The first stock in the domestic Metaverse, doing infrastructure business?

Everything is really ready, and I only owe the Dongfeng of the Metaverse?

Since Facebook changed its name to META, the concept of the Metaverse has quickly spread all over the world. Although we still don’t know what the Metaverse is, some people have already made the first pot of gold selling Metaverse courses.

The same is true in the capital market. At the end of 2021, Feitianyundong, which has the title of “Yuanshigu”, submitted its prospectus to the Hong Kong Stock Exchange. A series of big companies such as Shangtang, Facebook, Tencent, and ByteDance are still shouting to the Hong Kong Stock Exchange. Metaverse forays[1] , this company has already started its own listing process under the name of Metaverse.

Throughout the entire prospectus, the company’s “element content” is amazing. In the 643-page prospectus, the word Metaverse appears 244 times, and the company has to be mentioned almost every two pages. According to the data provided by iResearch, the company’s Metaverse appears. The application layer has the largest market share in China and is an uncompromising “meta company”.

According to the prospectus, the company’s revenue from 2018 to 2020 recorded 160 million, 250 million, and 340 million, respectively, but the net profit did not increase with the revenue. In 2018, it recorded 43.067 million, and in 2019, it dropped to 4187.9 10,000, and another 43.8% surge to 60.252 million in 2020, showing large fluctuations as a whole.

Moreover, the company also exposed a series of problems such as the continuous increase of short-term liabilities, the continuous increase of financing costs, and the excessive proportion of intangible assets in non-current assets.

The first stock in the domestic Metaverse, doing infrastructure business?

Through intensive reading of the prospectus, we will answer the following three questions:

1. What is this company doing?

2. What problems do the company’s financial statements reflect?

3. Is VR/AR technology a big deal?

“Yuan” content is very high

On July 28, 2019, Feng Xin, the actual controller of Baofeng Group, was taken away by the public security organs. Since the listing of Baofeng Group on March 24, 2015, the trend has been amazing, and it has gone out of the daily limit of 29 consecutive words. However, after just four years, even Dahua Accounting Firm was reluctant to undertake the audit work of Baofeng Group. Before the incident, Baofeng Group was a VR/AR related business mainly based on Baofeng Magic Mirror[2] .

And Feitian Yundong is exactly the same as Storm Mirror, and it is also doing VR/AR related business, but it does not have its own “Flying Magic Mirror”.

Feitian Yundong, formerly known as “Feitian in the palm”, was established in Beijing in 2008. At that time, Feitian in the palm was mainly engaged in mobile games. It had hundreds of skin-changing mobile games. Started as an advertising channel, serving B-end users.

After several years of hard work, it was finally successfully listed on the New Third Board in 2017, and then delisted and delisted in 2019. In 2020, Du Haitao of Hunan Satellite TV , one of the founders of the company, transferred his shares and now plans to take advantage of Metaverse’s sprint. Hong Kong Stock Exchange.

Feitian Yundong has three main businesses. In 2020, the revenue of these three businesses accounted for 78.5% of the total revenue , namely VR/AR service business (advertising), VR/AR content business (art outsourcing) and VR/AR SaaS platform business.

The first stock in the domestic Metaverse, doing infrastructure business?

The VR/AR service business, simply put, is “I make it, and I’ll help you deliver it when I’m done.” Customize the corresponding VR/AR content according to the customer’s requirements, and then play it on a specific platform, and then bill the customer according to the effect of the broadcast promotion . The billing mode is used for billing.

The first stock in the domestic Metaverse, doing infrastructure business?

Feitian Yundong VR/AR service business process, from Feitian Yundong prospectus

To put it bluntly, it is an advertisement in the form of VR/AR, and then I will help you find an advertising channel.

Traditional Internet advertisers such as Tencent Advertising have a business model of customizing advertisements according to customer requirements, and then placing them on high-traffic platforms such as WeChat or QQ, and jumping directly to specific pages to achieve the effect of attracting traffic, and Feitian Yundong is the same, only However, the delivery platform has changed from the Internet platform to the VR/AR platform.

VR/AR content business, generally speaking, is the raw material supplier service of “I do it for you”. The company makes a VR/AR content product according to customer requirements, and the customer pays the research and development and design costs, such as the sprite material in Pekemon, Feitian Yundong is only responsible for development and not for subsequent use, which is a bit like an art outsourcing service.

The first stock in the domestic Metaverse, doing infrastructure business?

This little fire dragon is an AR content

The most imaginative VR/AR SaaS business is currently the smallest business among the company’s VR/AR Three Musketeers. It can customize and integrate various application software on the VR/AR platform according to customer needs, and land on its own server. It is usually used in office business scenarios, such as cloud conferences, etc., but it is still difficult to imagine what it is like to work with VR , but It seems that when the leader points at the nose and scolds, it is quite comfortable to be able to hold Erlang’s legs.

The first stock in the domestic Metaverse, doing infrastructure business?

Feitianyundong’s VR/AR SaaS management platform

The business has been in operation for four years and has more than 800 paying users. It has not yet formed a scale. As a result, the revenue contributed by the business is negligible in the company’s financial report. In 2020, it will only account for 2.7% of the total revenue, and the other two businesses The proportion is not in an order of magnitude for the time being.

In addition to the company’s efforts in the VR/AR business, the company has not abandoned its own traditional arts. The company can also do some IP development and licensing business, and develop IP according to customer requirements, including IP images, IP fonts, etc., similar to For traditional art design companies, such as the former first-generation Internet celebrities, the “Ali” that girls love most is the IP image that their family has run.

The first stock in the domestic Metaverse, doing infrastructure business?

In addition, Feitian Yundong also has a bunch of “historical legacy businesses”, such as mass text messages with particularly long numbers, arranging for Du Haitao, a former shareholder of the company, to endorse, and some mobile games that are still in operation.

However, the proportion of non-AR/VR business revenue has been declining year by year, and some businesses have zero revenue during the disclosure period, and they cannot be found on the official website. territory.

The “Feitian Metaverse” platform , which was launched after the company changed its name to Feitian Yundong, wasshown in the prospectus as one of its future plans, and there is no application scenario yet.

The first stock in the domestic Metaverse, doing infrastructure business?

Feitian Metaverse to be launched

“Yuan” financial report is uncertain

Without the Metaverse, the company’s financial statements are not very good looking.

From the perspective of cost structure, the highest part of the company’s expenditure is “raw materials” – traffic. More than half of the top five suppliers are selling traffic, and the cost of buying traffic in 2019 accounted for about 38% of operating income .

The first stock in the domestic Metaverse, doing infrastructure business?

At the same time, with the expansion of the company’s assets, some risks are gradually being exposed, and the company’s financing costs are rising. In 2018, the financing cost was only 700,000 yuan, but in 2020, it has doubled to 1.92 million yuan. Although the financing cost is rising, the continuous borrowing has not played much “beautification” effect.

From 2019 to 2020, the company’s total current liabilities almost doubled, including a large number of financial liabilities and contract liabilities, and bank borrowings in 2020 also increased by 127% compared with 2019, while the company’s current assets growth rate was only 77.9%, this may be to expand sales channels, after all, in just three years, distribution and sales expenses have increased by about ten times.

On the other hand, the company’s non-current assets are mainly intangible assets. In 2020, intangible assets account for as high as 91.34% of non-current assets, mainly VR/AR software copyrights. However, the problem faced by intangible assets is instability, and huge asset impairments are prone to occur. After all, the current “Metaverse” logic is being revalued every day.

Under the influence of these factors, the company’s net profit did not show a steady growth trend, but the profit fluctuated greatly. In 2019, compared with 2018, there was even a downward trend, and the net profit margin and gross profit margin declined year after year. In 2020, the 17.8% The net profit margin is not even comparable to traditional advertising channel companies such as Focus Media [3].

The first stock in the domestic Metaverse, doing infrastructure business?

In addition, the company’s solvency and asset quality also have corresponding problems. Compared with traditional fixed assets, intangible assets have greater uncertainty, which will cause the company’s operating performance to “change face” at any time. The quality of the company is a problem. On the other hand, it can only be said that the track is too crowded and the opponents are too strong.

“Yuan” industry bigwigs gather

Feitian Yundong’s position in the industry chain is an intermediate channel that links VR/AR upstream platforms and downstream customers.

The first stock in the domestic Metaverse, doing infrastructure business?

From the platform side, although VR equipment is growing, it is far from reaching the level of popularization. From 2017 to 2019, the annual shipment of VR headsets in the world is less than 4 million units, and only 25 million people are exposed to shallow users. , the depth of users is less than 2 million, and the VR level cannot be said to have a foundation for popularization for the time being.

The price of deep AR experience glasses for AR enthusiasts is as high as 27,000-39,000 yuan per pair, which is not so friendly to Chinese people who have just completed the task of poverty alleviation. The AR application scenarios based on consumer products such as mobile phones are also extremely limited.

Therefore, professional VR/AR equipment is basically concentrated in specific places such as Internet cafes, hospitals, shopping malls and schools for special scenes. At least no one has seen people with VR/AR equipment appear on the subway or on the road. Therefore, this type of equipment is still in the stage of industrial-grade products, far from reaching the level of mass consumption.

At present, the application field of VR is mainly in games. For example, the number of VR content in the foreign game platform Steam has reached 5,554, and there is no domestic platform that can compete with STEAM. There is a vacuum in the domestic VR game platform, and it is difficult to get more traffic.

From a customer perspective, the main customers are game companies, tourism attractions related departments and government projects. However, the current game industry operation has changed its thinking and is no longer obsessed with placing purchases, and the traffic business is not very easy to do.

In 2019, the average dissemination life cycle of a single game creative was 6.38 days, and only 5.12 days remained in 20 years, a decrease of 19.7% in one year. Buying traffic is not as easy to use as it used to be [4], even mobile games with a strong ability to attract money, and the willingness to advertise in VR/AR games is even more evident. Not to mention that this type of game is a niche among the niche, and there are not many companies in China.

The VR/AR content in the government and tourist attractions is more of a novelty, and it is only a shallow taste. After all, in order to respond to the policy, it is normal to support the VR/AR industry, but the policy is not common, and the demand is not as strong as we think.

The first stock in the domestic Metaverse, doing infrastructure business?

Qiao Family Courtyard Virtual Tour Interface

For channels and content producers, Feitian Yundong’s peers also include the AI ​​Four Little Dragons represented by SenseTime, all of which can provide VR/AR content production and delivery services. For example, the smart life business of SenseTime, the VR/AR content produced by it can be industrialized and produced on a large scale. Compared with Feitian Yundong, the production efficiency is higher, and there is a qualitative gap in R&D capabilities.

Although Feitian Yundong’s research and development expenses are increasing and will reach a maximum of 15 million in 2020, it is a fraction compared to SenseTime’s 2.45 billion in 2020. Although this direct comparison is a bit excessive, there are It’s a bit uncomfortable to have multiple oversized competitors.

What’s more, Meta, Tencent, ByteDance and other giants are eager to try, and the boundary between software and hardware is becoming more and more blurred. We can only pray that Feitian Yundong will have a stronger ability to withstand pressure.


Shen Nanpeng mentioned in an open dialogue that the Metaverse platform can only be created by technology giants[6].

Now is the hottest moment for the concept of the Metaverse, and choosing this concept to go public can indeed maximize its valuation. Let the institutional investors inside have a good exit path. After all, no one knows how long they can stand in the wind.

But in the face of the real Metaverse, the 15 million R&D expenses may still be a bit stretched, and the construction of the Metaverse requires continuous high investment. ByteDance recently announced its own Metaverse plan, investing 5 billion [5] in the preliminary layout alone, and Facebook has even modified its golden signboard for the Metaverse.

As for Roblox, the first share of the Metaverse overseas, his core ability is to allow everyone to participate in the production of content. With Douyin Zhuyu in front, this business model is quickly and widely accepted, and it is directly reflected in the stock price. .

The development of the social network system has indeed encountered a bottleneck, and a new scene is urgently needed to expand the boundary, but what is the infrastructure of the Metaverse? It will take more time to prove.


[1] Tencent’s first Metaverse project was exposed, thousands of people gathered to compete

[2] Feng Xin, the founder of Baofeng Group, was prosecuted for bribery: 100 million defrauded by his subordinates but unaware of Fast Technology

[3] Focus Media 2020, 2019 Annual Report

[4] Can the game business of station B still work? Yuanchuan Business Review

[5] ByteDance denounces billions of layout Metaverse: in the next 5 years, this concept will subvert the world surging

[6] Shen Nanpeng talks to DST founder: Metaverse platform can only be created by tech giants Tiger Sniff

[7] Feitian Yundong Prospectus

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