In recent years, many Internet and technology companies have begun to seek digital transformation, and the metaverse has become one of the popular tracks for their layout.
The layout of the metaverse is also the choice of 263 (full name "263 Network Communications Co., Ltd."), a well-known enterprise in the field of Internet communications. To this end, in April 2022, 263 also held the 263 Enterprise Metaverse Conference. At present, 263 has three main businesses: cloud network, cloud communication, and metaverse.
It can be seen that 263 has placed the development of the metaverse business in an important position as one of the three main businesses. However, the 263 labeled as the metaverse, and its performance in 2023 does not seem to be satisfactory.
In 2023, 263's operating income will be about 890 million yuan, a year-on-year decrease of 0.61%, and the net profit loss attributable to shareholders of listed companies will be about 255 million yuan, a year-on-year decrease of 897.37%.
In this regard, 263 said that the 200 million yuan of trust wealth management purchased by the company from Zhongrong International Trust Co., Ltd. was overdue and not paid, and the fair value of the current period decreased significantly, and it was necessary to provide for fair value change losses.
It is worth noting that 263's metaverse business has also attracted the attention of the Shenzhen Stock Exchange. Recently, 263 was issued an inquiry letter for the 2023 annual report by the Shenzhen Stock Exchange. The inquiry letter pointed out that 263 repeatedly mentioned the metaverse business in its annual report, but did not disclose key information such as the operating income and costs of the business.
01. Label the metaverse
In 2021, with the listing of Roblox, the first stock of the metaverse, on the New York Stock Exchange in the United States, and the announcement of Facebook, the world's largest social network, to change its name to Meta, the concept of the metaverse exploded.
For a while, many companies in all walks of life are positively integrating with the metaverse, especially the technology and Internet companies that are usually familiar with them, and they have announced their layout or increased the metaverse track.
It was also during this period that 263 officially announced the increase in the metaverse track. In April 2022, the 263 Enterprise Metaverse Conference of "Connection and Empowerment: New Opportunities, New Patterns, and New Values" was held.
At the press conference, Li Yujie, chairman of 263, released a new corporate strategy of "building intelligent cloud connectivity and empowering digital transformation", focusing on the layout of enterprise cloud, enterprise going overseas, information and innovation localization, and enterprise metaverse, and innovatively launched 3D virtual live broadcast in the form of cloud release.
In fact, for those games and related enterprises, doing the metaverse has inherent advantages. However, for 263, it is an old Internet communication industry service provider. As early as 1998, 263 Group's first caller billing dial-up Internet access service in China was officially put into operation, with access number 263.
In the above-mentioned press conference, Li Wenkai, then director of the 263 Solution Department, said that based on the self-developed NRTC audio and video underlying technology, 263 has built a complete virtual live broadcast service system, which can support the construction of virtual studios, virtual conference rooms, virtual annual meetings and summits.
According to 263's 2023 annual report, it is committed to becoming the world's leading Internet communication cloud service provider by promoting the three business blueprints of "cloud network, cloud communication, and metaverse" in an orderly manner. In other words, the current metaverse business is one of the three main businesses of 263.
According to the 2023 annual report, its metaverse business aims to provide enterprises with services such as virtual space construction, 3D virtual live broadcast, and AI digital human design through digital technologies such as artificial intelligence, RT3D, and real-time cloud rendering, so as to create intelligent connections and build intelligent interaction methods.
Among them, at the AI digital human level, the company is based on the underlying technical architecture and RTN capabilities of the 263 metaverse, combined with artificial intelligence technologies such as NLP, machine learning, and AIGC, to create a service-oriented digital human based on human and AI intelligence-driven for enterprises.
At the same time, the company provides consulting, comprehensive technical solutions, delivery, services and other full-chain value output, and assembles and combines them for delivery on demand according to the existing mainstream technology and large-scale model technology.
In terms of 3D virtual live broadcast, the data shows that 263 is based on RT3D, VR, AR, digital human, motion capture, real-time cloud dyeing and other three-dimensional digital technologies to create a new generation of 3D virtual live broadcast products. At the same time, the product is integrated with delay-free live broadcast, broadcast-level broadcast and professional live broadcast services, so that users can enjoy immersive three-dimensional panoramic live broadcast and virtual and real interactive experience beyond reality with only one computer, one camera, and one green screen live broadcast room.
02. Metaverse performance "Lost Cloud"
The performance of 263 after being labeled as a metaverse does not seem to be satisfactory.
According to the data, in 2023, the operating income of 263 will be about 890 million yuan, a year-on-year decrease of 0.61%, the net profit loss attributable to shareholders of listed companies will be about 255 million yuan, a year-on-year decrease of 897.37%, and the net profit loss attributable to shareholders of listed companies after deducting non-recurring gains and losses will be about 133 million yuan, a year-on-year decrease of 7766.15%.
Image source: 263 Company 2023 Annual Report
Regarding the year-on-year decline in the company's net profit attributable to shareholders of listed companies, 263 said that it was mainly due to the overdue payment of 200 million yuan of trust wealth management purchased by the company from Zhongrong International Trust Co., Ltd., and the fair value of the current period decreased greatly, and it was necessary to provide for fair value change losses;
It is worth noting that in 2021, 2022, and 2023, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be about -34.752 million yuan, 1.7305 million yuan, and -133 million yuan, respectively. It is not difficult to see through the data that this financial indicator of 263 is quite volatile.
It is worth noting that recently, the Shenzhen Stock Exchange also issued an inquiry letter for the 2023 annual report on 263. The inquiry letter pointed out that the company's annual report mentioned the metaverse business many times, but did not disclose the operating income and operating costs of the business. Please describe the business model of the metaverse, the time point of recognition of operating income, the amount and proportion of operating income in the past two years, and the relationship between this business and cloud network and cloud communication business. At the same time, the Shenzhen Stock Exchange asked 263 to respond to the letter of inquiry by April 30.
Image source: 263 Company 2023 Annual Report
By querying 263's annual report last year, it can be seen that 263 did not disclose the relevant indicators of the metaverse business, and it was also not disclosed in the 2022 annual report. According to the data, in 2023, 263 cloud communication business and cloud network business will account for 51.06% and 48.6% of revenue respectively, while other businesses will account for only 0.34% of revenue. In 2022, 263's other businesses accounted for only 0.29% of revenue.
Image source: 263 Company 2023 Annual Report
In addition, the 2023 annual report shows that the number of R&D personnel in 263 companies last year was 244, a year-on-year decrease of 20.78%, while in 2022, the number of R&D personnel was 308. In comparison, there will be 64 fewer R&D personnel in 2023 than in 2022. At the same time, in 2023, the amount of R&D investment in 263 will be about 92.0581 million yuan, a year-on-year decrease of 14.6%.
In addition, at the end of last year, the 263 announcement showed that Bruce Lee, the actual controller of the company, from November 20, 2023 to November 24, 2023, Bruce Lee reduced his holdings of 7,166,100 shares through centralized bidding.
On the other hand, we will continue to pay attention to the actual situation and performance of the 263 metaverse business.