Key points of investment

Incident: Recently, Visual China strategically invested in the domestic 3D content creator community and trading platform CG Model Network to jointly expand the visual content industry in the era of artificial intelligence.

The community has rich 3D content reserves, which is expected to help the company build a content moat. CG Model Network's 3D model creator community has more than 2 million registered users. It is also a domestic 3D model trading platform. The platform can sell more than 1 million content. Through this strategic investment, Visual China will enrich and enrich high-quality content, from images and videos to 3D content, to provide customers with a full range of “one-stop” solutions; 3D content-rich landing scenarios will promote the company's coverage of customers in the film, television, animation, gaming, retail, construction and defense industries in addition to customers such as media, advertising and marketing, and Internet platforms.

The development of communication technology and terminal hardware is driving changes in content formats. In the PC era, the form of information is mainly text and pictures; in the era of mobile internet, mobile phones are the core information terminals, and images and videos are forms of information presentation. With the advent of the 5G era, depth cameras will gradually become standard equipment, 3D modeling and imaging technology will advance, and 3D holography technology may become the core content form in the 5G era. The Internet has entered the 3D era. According to WellsenNXR data, the scale of 3D content in the XR industry is expected to reach 48 billion yuan in 2030. With the development of the VR/AR industry, concepts such as metaverse have exploded, and people's awareness and expectations for 3D content have increased.

Investment advice: The company has a multi-category global content ecosystem and rich high-quality copyright content. It targets customer usage scenarios and demand layout in various fields, and has become a key central platform for integrating data, copyright, and linking upstream and downstream industries. Explore innovative AI-related business scenarios and business models based on high-quality copyright content data sets. We predict that the company's net profit from 2024 to 2026 will be 0.16/0.195/0.236 billion yuan; EPS will be 0.23/0.28/0.34 yuan; PE will be 48.7/40.1/33.0; and a “increase in holdings” proposal will be given.

Risk warning: AIGC-related technology development falls short of expectations, uncertainties in copyright-related policies, risk of performance promises made by equity investment subsidiaries, and risks associated with increased market competition.

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