Key points of investment

Publish content to overseas platforms and propose strategic goals for high growth:

In November, Particle Technology, a subsidiary of the company, and Fujian Radio and Television Network Group Xiamen Rong Media Technology Co., Ltd. jointly released the “Haiyun” platform for outstanding cultural videos going overseas. As the exclusive technical service provider and in-depth operation partner of the “Haiyun” overseas platform, the company will give full play to its technical advantages and operational service advantages, provide comprehensive technical research and development and support for the “Haiyun” overseas platform, and the two sides will jointly build a cultural overseas base for the whole country.

The skit market is booming, further opening up room for growth:

The short drama market ushered in explosive growth in 2023. The company estimates that the scale of the short drama market in China will be about 30 billion yuan in 2023, and the number of potential customers will exceed 800 million yuan. Since the monetization and trading of short drama content is still in the development stage, it is more about advertising and e-commerce models. As various platforms launch payment functions for short drama content, more and more creators will pay attention to their copyright registration and approval rights in the future, and there is huge market demand.

The digital content trading industry is developing rapidly, and the company's business will continue to enjoy dividends:

With the establishment of China's digital asset trading platform, China's digital content industry is developing rapidly. As a leading enterprise in digital content asset protection and trading, Fu Bo has a complete data element management infrastructure and experience in monetizing short and medium videos for global social media platforms. At the same time, the company's video fingerprinting technology and watermarking technology have high technical barriers and are expected to continue to benefit from the overall development dividends of the digital content industry.

Give a “buy” rating:

We expect the company's EPS for 2023-2025 to be HK$0.05/0.07/0.11, respectively, and the current stock price corresponding to PE valuation is 52.4/34.1/22.8 times, respectively. Considering the company's high technical barriers, at the same time, there is huge market space for domestic copyright protection. Overall, the company was given 42 times PE corresponding to 2024, with a target price of HK$3.0 to maintain the “buy” rating.