Market News | “China’s No. 1 Hip Hop” listed on Nasdaq, soaring nearly eight times in the first week

The commercialization of niche culture “breaks the circle”

A few days ago, Pop Culture landed on Nasdaq, and it surged 405% on the first day of listing. It triggered as many as seven circuit breakers during the session, and reported $30.30. As of last Friday’s close, the company’s share price was reported at $53.40, nearly eight times higher than the issue price of $6, and the market value reached $1.274 billion.

According to estimates, Pupu Culture raised US$372 billion this time. The funds will be mainly used to develop and operate online content, develop street dance training and hip-hop event business, and create related derivative products.

Founded in 2007, Pop Culture is a hip-hop culture communication company mainly for young people. Its main business is the operation of hip-hop cultural content, including online program operation, event hosting and related training.

In recent years, the company’s business focus is shifting from providing event planning and execution services to the development of original hip-hop activities.

According to the data, the company’s total revenue for fiscal year 2019 and 2020 were US$19.03 million and US$15.69 million, of which event planning and execution items fell from 52% to 35%, and the proportion of event revenue increased from 34% to 49%. .

In addition, the high dependence of pop culture on large customers is also very noteworthy. The company’s accounts receivable to the top five customers in fiscal 2019 accounted for 58% of the company’s total accounts receivable in the current period, and this figure has increased to 65% in fiscal 2020.

Pupu Culture stated in the prospectus that when the company adjusts its marketing strategy or business center, major customers may change. If sales to other customers cannot be increased, any major business interruption affecting major customers or reduction in sales to major customers , Will likely have a negative impact on the company’s operations and cash flow.

With the gradual increase in the acceptance of hip-hop culture by the general public, especially the young generation, the hip-hop culture market is showing a trend of continuous expansion. The Frost & Sullivan report shows that the total revenue of the hip-hop culture market has increased from 4.5 billion yuan in 2014 to 14.2 billion yuan in 2019, with a compound annual growth rate of 25.6%. It is expected that the market will continue its upward trend in the next five years, and total revenue may increase to 47.8 billion yuan in 2024.

At the same time, some experts believe that hip-hop culture, as a very niche subdivision track in current popular culture, naturally has certain resistance in the process of commercialization. Whether pop culture can successfully “break the circle” may become a model for the commercialization of niche cultural industries in the future.

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