According to the company's official website, in March, Wangsu Technology announced the launch of a one-stop virtual digital human live streaming product - Wangsu Virtual Live.
[Comment]
The ChatGPT technology wave helped the 100 billion blue ocean market for virtual digital people flourish, and the company's virtual live streaming helped “digital people” land in one stop. Judging from the technology-level classification, virtual digital people are divided into two types: motion capture sensing and algorithm empowerment. The latter is more technically difficult, and it is also the technical route behind ChatGPT. The algorithm capacity of the two is similar. The difference is that the format displayed by ChatGPT is a dialog box. Taking advantage of ChatGPT, AIGC, represented by the ChatGPT model, will bring a new space of imagination to the virtual digital person-related industry chain - the combination of virtual people and ChatGPT can significantly improve the recognition, perception and analytical decision-making ability of virtual people in scene applications, improve the manufacturing efficiency of virtual people, reduce content costs, and provide customized services. The virtual live streaming product launched by the company mainly includes three functions: 2D digital split, 3D hyperrealistic digital person, and 3D scene customization. Based on the company's global live streaming acceleration capabilities and real-time audio and video technology advantages, AI modeling and real-time driving technology can provide enterprises with one-stop virtual live streaming services from digital people to live streaming acceleration, helping enterprises create differentiated digital people and 3D scenes at low cost and with a low threshold, and start virtual live streaming. Virtual digital people are rapidly penetrating people's lives: virtual idols in the field of entertainment; virtual anchors in the field of e-commerce live streaming; a large number of digital employees in the public service sector, etc. As the intelligence and interaction capabilities of virtual digital people advance, the company, as an upstream CDN service provider, is expected to seize more market and competitive initiative based on its own advantages and underlying technology.
The big model requires edge computing to participate, and companies grow with application traffic. Looking at the company's development history, the company's development in the two major eras of the Internet and mobile Internet has mainly benefited from increased traffic. The AI era will see a common increase in traffic and computing power demand. On the one hand, the high bandwidth, low latency, and low jitter required for large models all require the participation of edge computing, which balances the computing power requirements of the central nodes with edge computing power, thereby bringing about increased computing efficiency and improved end user experience. On the other hand, supply-side technological changes will bring a variety of applications. CDN vendors solve the four major problems of computing, storage, network, and security. With the emergence of a new generation of killer applications in the future, increased downstream traffic demand will help CDN companies fully enjoy the dividends of AI development.
[Investment advice]
As the world's leading cloud distribution and edge computing company, the company operates in more than 70 countries and regions around the world, and maintains a solid market position and a large number of high-quality customer groups. We believe that with the strong growth of the virtual digital human resources industry, the company, as an upstream CDN service provider, entering the market with new virtual live streaming products will benefit deeply from the explosion of the virtual digital human market, the 100 billion blue ocean opportunity. The computing power and traffic demand generated by artificial intelligence will expand the company's market opportunities in the next wave of technological change and drive the company into a new era of AI development. We expect the company's revenue to be 50.59/64.20/8.537 billion yuan respectively in 2022-2024, net profit of 196/277/406 million respectively, EPS of 0.08/0.11/0.17 yuan respectively, and the corresponding price-earnings ratio of 91/64/44 times respectively, giving it an “increase in holdings” rating.
[Risk Reminder]
Technology research and development falls short of anticipated risks;
Market competition heightens risk.