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The company is a company that provides AR/VR content and services. In terms of revenue, the company ranks first in China's AR/VR content and services market, with a market share of 2.6% in 2021. Among them, the service business ranks first in the market in terms of income, with a market share of 13.5%. According to iResearch, the market size of China's AR/VR content and services in 2021 is 21.7 billion yuan, which is expected to increase from 35.7 billion yuan in 2022 to 130.2 billion yuan in 2026, with a compound annual growth rate of 38.2%. Analysis of its business, 1) AR/VR marketing service business is the company's main source of income, the company provides AR/VR content modules and development tools to help customers place advertisements, and then charge customers according to service performance and operating results. AR/VR marketing services have been provided to more than 50 advertisers, accounting for about 50 to 70 per cent of revenue.
2) AR/VR content, that is, to provide customized content according to the needs of customers, and charge customers an one-time fee when providing content products. It accounts for 20% to 30% of income. 3) AR/VR SaaS, the company's AR/VR SaaS platform enables customers to generate, publish and utilize relevant AR/VR content, while charging customers to order products or solutions, accounting for 5% of revenue. During the track record period, the company's revenue grew rapidly, from 251 million yuan in 2019 to 595 million yuan in 2021, with a compound annual growth rate of 53.9%. The profit increased from 41.9 million yuan to 71.7 million yuan.
Overall, the company commercializes its AR/VR service platform through advertising and customized services, while the industry still has a large demand for content, and there is also huge room for growth in the future. After listing, the company's market capitalization is about 4.63 billion Hong Kong dollars, corresponding to 2021 PS about 6 times, PE about 60 times, the valuation is reasonable, so it is recommended to apply carefully.