Reason for review: Recently, Tiange Interactive (1980.HK/unrated, HK$7.14) issued an acquisition announcement to acquire 66.4% of the shares of Haibenqu Network Technology Company, which belongs to “No Other Camera”, at a total cost of RMB 210 million. After the transaction is completed, the company will hold 80% of the shares in Wuyuan Camera. However, according to QuestMobile's statistics during the Spring Festival, the DAU data for no other camera increased rapidly by 60%. At the same time, the AppStore photography and video free ranking stabilized in the top six, and the company's live video and beauty camera integration effects are beginning to show.
Unrivaled cameras are becoming a phenomenal product, and DAU data is leading the rapid growth rate. Miscellaneous Camera is an image beautification software developed by Haibenqu. It has functions such as emoji packs, sketching, live streaming assistants, real-time selfie beauty, and personalized GIF short video production. At the beginning of this year, the average number of daily active users of No Other Camera had exceeded 6 million, the average number of monthly active users had reached around 22 million, and the next day's retention rate was close to 60%. According to QuestMobile data, in the ranking of the average daily active user growth of apps across the network during the 2018 Spring Festival, the average daily DAU of no other camera was 12 million (21.73 million for Meitu and FaceU about 25.81 million). The growth rate ranked fifth in the network, making it a mainstream camera product. We believe that the differences in functional experience of Alone Camera are the main reason for the rapid increase in users, and the number of active users is expected to continue to grow.
It is worth looking forward to the future strategic integration of Alone Camera and live video. In the current context of the resurgence of traffic ports such as short videos and webcasts on mobile devices, image beautification apps have regained the attention of internet giants. Today's headline purchase of FaceU for 300 million US dollars is an example. Short videos, webcasts, and portrait beautification have natural linking properties. According to our research and judgment, the average daily opening time for beauty camera products is only about 7 minutes. Integrating live streaming, short videos, female apps, and other functional business applications is the main way to realize the user value of camera products. We believe that the company has a complete layout in the above integrated functional areas, and at the same time has strong monetization capabilities. The results of future strategic integration are worth looking forward to.
Build a live video ecosystem and strengthen breakthroughs in the industry's monetization capacity pain points. As a leading “mobile+PC” real-time social video platform in China, the company has completed a strategic shift from live streaming of PC shows to live streaming of mobile shows in recent years. Users of core products such as “Meow Broadcast” and “9158 Video Community” have continued to grow. The user side recently acquired Wujiao Camera. Last year, the company continued to invest in Huajiao, etc. At the same time, through external investment, the company laid out two major traffic monetization segments, Pan-Entertainment and Internet Finance. We believe that the company is expected to form a live video platform with its short video (Meow), live streaming (9158 and Meow), and camera (no other camera) products as the core, as well as a women's economic ecosystem and monetization channel centered around the entertainment section (werewolf killing app, search, happy league, assembly number fishing) and the Internet fintech section (water phase instalment, blue collar loans, Jiurong Network, Guoshu Wealth, Shanghai Business Wealth). We believe that the company uses unscathed cameras to import high-quality female user traffic and attract male live streaming platform users, expand the live streaming business audience, and increase live streaming reward revenue; at the same time, it complements pan-entertainment and internet financial consumption to enhance its ability to monetize traffic.
Investment advice:
The rapid growth in TAU data will bring in high-quality traffic to the company's live streaming and pan-entertainment segments, which will have a positive impact on the company's business performance. Judging from the DAU during the Spring Festival, compared to today's headline acquisition of Face U's $300 million valuation, the layout for the company's acquisition of Doujin Camera was undoubtedly a success. With the deepening integration of the company's ecosystem and product flow strategies, it is expected that the company's advantageous monetization ability will once again be highlighted. It is recommended to focus on it.
Risk warning: competitive risk, technology trends.
