The first Yuanverse IPO in China is here

Who will be the first Yuanverse IPO in China?

Not long ago,

Feitian Yundong

submitted a prospectus to the Hong Kong Stock Exchange and planned to be listed on the Hong Kong main board. The company's original name is Feitian Technology, which focuses on AR/VR business. In December 2021, it officially changed its name to Feitian Yundong. At the same time, it announced its entry into the metaverse field, hoping to become

the first stock in the metaverse

< p>The person at the helm behind him -

Wang Lei

, was born in 1982 and has been engaged in game development since graduating from university. In 2009, he joined the then Palm Feitian and led the creation of a number of stand-alone mobile games. In 2015, after the VR/AR concept emerged, Wang Lei led the company's transformation and launched the first AR/VRSaaS platform. As the concept of the Metaverse became popular, Feitian Yundong followed the general trend and raised the banner of the Metaverse again.

After combing Feitian Yundong’s prospectus, I was surprised to find that the Metaverse was mentioned more than 200 times. Wang Lei once explained that the company's main game-related business naturally highly overlaps with the concept of the Metaverse, and it has also been deeply involved in the AR/VR field before. Of course, this is not an isolated case - known as the world's first stock in the Metaverse, Roblox has a market value of more than 300 billion a year after its listing. As a result, the Metaverse began to sweep the domestic primary and secondary markets, performing magical scenes.

At the age of 39, he used AR/VR to create an IPO

The 256-dimensional universe appears in the prospectus

The story of Feitian Yundong dates back to 2008.

In March of this year, Yang Xuekai, Guo Xiaofeng, and Song Pengpeng jointly invested in the establishment of Feitian Technology, which was engaged in game-related business. This was 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 their shares.

The prospectus shows that Wang Lei is now the largest shareholder of Feitian Yundong. Born in 1982, Wang Lei has the dual identities of

game person

and

advertising person

. After graduating from North China University of Technology majoring in automation, he successively worked in information technology and game development at Palm Wanwei and Palm Qu Technology.

In 2009, Wang Lei officially resigned from Zhangqu Technology and joined Zhangfeitian Technology as the general manager. Under his leadership, the company independently developed a number of stand-alone mobile games, including "Racing God", "Alice in Wonderland", "Battlefield Gunslinger" and so on.

In 2015, VR emerged in China

Wang Lei saw the opportunity and began to accumulate relevant experience. In 2017, he decided to shift the company's focus to AR/VR content and services. Regarding this past event, Wang Lei once revealed in a Xinhua News Agency column: Generally speaking, we have gone through two stages: from 2008 to 2015, it was the company's 1.0 stage, focusing on the game business. By 2015, we had a landmark cooperation with Red Bull, and the company began to move towards the 2.0 era of interactive content marketing.

At that time, Wang Lei proposed

CAA

the company strategy, namely Content+AR+AI. Specifically, it mainly includes placing AR/VR interactive content advertisements for customers and charging customers based on service results; the AR/VR content business will provide customized content based on customer needs, such as middle school geography VR courseware.

As a new technology, the AR/VR business is extremely costly, and Wang Lei began to seek to expand financial resources. In 2017, Zhongfeitian Technology applied for listing on the New Third Board. On July 14 of the same year, the company successfully landed on the capital market.

Since then, Feitian Technology’s business has taken off, launching

the first AR/VRSaaS platform

. Public data shows that in 2018, the company achieved operating income of 170 million yuan, an increase of 114.43% over the same period; the net profit attributable to shareholders of the listed company was 43.5412 million yuan, an increase of 129.18% over the same period.

However, just as Zhongfeitian Technology was developing in full swing, Wang Lei made an unexpected decision: to withdraw from the New Third Board. He explained in the prospectus: In order to implement our future business strategies and seek to enter the capital market with a wider investor base on other stock exchanges.

On August 27, 2019, the shares of 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. It reached strategic cooperation with Baidu VR and became JD.com's core VR supplier.

In the blink of an eye, 2021 has arrived, and Palm Feitian Technology has ushered in a huge opportunity -

The concept of the metaverse has exploded

, allowing this company to deeply engage in AR/VR The company has received a lot of attention from the market over the years. Whether you are an individual or an enterprise, you can only follow the trend of the times. On November 30, 2021, Feitian Technology in the palm of your hand officially established Feitian Yundong, a new business with the theme of the Metaverse, dedicated to helping small and medium-sized enterprise customers understand and enter the Metaverse. On December 28, the company officially submitted a prospectus to the Hong Kong Stock Exchange.

In Wang Lei’s view, the company’s game-related main business naturally highly overlaps with the concept of the Metaverse. At the same time, since it started working on VR in 2015, it already has a good foundation for AR and VR solutions and small and medium-sized enterprises. Corporate project experience. He judged that the explosion of the metaverse concept will accelerate the development of this industry. In fact, the company is also working hard to bind the concept of the Metaverse. In the prospectus submitted this time, the Metaverse was mentioned a total of 256 times.

Behind the first stock in the Metaverse:

Revenue of 300 million yuan in one year, and 4 rounds of financing have been completed

Being called the first stock in the Metaverse, what exactly is this? What kind of business is it?

The prospectus shows that Feitian Yundong mainly provides

AR/VR services, AR/VR content and AR/VRSaaS business

So-called

< p>AR/VR services

refers to providing solutions to customers by cooperating with media platforms or their agents, including placing AR/VR interactive content ads. It is understood that VR technology can simulate the environment and vividly display products, while AR technology can be used for tracking and positioning to interact with end users in reality, and enhance user participation and fun through interactive, immersive and scene-based experiences. sex. In AR/VR services, Feitian Cloud charges customers according to the service results. So far, it has served more than 40 advertisers.

And

AR/VR content business

is to develop AR/VR content according to customer requirements to apply it to its business and provide it to end users. For example, Feitian Yundong once used virtual reality technology to restore the official store of a well-known international sporting goods retailer. The display and layout were restored 1:1, effectively reducing the training cost of the brand's store design. Feitian Yundong also mentioned that it had created a VR panoramic display for a famous tourist attraction in Shanxi.

AR/VRSaaS platform

It is a rapidly growing business of Feitian Yundong. Through standardized products, customers can produce and publish AR/VR-based content themselves. The prospectus shows that the company provides services or content to customers in more than 10 industries including entertainment, Internet, e-commerce, cultural tourism, business services, education, finance, real estate, automobiles, and live broadcasting. In 2020, Feitian Yundong also became a partner of Tencent, and its AR/VRSaaS platform became the only AR/VR product supplier selected for Tencent's Qianfan Plan.

From a revenue perspective, from 2018 to 2020, Feitian Yundong’s revenue was 164 million yuan, 251 million yuan, and 339 million yuan respectively; including AR/VR services, AR/VR content and AR/ The total revenue of VRSaaS business was 75.1 million yuan, 189 million yuan, and 266 million yuan, accounting for 45.9%, 75.3%, and 78.5% respectively.

In the first half of 2021, thanks to the Yuanverse craze, the company’s revenue reached a new high, reaching 278 million yuan, a year-on-year increase of approximately 129.8%. The main business revenue was 260 million yuan, accounting for more than 93%. %.

It is worth mentioning that Feitian Yundong’s gross profit margin is not low, among which the AR/VRSaaS business has the highest gross profit margin, reaching

more than 50%

, followed by AR/VR content, with gross profit margin maintained at

47%

. In comparison, the performance of AR/VR services is slightly weaker, only about 20%.

However, in terms of R&D investment, Feitian Yundong is not ideal. From 2018 to 2020, the company's R&D investment was 7.58 million, 11.425 million, and 15.046 million yuan respectively. In the first half of 2021, the R&D investment was 9.012 million yuan, accounting for 4.6%, 4.6%, 4.4%, and 3.2% of the current revenue respectively.

According to iResearch, the market size of China’s AR/VR content and services in terms of revenue in 2020 is RMB 11.5 billion, and is expected to increase from RMB 21.1 billion in 2021 to 2025. of 102.8 billion yuan, with a compound annual growth rate of 48.6%. Currently, in terms of revenue, Feitian Cloud ranks first in the domestic AR/VR content and service market in 2020, reaching 2.3%; it also ranks first in the AR/VR service market, accounting for 12.6% .

Before listing, Feitian Yundong successively completed Series A, A+, B and C rounds of financing, among which Tongchuang Weiye, Saifu Dynamics, Xi'an Zhiyao, etc. participated in the A+ round, Ningbo Midu, etc. Participated in the B round, and Zhongtong Xinyuan and others participated in the C round.

So far, in Feitian Yundong’s pre-IPO shareholder structure, controlling shareholders Wang Lei and Li Yanhao hold 49.66% of the shares through Brainstorming Café; natural person shareholders hold 12.28% of the shares, and other institutional shareholders hold 38.06% , including Tongchuang Weiye 6.08%, Xi'an Zhiyao 4.09%, Saifu Dynamics 4.05%, etc.

There have been media reports that Hunan Satellite TV host Du Haitao was also a shareholder of the company. On February 9, 2017, Du Haitao participated in the first capital increase of Zhangzhong Feitian Co., Ltd. as a new investor and became the company's third largest shareholder, with a shareholding ratio of 8.6%.

However, as Palm Feitian continues to increase capital, Du Haitao's shareholding ratio gradually decreases. In August 2021, Du Haitao transferred and sold his shares at a price of 1.8393 million yuan.

Yuanverse, sweeping the primary and secondary markets

Competing for the first domestic IPO

As you can see, more and more companies claim that they are doing Metaverse.

It all starts with the game company

Roblox

. Since its founding in 2004, Roblox has been working hard to create a metaverse-like gaming platform. In March 2021, the company wrote the Metaverse concept into its prospectus for the first time and successfully listed on the New York Stock Exchange. On the day of listing, the stock price soared 54%, and the market value exceeded US$40 billion. As of January 7, 2022, the total market value has reached US$51.63 billion.

Known as

the world’s first Metaverse IPO

, Roblox has easily exceeded the sky-high market value of 300 billion, which is amazing. We draw our attention back to China, and the Metaverse is sweeping the primary and secondary markets. Just like Feitianyundong, there are still many people vying to become the first Yuanverse IPO in China.

Soul, which was preparing to go public in the United States, also packaged itself as a social metaverse. The company announced on Weibo that Soul is a social metaverse for GenZ linked to Soul. In January this year, Soul established the JustSoSoul Research Institute, which uses Soul site users as its survey subjects to diversify the group portraits of Generation Z and open up a new section for Soul's social metaverse.

At the same time, the Yuan Universe has become an artifact of the secondary market, and it seems that as soon as it gets involved, the stock price will rise sharply.

In September 2021, the veteran game company

Zhongqingbao

issued an article on its official public account saying that the company will soon launch a game for operating a winery. The core Metaverse game Brewmaster. In the following two months, Zhongqingbao’s stock price soared into the sky, rising as much as 362%. During this period, Zhongqingbao received three letters of concern, two of which requested explanations on changes in price increases as to whether there was a motive for speculating on the hot concepts of the Metaverse to speculate on the stock price.

On January 3 this year, Li Ruijie, chairman of Zhongqingbao, released a demonstration video of the H5 version of "Wine Master" on Weibo. He said that after five overthrows, the current H5 version of the Metaverse "Brew Master" is beginning to be close to his requirements, and there will be 2D, 3D, VR, overseas, and Robloth versions later. On January 5, Zhongqingbao became active again, with a daily limit of 20%.

This magical scene continues. Recently, a subsidiary of Hon Hai Group

Huahan Technology

disclosed that Google has spent US$40 million to acquire 4.6% of the company's equity, becoming its third largest legal shareholder. The two parties will Join hands to enter the metaverse market. As soon as the news came out, Huahan Technology sealed its daily limit. According to incomplete statistics, there are currently nearly 90 Metaverse concept stocks in the A-share market, but many of them still do not have Metaverse-related technologies or products, or the Metaverse projects have not yet been implemented.

But after the hustle and bustle, there is often nothing but chicken feathers everywhere. Now some Metaverse concept stocks have shown a downward trend-Choice data shows that the stock prices of 22 Metaverse concept stocks have fallen back in 2021. Among them, ArcSoft Technology was the one with the highest decline, reaching 36.6%.

The ups and downs in the market value of the Metaverse concept stock exactly reflect the truth: new things are bound to be accompanied by new risks.

As the People’s Daily commented not long ago, although the metaverse seems to have vast space and multiple possibilities, it is still an emerging thing that has not yet taken shape. Everyone still needs to look at the current metaverse craze rationally and be wary of any deception in the name of technology and the future; whether it is a mirror image or a tangible future, capital hype or a new track, old wine in new bottles or new technological breakthroughs. You might as well think twice and beware of the risk of burns due to heat.

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