At present, the Hong Kong stock IPO market is still hot. Recently, a major partner of global technology giants such as Facebook Inc and Google has just handed over the watch, which has quickly attracted our attention. This company is called Feishu Shennuo. According to the company's prospectus, the total transaction volume of Feishu Shennuo has increased from US $1.377 billion in 2018 to US $3.765 billion in 2020, with a compound annual growth rate of 65.3%. According to the total transaction volume of US $3.765 billion in 2020, Feishu Shennuo ranks first among China's overseas digital marketing service providers with a market share of 20.5%.

In recent years, with the success of the technology giants represented by byte jump, the trend of domestic enterprises "going out to sea" has intensified, coupled with the accelerated pace of digitalization and intelligence of the traditional manufacturing industry. a number of third-party digital marketing service providers with technical genes are on the rise and sprint the capital market, which has been paid more and more attention by mainstream funds.

At present, in the field of overseas digital marketing, there are a number of listed companies, including Hong Kong stocks$remittance Technology (01860.HK) $, A shares$Blue cursor (300058.SZ) $There is also the easy point world that is lining up to sprint A shares. Blue cursor has been on the rise as a whole in the past two years, while Huilun Technology, which has been dormant for two years, ushered in a sharp rise at the beginning of this year, while the trend differentiation reflects the essential differences at the operational level. Huilun Technology is mainly for APP developers, from overseas marketing services-oriented, to two-way resource integration, overseas to Southeast Asian markets. As an established advertising company, Blue cursor has a wide range of business coverage. In contrast, Feishu Shennuo has its unique features, blue cursor business diversification, Feishu Shennuo more focused on the field of digital marketing, Huishuo technology to APP developers, while the media is mainly medium and long tail, while Feishu Shennuo's customer group type is more yuan, and the media is mainly head. In addition, compared with the easy point of the world, Feishu Shennuo is obviously superior in scale.

What is the quality of Fei Shu Shen Nuo as a "bellwether"? You might as well take it apart.

Driven by two major business models, covering four sea scenarios

Two major business models

Feishu Shennuo was officially founded in 2013, focusing on providing one-stop overseas digital marketing solutions for domestic customers, involving demand analysis, creative design and solution development, internal testing and advertising, quality control and feedback optimization, to achieve digital marketing full-link services, including customized solutions and SaaS services, which can meet the customized needs of major customers. It can also adapt to the standardization needs of small and medium-sized enterprises and help overseas customers to achieve links with target customers around the world.

On the one hand, provide data and technology-driven solution services for major customers, including optimization, multimedia creativity, KOL marketing strategy, advertising positioning strategy, content management services, technical and account support, and other offline activities

On the other hand, it provides automated "customization" services for SME marketing customers through the proprietary SaaS platform, including opening accounts, formulating marketing solutions, providing creative designs, and connecting with media partners through the API interface to provide advertising delivery, thus providing support for the whole process of digital marketing.

Customers cover four mainstream types of going out to sea, and the annual renewal rate of the top 30 customers is 100%.

Feishu Shennuo's customers are more diversified, covering games, e-commerce, APP and brand four mainstream types of overseas enterprises, which makes it have a strong ability to resist cyclical risks.

According to the prospectus, Fishu Shennuo served 824, 1295 and 3696 customized solution marketing customers from 2018 to 2020, respectively. The "Top 50 Global Brands in China" list jointly released by Google and Kartar in 2020 includes a series of well-known Chinese brands active on the global stage, including: BABA, Xiao Hongshu, XIAOMI, Trip.com, Hainan Airlines, China China Southern Airlines Company, DJI, China CCTV and ANTA Sports Products, most of these brands are Feishu Shennuo customers.

According to different business models, the number of marketing customers of Fishu Shennou customized solution increased from 824 in 2018 to 3696 in 2020, and the average number of monthly active users of SaaS marketing customers increased from 194 in 2018 to 1956 in 2020.

As it covers marketing customers of different sizes, Feishu Shennuo's strategy is to accompany marketing customers to grow together, so major customers continue to maintain high contract renewal rates. According to the prospectus, the annual renewal rate of the company's top 30 major marketing customers was 100 per cent from 2018 to 2020. Over the same period, the average marketing expenditure of the top 30 major marketing customers through the company continued to rise, at $31.5 million, $52.8 million and $63 million, respectively.

The advantage of differentiation is obvious, the three core competencies are obvious.

According to the research and comparison of other similar companies in the past, it is not difficult to find that the core competitiveness of third-party digital marketing service providers is usually reflected in the dimensions of media, technical data and resource integration.

First, the long-term cooperative relationship with the global mainstream media is stable and mutually beneficial

Since its inception, the company has gradually established and maintained stable relationships with mainstream social media and search platforms around the world.

According to the prospectus, Feishu Shennuo 2014 has become the second Chinese dealer for Facebook Inc, the following year for Google, in 2016 for Pinterest, in 2018 for TikTok, and the second for Snapchat in 2019. By 2020, the company has become the number one distributor of Google and Facebook Inc in China in terms of total transaction volume, and is also one of the only two distributors of Snapchat in China. At present, Feishu Shennuo has established strategic and direct cooperation with 13 mainstream media partners, including Facebook Inc, Google, Twitter, Pinterest, Tiktok, Snapchat, Apple Store, LinkedIn, Outbrain, Criteo, Taboola, Reddit and LINE. Cross-media layout not only helps to reach more traffic, provides customers with a more flexible and effective combination of choices, but also avoids the dependence on a single platform. Feishu Shen promise to maintain a long-term cooperative relationship with the mainstream media, but also protect their own future certainty and growth advantages.

It is worth mentioning that the company and these mainstream media partners are mutually beneficial: on the one hand, the global platform represented by Facebook Inc and Google has a huge user base, a wide audience and advantages for expanding customers; on the other hand, Feishu Shennuo links all kinds of domestic overseas enterprises, which can expand the Chinese advertising market for global media partners such as Facebook Inc and Google.

Second, the technical background is heavy, and the proportion of investment continues to increase.

Digital marketing is a business driven by key technologies such as big data and AI. The logic behind this business is to improve advertising efficiency and match accuracy with the audience through technology, so as to improve the ROI of marketing customers and get more marketing budget. Feishu's achievements in technology are also obvious to all. Through customized solution services, SaaS services and other marketing services, Feishu provides comprehensive digital marketing solutions with technology and data empowerment to marketing customers of different sizes and stages.

Taking the different stages of marketing for small and medium-sized enterprises as an example, the company has developed a complete set of service platforms, including SaaS platform Feishu, creative design platform Creative Booster, data analysis tools and display platform Intelligence Center, NLP-based chat robot Meetbot and a series of advertising management tools (such as AdTinker, KeyBid, Eagle Eye, X-Ray and UA Growing) to provide efficient services for marketing customers and continuously improve customer experience and marketing performance.

In addition, for Feishu Shennuo's industry, the necessary R & D investment is the key element to continue to build core competitiveness. The company has been increasing its R & D investment in recent years. According to the prospectus, from 2018 to 2020, Feschenuo's R & D costs were US $1.851 million, US $5.073 million and US $9.335 million respectively, with a compound growth rate of 125 per cent in the past three years. The proportion of R & D expenditure in the total contract revenue is 5.4%, 8.0% and 15.7%, respectively. Judging from the current trend, it is believed that Feishu will continue to increase its R & D expenditure in the future. With the gradual expansion of Feishu Shennuo's business scale and the diversified trend of customer demand, the future development will be more dependent on technical support, so it is more necessary to increase investment in underlying infrastructure such as IT architecture, which is also confirmed in the company's prospectus strategy.

Third, the scale effect is prominent, and the average annual compound growth rate of total transaction volume is 65.3%.

This is mainly reflected in the two dimensions of transaction size and market share: on the one hand, the total transaction volume increased from $1.377 billion in 2018 to $3.765 billion in 2020, with an average annual compound growth rate of 65.3%, leading the industry. On the other hand, during the corresponding period, the company's market share increased by 9.2 percentage points from 11.3% to 20.5%, with an average annual compound growth rate of about 34.7%, and ranked first among China's overseas digital marketing service providers.

The rapid increase in transaction size and market share also highlights the high growth stage of Feishu Shennuo. In the future, with the continuous development of the company, the scale will continue to expand, and gradually reflected in the revenue and profit end.

Looking to the future, the sea digital marketing market space is large, coupled with the company's leading position, so the future growth certainty is strong.

At present, the domestic overseas digital marketing market is still in the stage of rapid growth. According to the iResearch consultancy report, China's overseas digital marketing spending will be US $18.3 billion in 2020 and is expected to reach US $50.2 billion in 2025, with a corresponding compound annual growth rate of 22.3%.

In the field of digital marketing in China, Feishu has become a leader in the industry because of its leading scale in the industry. Coupled with the early layout of the company, it has established a long-term and stable cooperative relationship with global Internet giants such as Facebook Inc and Google, which have an absolute market share advantage, and has achieved a global layout, providing customers with localized service support by setting up local offices. Therefore, in the future, as more and more enterprises make efforts in overseas markets, the demand for digital marketing will continue to be released. Feishu Shennao will be the first beneficiary.

Conclusion

Obviously, the domestic flow dividend has already peaked, and "going out to sea" is also the trend of the times. at the same time, catalyzed by the epidemic, the "digitization" of the whole industry has been accelerated, and the digital marketing market behind enterprises going to sea has a bright future.

Throughout the capital market, the industry listed companies are mostly concentrated in Hong Kong stocks, although there are differences in the development path and landing model, but the bottom business logic is the same. On the one hand, it relies on data and technology-driven to continuously improve the ROI of advertisers; on the other hand, the ROI that determines budget allocation not only depends on continuous technology investment, but also requires sufficient traffic (data) scale, that is, there is an obvious "flywheel effect" in business operation. From this point of view, the scale of the leading Fei Shu Shen Nuo, its success can be seen.

Further, under the application cycle of 5G new technology, the key technologies represented by big data and AI will greatly develop, and further promote the evolution of the digital marketing industry to the stage of commercial intelligence, and the leading companies in the industry will also upgrade their own model and open up a new growth curve.