The first domestic IPO of Metaverse may be coming

Known as the world’s No. 1 stock of Metaverse, Roblox has a market value of more than 300 billion a year when listed.Who will be the first stock of the domestic Metaverse?

The first domestic IPO of Metaverse is coming.

Not long ago, flying clouds moving submitted to HKEx prospectus, to be listed in Hong Kong main board. The company was originally called Feitian Technology in the palm of the hand and focused on AR/VR business. In December 2021, it officially changed its name to “Feitian Yundong” and announced its entry into the Metaverse field, hoping to become the first unit of Metaverse .

The man 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 Flying, leading the creation of a variety of stand-alone mobile games. In 2015, after the rise of the VR/AR concept, Wang Lei led the company’s transformation and launched the first AR/VR SaaS platform. Following the great fire of the Metaverse concept, the flying clouds follow the general trend, and the banner of the Metaverse is raised again.

After combing through the prospectus of Feitian Yundong, it was surprisingly found that the “Metaverse” was mentioned more than 200 times. Wang Lei once explained that the company’s main game-related business is naturally highly overlapped with the Metaverse concept, and he 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 of Metaverse, Roblox has been sitting on a market value of more than 300 billion in one year, so Metaverse began to sweep the domestic primary and secondary markets, staged a magical scene.

At the age of 39, he made an IPO based on AR/VR, and a 256-dimensional universe appeared 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 funded the establishment of Feitian Technology (namely Beijing Hengchuang Zhaoye Technology Co., Ltd.) to engage in game-related businesses. This is the predecessor of Feitian Yundong. In 2009, the company’s main shareholders Wang Lei, Li Yanhao, etc., signed a share transfer agreement with the three to acquire all their shares.

The prospectus shows that Wang Lei is now the largest shareholder of Feitian Yundong. Born in 1982, Wang Lei, bothgames people and advertisers dual identity, since July 2005, graduated from automation North China University, he worked in Newpalm, palm interested in science and technology in IT and game development class work.

In 2009, Wang Lei formally resigned from Palm Fun Technology and joined Palm Feitian Technology as the general manager. Under his helm, the company independently developed a variety of stand-alone mobile games, including “The God of Drag Racing”, “Alice in Wonderland”, “War Gun God” and so on.

In 2015, when VR emerged in China , Wang Lei looked at the opportunity and began to do related accumulation. 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 guest column of Xinhua News Agency: “We have generally gone through two stages: from 2008 to 2015, the company’s 1.0 stage, focusing on the game business. By 2015, We have a landmark cooperation with Red Bull, and the company has thus started the 2.0 era of interactive content marketing.”

At that time, Wang Lei proposed the ” CAA ” corporate strategy, namely Content+AR+AI. Specifically, it mainly includes advertising of AR/VR interactive content for customers, and charging customers based on service results (such as marketing performance); AR/VR content services will provide customized content based on customer needs, such as high school geography VR courseware.

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

Since then, the business of Feitian Technology has taken off, launching the first AR/VR SaaS 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 the development of Feitian Technology in the palm of the hand was 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 strategy, and seek to enter other stock exchanges in order to enter the capital market with a wider investor base.”

On August 27, 2019, Palm Feitian Technology’s shares were officially delisted from the New Third Board. In the following years, the company’s SaaS platform further iterated, and the VR panoramic store project was launched, covering multiple industries. It reached a strategic cooperation with Baidu VR and became the core supplier of JD VR.

In the blink of an eye, 2021, Feitian Technology ushered in a huge opportunity-the “Metaverse” concept exploded, so that this company that has been deeply involved in AR/VR for many years has received a lot of market attention. Whether it is an individual or an enterprise, the times are the only way to follow the trend. On November 30, 2021, Feitian Technology officially established a new Metaverse-themed business “Feitian Yundong”, dedicated to helping small and medium-sized customers understand and enter the Metaverse. On December 28, the company (which has been renamed “Feitian Yundong”) formally submitted a prospectus to the Hong Kong Stock Exchange.

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

Behind the first stock of Metaverse: 300 million yuan in a year, 4 rounds of financing have been completed

Known as the “first share of the Metaverse”, what kind of business is this?

The prospectus shows that Feitian Yundong mainly provides AR/VR services, AR/VR content, and AR/VR SaaS services.

The so-called AR/VR service refers to the provision of solutions for customers through cooperation with media platforms or their agencies, including the placement of AR/VR interactive content advertisements. 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 achieve interaction with end users in reality, and enhance users’ sense of participation and interest through interactive, immersive and scene-based experiences sex. In AR/VR services, Feitian Yundong charges customers based on service results (such as marketing performance). So far, it has served more than 40 advertisers.

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

The AR/VR SaaS platform is a fast-growing business of Feitian Yundong. Through standardized products, customers can produce and publish AR/VR-based content on their own. The prospectus shows that the company provides services or content for 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 will also become a partner of Tencent, and its AR/VR SaaS platform will become the only AR/VR product supplier selected for Tencent’s Qianfan Plan.

From the perspective of revenue, from 2018 to 2020, Feitian Yundong’s revenue will be 164 million yuan, 251 million yuan, and 339 million yuan respectively; of which the total revenue of AR/VR services, AR/VR content, and AR/VR SaaS business is 7510 10,000 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 “Metaverse” boom, the company’s revenue reached a new high, reaching 278 million yuan, an increase of approximately 129.8% year-on-year. The main business revenue was 260 million yuan, accounting for over 93%.

It is worth mentioning that Feitian Yundong’s gross profit margin is not low. Among them, the gross profit margin of AR/VR SaaS business is the highest, reaching more than 50%, followed by AR/VR content, which has a gross profit margin of 47%. In contrast, the performance of AR/VR services is slightly weaker, only around 20%.

But 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 respectively. The R&D investment in the first half of 2021 was 9.012 million, accounting for 4.6%, 4.6%, 4.4% and 3.2% of the current revenue, respectively.

According to iResearch Consulting, the market size of AR/VR content and services in China in terms of revenue in 2020 will be RMB 11.5 billion, and it is expected to increase from RMB 21.1 billion in 2021 to RMB 102.8 billion in 2025, a compound annual The growth rate is 48.6%. At present, in terms of revenue, Feitian Yundong ranked first in the domestic AR/VR content and service market in 2020, reaching 2.3%; it also ranked first in the AR/VR service market, accounting for 12.6% .

Before going public, Feitian Yundong completed round A, A+, B and C rounds of financing. Among them, Tongchuangweiye, SAIF Dynamics, Xi’an Zhiyao participated in the A+ round, Ningbo Midu participated in the B round, and Zhongtong Xinyuan Wait for the C round.

So far, in the shareholder structure of Feitian Yundong before listing, the controlling shareholders Wang Lei and Li Yanhao, through Brainstorming Café, hold 49.66% of the shares; natural person shareholders hold 12.28% of the shares, and other institutional shareholders hold 38.06% of the shares, including Tongchuang Weiye 6.08. %, Xi’an Zhiyao 4.09%, SAIF Dynamic 4.05%, etc.

There have been media reports that Du Haitao, the host of Hunan Satellite TV, was also a shareholder of the company. On February 9, 2017, as a new investor, Du Haitao participated in the first capital increase of Zhangzhong Feitian Co., Ltd. and became the third largest shareholder of the company, with a shareholding ratio of 8.6%. However, as Palm Feitian continued to increase its capital, Du Haitao’s shareholding ratio gradually declined. In August 2021, Du Haitao transferred and sold his shares at a price of 1.8393 million yuan.

Metaverse, sweeping the primary and secondary markets, competing for the first domestic IPO

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

All of this starts with Roblox, a game company. Since its establishment in 2004, Roblox has been working hard to build a game platform similar to the Metaverse. In March 2021, the company included the concept of Metaverse in 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%, with a market value of over US$40 billion. As of January 7, 2022, the total market value has reached 51.63 billion U.S. dollars (about 329.5 billion yuan).

Known as the world’s first Metaverse IPO, Roblox easily broke through the sky-high market value of 300 billion, which is amazing. We brought our attention back to China, and Metaverse is sweeping the primary and secondary markets. Just like Feitian Yundong, there are still many people vying to become the first Metaverse IPO in China.

Soul, which was preparing to go public in the United States before, also packaged itself as a “social Metaverse.” The company declared on Weibo that Soul is “a social Metaverse linked to Soul for GenZ.” In January of this year, Soul established the Just So Soul Research Institute. The research institute diversified the collection of Gen Z group portraits based on the users of Soul station as the survey object, and opened up a new section for Soul’s social Metaverse.

At the same time, Metaverse has become an artifact of the secondary market, and it seems that the stock price will rise sharply as soon as it is touched.

In September 2021, the veteran game company Zhongqingbao issued a document on its official official account that the company is about to launch a Metaverse game “Brewmaster” with a winery as its core. In the next two months, Zhongqingbao’s share price went straight into the sky, rising by as much as 362%. During the period, Zhongqingbao has received three letters of concern, two of which were requests to explain whether there is a motivation to speculate on the stock price of the hot concept of Cengyuan Universe on the increase.

On January 3 this year, Li Ruijie, chairman of Zhongqingbao, released a demonstration video of the H5 version of “Master Brewer” on Weibo. He said that after five overthrows, the current H5 version of the Metaverse “Brewmaster” has begun to approach his own requirements, and there will be 2D, 3D (with locked perspective), VR, overseas, and Rob Roth versions in the future. On January 5, Zhongqingbao became active again, with a daily limit of 20%.

This magical scene continues. A few days ago, Huahan Technology, a subsidiary of Hon Hai Group, disclosed that Google has spent US$40 million to acquire a 4.6% stake in the company and become its third largest legal person shareholder. The two parties will join hands to enter the Metaverse market. As soon as the news came out, Huahan Technology blocked the daily limit. According to incomplete statistics, there are nearly 90 stocks of Metaverse in the A-share market so far, but there are still many companies that do not have Metaverse related technologies or products, or the Metaverse project has not been implemented.

But after the hustle and bustle, it is often all over. Nowadays, some Metaverse concept stocks have shown a downward trend-Choice data shows that in 2021, the stock prices of 22 Metaverse concept stocks will fall. Among them, Rainbow Soft Technology (688088.SH) was the one with the highest decline, reaching 36.6%.

The ups and downs of the stock market value of the Metaverse concept precisely reflect one truth: new things will inevitably accompany 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 formed. Everyone still needs to rationally view the current Metaverse boom and be wary of any technology and future Flicker in name; is it a bright future or a tangible future, a capital hype or a new track, a new bottle of old wine or a new technological breakthrough. You may wish to calm down and beware of the risk of burns.”

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