Last time, the number of “Metaverse” in Feitian Yundong’s prospectus was 256 times, and this time the frequency of use of the word reached 318 times.
Following the first submission to the Hong Kong Stock Exchange on December 28, 2021, on July 8, Feitian Yundong once again hit the “Hong Kong Stock Metaverse First Stock”.
Previously, Feitian Yundong attracted much attention due to the frequent use of the term “Metaverse” in the prospectus. This time, Feitian Yundong not only updated the financial information, but also the frequency of use of this term has also reached a new high, from more than 200 times before to more than 300 times.
When the Metaverse fever rose again in the market in 2021, Feitian Yundong not only released the Feitian Metaverse platform, but also changed the company name to Feitian Yundong a month before submitting the prospectus. This also makes many people doubt the motives of Feitianyundong’s concept of rubbing.
To this day, the debate on “whether Feitian Yundong is rubbing against the concept of the Metaverse” continues. The globally recognized “Metaverse first stock” of U.S. stocks is Roblox, which is still under controversy among investors. Both Feitian Yundong and Roblox used the term “Metaverse” in their respective prospectuses. Roblox also received a lot of attention from the market in the early stage of listing, and gained a very high market value.
After resubmitting the prospectus, Feitian Yundong increased the element content in the prospectus, but can Feitian Yundong fly to the other side of the Metaverse?
318 “Metaverses” in the prospectus
Last time, the number of “Metaverse” in Feitian Yundong’s prospectus was 256 times. This time, Feitian Yundong increased the frequency of using the word to 318 times, and the content of “Metaverse” increased significantly.
Feitian Yundong put himself in the Metaverse, but the skeptical attitude of the market has not been dispelled. Regarding Feitian Metaverse, which has attracted much attention, the risk section of Feitian Yundong’s prospectus stated, “Due to the lack of or limited operating history in the AR/VR content and service business, the Metaverse industry and the Feitian Metaverse platform, investors assess There may be difficulties in our business and growth.”
The origin of Feitian Yundong can be traced back to 2008, when Feitian Yundong existed in the name of Beijing Hengchuang Zhaoye Technology Co., Ltd. In 2009, Wang Lei and Li Yanhao were assigned the former’s equity, entered the management team, started formal operations, and changed the company’s name to Palm Feitian Technology.
It is reported that Wang Lei and others were born in game companies. In the early stage, Feitian Technology focused on the mobile game business. Later, he founded the lgame123 game publishing platform, which opened the era of mobile game publishing. Armed 2″ and other mobile games.
However, with the increasingly fierce market competition, the development of the mobile game business of Feitian Technology has not been smooth. As a result, Feitian Technology has gradually scaled down the mobile game business since then, and transformed into AR/VR content and service business.
In 2017, Feitian Technology began to develop AR direction tools and content, and set up a professional AR/VR team.
In May 2019, Feitian Technology completed the liquidation of the game business, and shifted its business focus to AR/VR content and services to complete its business transformation. According to the prospectus, in the first quarter of 2022, its AR/VR-related business revenue accounted for 100%.
Entering the Metaverse from the game industry is the path choice for many giants at present. For example, Tencent has launched a Metaverse strategy with a large number of game users, and Microsoft acquired Activision Blizzard. Wang Lei also publicly stated that the opportunity of Feitian Technology was in 2015. In that year, Feitian Technology assisted red bull’s AR/VR marketing activities to independently develop a 3D racing engine, detonating the market.
The prospectus shows that since the transformation of the new business, Feitian Technology has successively conducted five rounds of financing, and its equity structure has appeared inTongchuangweiye , Saifu Momentum, Tianjin Spark, Ningbo Mido, Nanjing Cultural Investment, Tellhow Investment and other institutions. figure.
It is worth noting that in March 2017, artist Du Haitao obtained a registered capital of 166,700 yuan from Feitian Technology for 560,000 yuan. On April 15 of the same year, the industry’s first AR racing game “Taotao Bear Speed League” customized by Feitian Technology for Du Haitao was launched in major application malls. After being with him for two years, in August 2021, Du Haitao transferred the shares he held for 1.8393 million yuan. This investment made Du Haitao more than 1.2 million yuan in income.
In addition, at the end of November 2021, Palm Feitian Technology officially changed the company name to Feitian Yundong in order to be more in line with the characteristics of the Metaverse.
Feitian Yundong has a limited operating history in AR/VR content and service business, which is one of the reasons why it is questioned for hyping the concept of the Metaverse, but Feitian Yundong has a first-mover advantage in AR/VR content and service business. According to the prospectus, according to information from iResearch, Feitian Yundong’s AR/VR service market share in China in 2021 will be about 13.5%, ranking first.
With low R&D investment, how does Feitian Yundong break into the Metaverse?
According to the prospectus, Feitian Yundong’s main businesses are AR/VR services, AR/VR content, and AR/VR SaaS. Its AR/VR marketing service customers are mainly advertisers and their agents, AR/VR content customers are mainly companies from entertainment, education, cultural tourism, technology, health care and automobile industries, and AR/VR SaaS customers are mainly customized AR/VR. VR SaaS solution customers and AR/VR SaaS platform paid subscription users.
Feitian Yundong’s core revenue source is AR/VR marketing services. From 2019 to 2021 and the first quarter of 2022, Feitian Yundong’s AR/VR marketing service business revenue was 137 million yuan, 142 million yuan, and 376 million yuan, respectively. RMB and RMB 165 million, accounting for 54.6%, 41.9%, 63.2% and 72.3% of revenue respectively.
The IP business that appeared in the prospectus will no longer generate revenue in the first quarter of 2022. Feitian Yundong said that it has shifted the focus of this business to the use of IP resources to support its own AR/VR business.
Source: Screenshot of prospectus
It is worth noting that in the increasingly competitive “Metaverse” track, Feitian Yundong did not show the corresponding investment in research and development to everyone.
According to the prospectus, from 2019 to 2021 and the first quarter of 2022, Feitian Yundong’s R&D investment was 11.425 million yuan, 15.046 million yuan, 21.703 million yuan and 8.152 million yuan respectively, accounting for 4.6% and 4.4% of the current revenue respectively. %, 3.6% and 3.6%.The total investment in research and development for three and a half years is 55.699 million yuan.
According to the standards of IPO companies on the Science and Technology Innovation Board, the R&D investment of technology companies should account for 5% or more of the current revenue.Although Feitian Yundong’s R&D investment has shown an upward trend, the proportion of R&D is declining.
There is a big difference between Feitian Yundong’s R&D investment and the impression of “burning money” that Metaverse gives. It is reported that Facebook, which changed its name to enter the Metaverse, will have an operating loss of US$10.19 billion in 2021. Japanese toy and game maker Bandai Namco also plans to invest US$1.3 billion within three years. There are many other companies investing heavily into the Metaverse. , the situation of Feitianyundong seems a bit “alternative”.
The prospectus shows that Feitian Yundong’s AR/VR marketing services, Feitianyun uses the immersive experience brought by AR and VR technologies and the advantages of media resources to provide customers with AR/VR marketing services, so as to achieve customers’ business goals , such as increasing brand exposure and enhancing brand awareness. So far, Feitian Yundong has provided AR/VR marketing services to more than 50 advertisers and promoted more than 250 advertising products, most of which are apps and websites.
However, the AR/VR marketing service business accounted for the highest proportion of revenue, but it was also the business with the lowest gross profit margin for Feitian Yundong. From 2019 to 2021, the gross profit margin of Feitian Yundong’s business will be 21.2%, 19.4%, and 21.7%, respectively.
Source: Screenshot of prospectus
For the AR/VR SaaS business, Feitian Yundong launched the first AR/VR SaaS platform in 2017, and it didn’t start generating revenue until 2019. After 2020, the business grew rapidly. In the first quarter of 2022, Feitian Yundong AR/VR SaaS business revenue was 9.5 million yuan, a year-on-year increase of 353.2%. Moreover, this part is the business with the highest gross profit margin of Feitian Yundong, but the revenue proportion from 2019 to 2021 is 2.6%, 2.7%, and 3.5% respectively.
Although the Metaverse has not yet been truly defined, there is currently a view that AR/VR content and services can be regarded as a subdivision of the Metaverse, and Feitian Yundong has achieved stable profitability with relatively little investment. To a certain extent, Feitian Yundong also provides new ideas for the development of the Metaverse industry.
(Source of the first image: Screenshot of Feitian Yundong’s official website)
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