The merger and acquisition method forms the "Trident" business, and the synergy effect is remarkable. Lion technology is the core security system service and communication network service provider in Xinjiang. In 2018, the merger and acquisition of freshman interconnection and Wochi technology, the three downstream overlapping customers are telecom operators. By integrating the services of Wochi technology and freshman interconnection, the company can carry out more business around telecom operators and play synergy.
Wochi technology layout MCN business for a long time, is expected to usher in an explosive period of operation. Wochi Technology (wholly owned subsidiary of Lion Technology) is an early company in China to rely on online celebrity marketing. Wenzhou Ganglu is currently a holding subsidiary of Wachi Technology, and its brand Green Orange players have live broadcasts on Weibo Corp, Douyin, Amoy Live and other platforms. The company carries out marketing cooperation with various types of head online celebrities, and is also carrying out the incubation of its own online celebrities and the development of online celebrity brokerage business.
Integration of bulk MCN, business scale to a higher level. Different from the traditional live broadcast with goods, Wochi Technology's business model on MCN is mainly digested through one-time acceptance of large customer orders, which is divided into two parts: first, through its own traffic entrance to digest the order; second, through cooperation with other MCN institutions. Wochi Technology can take a large number of orders at once by integrating the small-scale MCN on the market to raise its order digestibility to a higher level.
Rely on a professional team to incubate tens of millions of streams of IP. In 2018, Wochi Technology began to expand its business and develop a short video and live broadcast platform. Its "Dream Factory" has a professional studio and studio.
Relying on the online celebrities signed by the professional operation team, DreamWorks has incubated a series of high-quality IP, such as "Nutcracker LJ", "Little Sun Dong handsome", "fragment Fitness 200s", "one and a half Tomatoes" and other high-quality short video IP.
Layout Taobao live broadcast field, hitch a ride with BABA. Wochi Technology is ready to cooperate with BABA Group's only MCN institution, such as Han Holdings, on online celebrity e-commerce business. The main flow entrance of Ruhan Holdings is Weibo Corp, while the main flow entrance of Wochi Technology is in Douyin. If the cooperation is successful, the resources of the two sides can be shared. In addition, Ali has put forward a goal, and its live streaming GMV is expected to account for 1gam3 of the total network sales within 3-5 years, while the company has already begun to lay out the Taobao live broadcast field in June last year, and currently ranks about 130th among MCN institutions (a total of about 2000), ranking at the top, and is expected to benefit from the industry explosion in the future, thus realizing a new round of company expansion.
Given a "buy" rating, the target market capitalization is 19.7 billion yuan in 2020. The net profit of Lion Technology from 2019 to 2021 is expected to be 125 million, 394 million and 554 million. With reference to the 80 times PE of MCN comparable Company on Saturday, Lion Technology is given a market capitalization target of 19.7 billion yuan in 2020 and a "buy" rating corresponding to 50 times PE.
Risk hint: operator expenditure reduction risk, policy supervision risk, platform policy change risk, industry competition intensification risk.