Under the boom track, a fast-growing enterprise with newly signed orders

Today we will talk about the highlights and changes of Alto Electronics.

1. Market demand gradually picked up, and new contracts signed in the third quarter grew rapidly

As of June 30, 2023, the company has a total of approximately 403 million yuan in orders in hand and winning bids.

As of October 26, 2023, the company has a total of approximately 549 million yuan in orders in hand and winning bids.

In the third quarter, the company signed new contracts of 325 million yuan, an increase of 20.71% year-on-year, an increase of 56.12% month-on-month, and the amount of new contracts signed in the third quarter was close to the sum of the new contract amount in the first half of the year. From the perspective of subdivisions:

1) There has been a significant increase in new contracts signed in the film and television sector

The company's film and television shooting solutions are mainly used in three major fields: XR virtual shooting, TV studios and LED cinemas.

In the whole year of 2022, in the field of film and television, the company signed new orders with an amount of 164 million yuan, and undertook a total of 23 medium and large-scale XR virtual studio projects.

From January to September 2023, in the film and television field, the company signed 167 million yuan of new contracts in the first three quarters, a year-on-year increase of 73.75%, of which 119 million yuan was signed in the third quarter, a year-on-year increase of 299.50%.

(1) Virtual shooting

The company has undertaken a total of 60 medium and large-scale XR/VP virtual studio projects around the world, including Apple, Tencent Interactive Entertainment, Microsoft, Amazon, China Film Group, NVIDIA, Meta, Toei and some Hollywood film and television production companies and other well-known virtual shooting projects in the industry.

Apple's Vision Pro is expected to start a new cycle of consumer electronics, and the company may benefit.

On December 8, 2023, the company pointed out in investor interaction that as one of the first companies in the industry to develop and launch XR virtual shooting solutions, the company previously provided XR virtual shooting solutions for Apple.

In this way, the company is expected to enter the developer ecology of Apple's Vision pro and become the first batch of companies to make performance display content for Apple.

(2) LED cinema

At present, it seems that the number of LED movie screens in the world is very small, most of them are occupied by international giants such as Samsung, Sony, LG, etc., with the gradual entry of domestic enterprises and the continuous maturity of technology, LED cinemas have the opportunity to become a market segment with high growth space in the future.

The company has joined hands with China Film to develop a new blue ocean market for LED cinema screens. The company and China Film Group jointly developed a domestically produced, high-tech format LED movie screen, and passed the DCI certification test in August this year. The company has signed the "China Film CINITY LED Cinema Screen Bulk Order Agreement" with China Film Barco (Beijing) Electronics Co., Ltd., and the company will officially open up the new blue ocean market of LED cinema screens, and work with China Film to provide LED cinema screen projection systems to major cinema chains. At present, the company's LED cinema screen has been landed in Beijing, Jinan and other theaters, and other cities are also gradually landing.

2) Digital Content (Creative Dimension)

For the whole year of 2022, Creality Digital signed new orders amounting to approximately RMB23 million, representing a year-on-year increase of 1,870.75%, of which approximately RMB11 million was newly signed for the XR virtual live broadcast room business and RMB9 million was signed for the virtual digital human business.

From January to March 2023, the amount of newly signed orders was about 11.4 million yuan, a year-on-year increase of 460.68%.

In the first half of 2023, the amount of new orders signed by Creality Digital was 22.1203 million yuan, a year-on-year increase of 56.98%, which is close to the amount of new orders signed in the whole year of 2022. Among them, more than 11 million yuan of new orders were signed for the XR virtual live broadcast room business, and about 11 million yuan were signed for the digital content business.

3) Finance and telecommunications

In 2022, the company signed new orders in the field of finance and communications with an amount of 340 million yuan.

From January to September 2023, the company signed new contracts of 255 million yuan in the first three quarters, a year-on-year increase of 5.46%, of which about 100 million yuan was signed in the third quarter, a year-on-year increase of 10.75%.

2. Creality Digital Dimension, a subsidiary, received strategic investment from Shenzhen High-tech Investment, aiming at the future high-prosperity track - digital live broadcast room, virtual digital human and digital content

1) Creality Digital has introduced strategic investors such as Shenzhen High-tech Investment Venture Capital Co., Ltd. by way of capital increase and share expansion. The amount of this capital increase is 10 million yuan, and the post-investment valuation is 145 million yuan. The funds from this financing will be mainly used for the research and development of a new generation of MetaBox products, AIGC digital asset generation tools and market expansion.

2) Founded in 2021, Creality Digital is a technology-enabled enterprise with miniaturized XR virtual live streaming solutions as the core, Metabox virtual live broadcast room, XR technical services and digital asset generation as the main business, and its products and technical services are widely used in live broadcasting, short video, education, finance, entertainment and other markets.

The MetaBox solution has functions such as immersive spatial perspective, camera tracking, motion capture (digital human), real-time rendering, extended reality, AR special effects, etc., and can realize the virtual production of live short videos and real-time interaction between digital humans and digital props, which can be applied to TVC advertisements, variety shows, virtual press conferences, events, etc.

At present, the newly launched Metabox 4KK solution is a lightweight XR overall technical solution tailored for live broadcasting, short video, online activities and other fields, mainly to solve the "three highs" of high cost, high difficulty in digital asset production, and high technical barriers.

3. Overseas markets continue to grow

Mainly affected by factors such as the slow recovery of domestic market demand and the postponement of some orders, the company achieved operating income of 491 million yuan in the first three quarters, down 24.94% year-on-year, and net profit attributable to the parent company of 5.5456 million yuan, down 76.69% year-on-year. However, the company's overseas market maintained growth, and the overseas market achieved operating income of 231 million yuan in the first three quarters, a year-on-year increase of 12.99%. Overseas markets are an important source of revenue for the company, accounting for about 50% of revenue.

Special statement: The content only represents personal views and does not constitute any investment guidance, according to which you buy and sell, profit and loss at your own risk, the stock market is risky, and investment needs to be cautious!