Event: Jiecheng shareholding company Shiyou Technology, a virtual human technology provider, plans to launch a "Meta AvatarShow" meta-universe split show platform, which can not only be customized to create meta-universe avatars, but also provide large-scale, low-cost link split and drive and control software and hardware systems for these halves.
The potential ceiling of the virtual human market is high, and the early strategic investment is waiting for results. According to the "Virtual Digital Human Deep Industry report", the overall market size of virtual human in China is expected to reach 270 billion yuan by 2030; in an ideal situation, the industry space is relatively broad. The company took a stake in Shiyou Technology, a virtual human technology provider, in 2016 and currently has a stake of 24.38%. Shiyou Technology is one of the leading providers and service providers of virtual human technology in China, and has certain advantages in the fields of high reduction image modeling, implementation of engine rendering, technical product system and so on. It has cooperated with CCTV, Hunan Satellite TV and other first-line TV stations in the radio and television industry, the Spring Festival Gala has provided virtual technical support in recent years, and Tencent, JD.com and Taobao in the Internet industry have cooperated to provide customers with software and hardware products and technical production services related to virtual technology. The main products include: self-developed real-time virtual synthesis system PUPPETEER V3.0, AI digital human product system, etc., so far has provided nearly 500 virtual digital human, technical strength and product solution ability is more outstanding.
"Resources + Technology" two-wheel drive enriches copyright resources to empower virtual human production. The company is the largest content copyright integration service provider in China, with exclusive network playback rights of more than 50,000 hours and non-exclusive total of about 80,000 hours, and the stock copyright reserve is the leading industry. The company's audio and video technology solutions are widely used in the domestic radio and television industry, press and publication industry and new media industry, and the 4K/8K production and broadcasting technology system around 5G application scenarios is in a leading position in the industry. We believe that the future development of virtual human may test the previous IP content design links; the company has a large number of film and television rights, animation rights, a large number of IP roles can be imported into Shiyou technology database to form a larger IP circular matrix, and then form content based on technology, and obtain traffic through content, and finally form a virtuous circle; as a leading domestic film and television copyright enterprise, the company's resource advantage is expected to be further expanded.
Promulgate the equity incentive plan to bind the interests of core employees. The company intends to grant a total of no more than 180 million restricted shares, of which the company intends to grant 144 million restricted shares for the first time at a price of 2.58 yuan per share. The assessment target net profit for 2021-2023 is 550 million / 700 million / 900 million yuan respectively. According to the incentive target, the corresponding profit growth rate in 2022 and 2023 is 27.2% and 28.6% respectively. We believe that the equity incentive policy will further establish a community of corporate interests and improve the internal driving force of performance growth.
Profit forecast and investment advice. It is estimated that the EPS from 2021 to 2023 will be 0.21,0.26,0.34 yuan, and the corresponding PE will be 27 times, 21 times and 17 times, respectively. The company is the largest content copyright integration service provider in China, and shares in Shiyou Science and Technology layout Yuan Universe Racetrack, with the technical strength leading in the industry. the company completes the divestiture and focuses on the core business, giving the company 30 times PE in 2022, corresponding to the target price of 7.8 yuan, covering for the first time and giving a "buy" rating, which is recommended to pay attention to.
Risk tips: the risk of intensified market competition, the risk that the ultra-high definition industrial policy is not as expected, the risk of substantial changes in downstream demand, the risk of asset impairment.