The rising market of cryptos has once again triggered an investment frenzy in related concept stocks.

The Smart Finance App noticed that the Hong Kong stock crypto concept - Inkeverse (03700), has recently experienced frequent abnormal price increases, with the moving averages showing a "bullish arrangement". On November 11, the price of Inkeverse soared by 20.18% to 1.37 Hong Kong dollars, reaching a new high since March 2023; on November 12, the company's stock price once broke through to 1.5 Hong Kong dollars intraday, with the largest increase this year reaching 134.7%.

Looking ahead to investing in cryptos, expecting excess returns.

On the news front, since Trump won the United States presidential election, cryptos have entered a strong upward trend. Among them, the price of bitcoin has surpassed $0.089 million per coin, hitting a new all-time high. Influenced by this, the stock prices of Hong Kong and U.S. crypto concept stocks have shown varying degrees of increase recently.

Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank, believes that after Trump's victory, the price of bitcoin will reach $0.125 million by the end of this year and $0.2 million by the end of 2025. Jan Van Eck, CEO of leading asset management company VanEck, predicts that the price of bitcoin will reach $0.3 million.

Amid a chorus of optimism towards cryptos, Inkeverse has become a hotcake in the secondary market. One of the main reasons is that Inkeverse announced a major investment decision on March 26, 2024, planning to invest $0.1 billion in purchasing cryptos over the next five years. This decision reflects the company's strategic intent and market prediction on multiple levels.

First of all, the investment in cryptos by Inkeverse shows the company's emphasis on asset allocation strategy. Against the backdrop of increasing global economic uncertainty, cryptos as a new asset class provide the company with diversification and risk hedging opportunities. As the crypto market matures and regulatory environment improves, the company is expected to achieve excess returns through crypto investments.

Secondly, in terms of fund allocation, the company plans to use approximately $60 million to purchase Bitcoin (BTC), approximately $20 million to purchase Ethereum (ETH), and about $10 million each for Tether (USDT) and USD Coin (USDC). This investment portfolio demonstrates Inkeverse's diversified investment strategy in the crypto market, aimed at risk diversification and capturing the growth potential of different cryptos.

It is worth noting that Inkeverse's crypto investments also reflect the company's confidence in the long-term value holding of the Web3.0 industry and blockchain technology. The board of directors believes that the Web3.0 industry and blockchain technology have the potential to disrupt the current financial and tech industries, with the Web3.0 industry still in an active development stage, and cryptos having long-term value appreciation potential.

This viewpoint is in line with the global fintech development trend, where many financial institutions and tech companies are actively exploring the application of blockchain technology, viewing it as a key driver of future growth. Inkeverse also has the potential to leverage blockchain technology to enhance content copyright protection, user identity verification, and payment systems, thereby improving user experience and operational efficiency.

The fundamental business foundation is solid, accelerating the establishment of new growth curves.

China Business News APP noted that prior to the surge in Inkeverse's market performance, the major shareholder Kunlun Group Limited had been consistently acquiring chips in the secondary market since September. On October 29, Kunlun Group Limited increased its shareholding in Inkeverse by an average price of 1.021 Hong Kong dollars, acquiring 2.509 million shares. The latest number of shares held after the increase is approximately 0.194 billion shares, with the latest shareholding ratio reaching 10.02%.

Major shareholders' shareholding actions usually indicate optimism about the company's long-term growth prospects and belief that the company's stock price does not fully reflect its true value. In fact, despite the significant rise in Inkeverse's stock price, its market cap is less than 3 billion Hong Kong dollars, the price-to-earnings ratio (TTM) is only 7.59 times, and the price-to-book ratio is only 0.56 times. Such low valuation levels may suggest undervaluation for a company with clear business growth potential.

According to China Business News APP, Inkeverse holds a leading position in China's interactive social platform market, with its core product, Inke Live Broadcasting, since its launch in 2015, pioneering the trend of mobile live streaming in China. Leveraging a mature operating model and continuously optimized ecosystem, Inkeverse has built a healthy and active user atmosphere, maintaining the brand advantage of Inke Live Broadcasting.

Currently, the live streaming social business centered on Yingke Live is the cornerstone business of Inkeverse and also the company's 'cash cow' business. In the first half of 2024, with the support of Yingke Live, the overall monthly active users (MAU) of Inkeverse reached 24.045 million, although down 14.4% year-on-year, the average revenue per user (ARPU) increased by 32.1% year-on-year to reach 24.5 yuan per month. This led to a 13% year-on-year increase in the company's revenues to RMB 3.533 billion, with value-added services revenue increasing by 12.4% year-on-year to RMB 2.601 billion.

Currently, Inkeverse is steadily developing its interactive entertainment business as its core, relying on the strategy of its product matrix to continue consolidating its scale advantage in areas such as live social broadcasting, steadily advancing the exploration of innovative businesses such as short dramas, and continuously accumulating experience in overseas expansion, striving to maintain steady development in a fiercely competitive market.

In the diversified business matrix built by Inkeverse, the short drama business is worth special attention. With its early entry, precise positioning, and efficient integrated upstream and downstream collaborative capabilities, Inkeverse has rapidly established a complete short drama track. According to the DataEye's Top 100 Platforms list for the first half of 2024, Inkeverse's overall ranking in the heat index places it fourth among short drama companies. As of August 2024, Inkeverse has produced over 600 micro-dramas, reaching more than 0.4 billion users, with over 70 micro-dramas generating revenues exceeding tens of millions each. In the first half of 2024, the company's revenue from micro-dramas reached 0.643 billion yuan, a 36% year-on-year increase, accounting for 18.2% of total revenue.

According to iiMedia Research estimation, the market size of China's short drama industry is expected to be RMB 48.46 billion in 2024, and the industry's market size is expected to exceed one hundred billion yuan in the next five years. Meanwhile, the overseas micro-drama market is also growing rapidly, with iiMedia Research predicting the long-term space to reach $36 billion. In this context, Inkeverse is cautiously exploring the next stage of short drama development, attempting to deeply integrate short dramas with cultural tourism, create high-quality boutique micro-dramas, simultaneously explore new overseas short drama opportunities, focus on validating commercial paths, and promote diversified development of short drama formats.

In the overseas market, Inkeverse has achieved significant results. Through the launch of two micro-drama apps - Redshort and Reelbox, Inkeverse has successfully entered international markets such as North America and Southeast Asia, and is committed to achieving localized operations.

During the internationalization process of Inkeverse's business, the company's exploration of cutting-edge technologies will provide strong support. Inkeverse previously pointed out in its mid-2024 financial report that as a step into the Web3.0 era, the company plans to strategically hold cryptocurrencies for the long term to provide underlying support for entering this emerging field. In addition, the company will continue to focus on the development of AI technology, promote AI applications through self-research and cooperation, create a unique entertainment social ecosystem, and lead the industry's future development.

It is understood that Inkeverse is actively laying out the AI+GC field to respond to industry changes and challenges. Through integrating GPT3.5 turbo and technical cooperation with Kunlun Tech, the company is actively exploring development directions such as interactive social, AI music, AI scripts, AI operations, and digital human live broadcasting. Shouchuang Securities previously pointed out that the cooperation between Inkeverse and Kunlun Tech has broadened a diverse range of interactive entertainment scenes, and is expected to promote the extension of business boundaries, becoming a new growth point.

It is worth mentioning that Kunlun Tech announced that its AI short drama platform, SkyReels, will officially launch in the United States on December 10th. This marks Kunlun Tech's further expansion in the global AI entertainment market, bringing a new intelligent short drama experience to North American audiences. This perhaps foreshadows that the cooperation between Inkeverse and Kunlun Tech will generate even greater synergies.

Overall, the sharp increase in Inkeverse's stock price is the result of the company's fundamental improvement, the surge in the crypto market, positive changes in investor sentiment, and market expectations. Looking ahead, the company's proactive layout in the fields of AI, deep exploration in overseas markets, and technological innovation and business model upgrades indicate that Inkeverse will continue to maintain a positive development momentum, achieve sustained performance growth, and expand its market. The story of the company's value growth may be far from over.