy in our business segment.
Q: How are the company's mid- and long-tail customers developed? Revenue as a percentage? How is the volume growing?
A: On the one hand, Takuko, which is a medium- and long-tail customer, introduces traffic through digital marketing, content marketing, new media marketing, etc., develops package products that meet users' needs, and improves user experience and customer acquisition. On the other hand, alliance marketing or channel marketing, such as our joint construction of the "Government-Enterprise Enterprise Material Library" with the Jiangsu National Copyright Trade Base, and the joint launch of the "SME Genuine Support Activity" with the China Association of Small and Medium-sized Enterprises, are through third-party channels, more quickly and efficiently find small and medium-sized enterprise customers, and transform the unauthorized use of pictures into better, more direct, faster and more willing to accept services for small and medium-sized enterprises. At present, the proportion of SME customer income of overseas listed companies in the same industry can reach 40%-45%, while the company's long-tail customer income accounts for less than 10%, and the growth potential is very large.
Q: Custom shooting is in high demand, can you introduce the future development and gross profit margin of this business?
A: Custom shooting is an important value-added service business in the company's "Visual +" strategy, which is mainly driven by KA customers and the demand is growing rapidly. There are currently tens of millions of orders in hand. Custom shooting business requires producers to do planning, organizing personnel and venues to shoot, there will also be press conferences and other promotional activities, is the overall solution, these activities will almost all be because of the epidemic prohibition of gathering restrictions, if the epidemic is alleviated in the future, it is expected that there will be better growth. The gross profit margin of this business is about 20% on average, which may vary depending on the company's participation level, and may also increase due to the increase in the depth of participation.
Q: What is the reason for the decline in the company's gross profit margin in 2021?
A: The main reason is that overseas income has declined due to the impact of the epidemic. Most of the company's overseas business is its own copyright content, the gross profit margin is very high, and the decline in its revenue will cause the company's overall gross profit margin to decrease. The second is that the revenue growth of the company's custom shooting business last year was faster than that of the traditional material business, while the gross profit margin of custom shooting was relatively low.
Q: The number of employees in the company has increased, sales expenses have increased in the first quarter of 2022, and what businesses will the new employees mainly serve?
A: The number of employees is an overall increase, the company's main business is visual content copyright licensing, but also carried out customized shooting business, digital asset management system and digital art business launched at the end of last year. As a result, marketers and inputs have increased accordingly. In the future, the company will also make relevant adjustments according to business development and changes in the general environment, including organizational structure and fine management of expenses.
Q: Will the company's stock option incentive plan be adjusted in the future?
A: The assessment indicators of the company's 2021 stock option incentive plan have not been met, and there is still uncertainty about achieving the assessment target this year from the first quarter of 2022. The company will dynamically adjust and announce in a timely manner according to business development, epidemic situation and general environment.
Q: Please introduce the situation of the meta-vision platform, the follow-up commercialization rhythm and the construction of overseas platforms?
A: From its launch on December 26, 2021 to the end of the first quarter of 2022, the company's digital art trading platform, Yuan Visual, has established cooperation with more than 41 artists and copyright IP cooperation institutions, and has sold 126 original digital art works, with cumulative sales of more than 10 million yuan. The company's "blockchain +" strategy has initially landed, and the toC business has achieved initial results. The meta-vision platform is currently in its early stages, and the company has adopted a relatively cautious attitude, using the first independent and controllable alliance chain Chang'an Chain in China, and has not opened secondary transactions, and is currently developing app. Under the premise of legal compliance and regulatory policies, the meta-vision platform will strive to solve the pain points of the digital copyright industry, focus on the function of digital property rights certification, fulfill the main responsibility of the platform, supervise the whole process of digital art transactions, and ensure that digital artworks can be traded in an orderly manner in accordance with the law. In 2022, the company also plans to build a digital art trading platform "Vaultby500px" in the 500px international version, actively build a community and trading platform serving global creators, realize the global and credible circulation of digital artworks, and disseminate Chinese excellent culture to the world and promote international cultural exchanges.
Q: How can companies maintain a competitive edge in the digital art business?
A: The company has accumulated rich experience in the field of digital copyright for more than 20 years, and has significant advantages in content, platform, copyright protection and other aspects. In terms of content, the company acquired the assets of Corbis, a world-renowned photo library founded by Bill Gates, in 2018, acquired and operated the world's leading photographer community 500px located in Canada, and currently serves content creators and media publishers, brand enterprises, creative agencies and other customers in more than 195 countries around the world, and has established close cooperation with nearly 300 professional copyright content institutions at home and abroad such as GettyImages. On the platform, the company has rich experience in product selection, technology development and operation. In terms of copyright protection, the company is very professional in various dimensions such as rights confirmation, copyright protection, and power removal. In addition, after the completion of the overseas platform, it will also form the characteristics of the company's domestic and overseas dual digital art platforms. The company will continue to play its own characteristics and use its own content, platform and copyright protection advantages to operate a digital art trading platform. At the same time, the company also attaches great importance to the development of its own content, such as Corbis assets, and will pay more attention to the development of its own IP digital artworks in the future, and only by continuously improving its selection capabilities, open capabilities and operational capabilities can it continue to enlarge and revitalize assets. In addition, the company's business model development is roughly the same at home and abroad, and the core is to build a creator ecological economy of continuous innovation around the upstream creators. The company will be committed to providing creators with more services and monetization opportunities to promote a more active creator economy.
Visual China's main business: intelligent control of human-computer interaction software technology development; Technology development and system integration of mechatronics, dynamic simulation, mechanical structures and multimedia products; Animation design; Technology development and sales of computer hardware and software.
Visual China's 2022 first quarterly report shows that the company's main revenue was 155 million yuan, up 11.79% year-on-year; net profit attributable to the mother was 30.5124 million yuan, down 26.48% year-on-year; deducting non-net profit of 30.3861 million yuan, down 15.82% year-on-year; among them, in the first quarter of 2022, the company's single-quarter main revenue was 155 million yuan, up 11.79% year-on-year; single-quarter net profit attributable to the mother was 30.5124 million yuan, down 26.48% year-on-year. In a single quarter, the non-net profit was 30.3861 million yuan, down 15.82% year-on-year; the debt ratio was 16.51%, the investment income was 9.4954 million yuan, the financial expenses were 2.4355 million yuan, and the gross profit margin was 60.83%.
The stock has been rated by 5 institutions and 5 by buy ratings in the last 90 days; the average target price for institutions in the past 90 days has been 14.5.
Here is detailed profit forecast information:
Margin data shows that the stock's net inflow of financing in the past three months was 44.0312 million, and the financing balance increased; the net outflow of margin was 282,700, and the margin balance decreased. The Securities Star Valuation Analysis Tool shows that Visual China (000681) has a good company rating of 3 stars, a good price rating of 2 stars, and a comprehensive valuation rating of 2.5 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)
The above content is compiled by Securities Star based on public information, if you have any questions, please contact us.
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