\u3000\u3000 Visual China Group Co.Ltd(000681) (000681)
[preface]
Corbis pictures was launched on the company's China Digital Collection Platform for the first time, and its own copyright received full revenue. On February 14, the work "lovers in the railway station" in Corbis, an overseas historical picture library, was launched for the first time on the company's Chinese digital collection platform "meta vision", which was taken at Detroit central railway station during World War II. Corbis picture library is the company's own copyright. The sales revenue does not need to be shared with a third party. The company will obtain full sales revenue.
Based on its own copyright, try more innovative mechanisms. Compared with the current digital collections, which are mainly in the form of online pictures, the users of "lovers of the railway station" can choose to convert them into black-and-white steel printed originals, collect them in the form of physical objects, and also obtain digital collections in the form of dynamic pictures, with more diverse mechanisms. This is also due to the fact that Corbis pictures has its own copyright and has greater autonomy in the development and design of the mechanism.
[Abstract]
The overseas digital collection market is not an oligopoly. It mainly depends on the content and platform mechanism to win. This competition pattern helps the company open the overseas market: on the content side, the company's own copyright History Library Corbis is sold in the form of digital collection, and the value of copyright assets will be revalued; On the flow / channel side, the photographer community 500px can provide the first batch of seed users to buy, and mechanisms such as secondary creation / secondary transaction will also boost the growth of transaction volume.
I. content side: the digital collection trading platform promotes the revaluation of its own copyright value. In 2016, the company acquired Corbis with RMB 525 million. Corbis was once owned by Bill Gates and Visual China Group Co.Ltd(000681) acquired the copyright assets of more than 40 million Corbis pictures. It contains a large number of pictures with historical, cultural and symbolic values that were very influential in western society in the 19th-20th century, including "mushroom cloud of Nagasaki atomic bomb", "Einstein's tongue sticking out", etc. These pictures are not only numerous, but also influential. They are recognized by the mainstream media in the United States: in 17 years, Time magazine published the 100 most influential photos since the birth of photography. According to our incomplete statistics, at least more than 1 / 4 of them came from Corbis gallery. The selection standard is the dissemination and influence of pictures, It was jointly selected by global professional curators and historians, which also shows that Corbis pictures have a strong social influence.
Through the acquisition, these 40 million pictures have become the company's own copyright assets. In March 2022, the company will launch the overseas digital collection platform soon. These 40 million pictures with high influence in western society will also become an important competitive advantage of the new platform.
The total amount of overseas copyright trading platform has reached US $14.6 billion, although the total amount of this kind of digital collection has reached US $14.6 billion in 2021. Through the research, it is found that the overseas market attaches great importance to the artistic value and scarcity of digital collections. For example, cryptopunks, a collection of 10000 art avatars, has become a popular model in the head. In addition, the mainstream digital collections in the overseas market are mainly cartoon avatars, 3D dolls and trendy pictures. Visual China Group Co.Ltd(000681) 40 million exclusive copyrights, mainly historical classic old photos, have entered the trading market of overseas digital collections for the first time. In addition to scarcity, they also have strong content differentiation.
2) there is a large space for the revaluation of the value of self owned copyright pictures: according to the rules of the digital collection trading platform, the trading platform usually charges a certain proportion of the transaction commission of the creator. From overseas, the proportion of this transaction commission ranges from 3% - 30%. For Visual China Group Co.Ltd(000681) , 40 million of its own copyright assets do not need to be shared by the creator, and most of its income belongs to the company.
When acquiring 40 million pictures in 2016, the evaluation agency divided the pictures into four levels: Classic / important / Archives / ordinary according to popularity, scarcity and historical value. Among them, the classic level has the highest popularity and scarcity, with a total of 628, including Einstein's tongue sticking out, Wright brothers' test flight aircraft, telephone inventor Bell's first test phone, etc; A total of 122000 important level tickets, including "1984 Michael Jackson concert" and so on; 442500 files in total, including "Michael Jordan in dunk" and so on; There are more than 40 million ordinary grade sheets, which have not been completely sorted out at present. In the acquisition evaluation report, the evaluation price of classic / important / file ordinary pictures is only 4800 yuan / 480 yuan / 0.16 yuan respectively. At present, the overseas digital collection trading platform foundation mainly deals with digital collections with high artistic value. Based on the sampling analysis of the transaction price on the foundation platform, we can also divide it into four price grades: the highest grade (corresponding to the classic grade of 40 million pieces) / medium and high grade (corresponding to the important grade) / medium and low grade (corresponding to the file grade) / the lowest grade (corresponding to the ordinary grade), and the average price is 41000-48000 / 24000-34000 / 12000-15000 / 22000-12000. It can be seen that the price of medium and high grade / medium and low grade / lowest grade on the foundation is much higher than the evaluated unit price of Corbis important grade / file grade / ordinary grade. In particular, more than 40 million ordinary photos of Corbis have not been edited and excavated at present. In the future, it is expected to realize the continuous growth of value through fine screening, operation and publicity.
Therefore, we believe that with the official launch and operation promotion of Visual China Group Co.Ltd(000681) overseas digital collection platform, the company's existing 40 million self owned copyright assets are converted into digital collections for sales, and its commercial value and potential income space for the company are significantly improved compared with the acquisition price of 525 million in 2016.
II. Platform / community side: the photography community 500px provides a trading platform
In 2018, the company wholly acquired the overseas photographer community 500px. Founded in Canada in 2009, 500px is a world-famous photography community. At present, it covers 195 countries / regions, has more than 17 million members, has more than 400000 contracted photographers, and has uploaded more than 230 million pictures as of 1q21. In March 2022, the company's overseas digital collection platform will also be built mainly based on the 500px platform. At present, in the overseas market, in addition to the head platform opensea, which has a cumulative trading volume of more than 10 billion US dollars, foundation / superare and other platforms can obtain a trading volume of more than 100 million US dollars. As a new entrant, Visual China Group Co.Ltd(000681) , in addition to having scarce content resources, the photographer community 500px can help the company realize the "cold start" of the platform to a certain extent and obtain users and traffic at low cost.
1) high activity of 500px photographer members: according to similarweb, the jump out rate of 500px overseas official website in 4q21 is lower than that of similar websites, and the average use time of a single person is also higher, reflecting the strong attraction of 500px to users.
These photographers' member users have a higher awareness of legalization and a higher awareness of scarce copyright resources. We believe that the accumulated member users of 500px platform will hopefully become the first buyers of the company's digital collections.
2) the buyer is also the Creator: Based on the community attribute of 500px, the transaction attribute of the digital collection platform, and the active secondary transaction abroad, with the gradual maturity of the digital collection platform, some top photographers are expected to be transformed into the creators of the digital collection, At present, we have seen this trend on the Chinese platform: the digital collection cyberpunk changing2022 by 500px photographer Wang Junyan has been sold on the company's Chinese platform "meta vision", completing the transformation from photographer to creator of digital collection platform.
3) secondary transaction and secondary creation: the secondary transaction mechanism of digital collections can open the liquidity of collections, and all parties can obtain convenience and income. Among them, the creator can obtain incremental copyright fees again, and the Buyer / seller can also realize the transaction at the ideal price, which not only stimulates the continuous supply of creation in the primary market, but also increases the willingness of users to buy. The secondary creation mechanism can bring more fun to buyers. For example, the digital collection Avatar "Gede" on limited sale in the early stage of station B supports users' secondary creation, and the overseas 10ktf platform supports buyers' secondary processing and design on the basis of the original digital collection. The digital collection will also be more personalized. In addition, the new "derivatives" born after secondary creation can continue to be sold, which also helps the holders of digital collections realize greater value. The digital collection trading platform based on 500px also has better conditions for secondary trading and secondary creation. First, secondary trading in overseas markets is very active. The number of transactions between the two trading platforms is about 10% / make / place, which leads to a higher transaction fee ratio than that of the other trading platforms (about 10% / make / place, which is about 25%). Secondly, the core of secondary creation is also the creator community. The value of secondary creation can be highlighted through the communication and inspiration between communities and creators.
III. competition pattern of Overseas Digital Collections: the trading volume of opensea has reached a new high, and characteristic platforms emerge one after another
At present, the overseas digital collection platform presents a situation of "one super and many strong". Among them, opensea has the largest trading volume, which is based on opensea's open and unrestricted platform and trading attributes. Any user can become the creator of digital collections, which also improves the richness of the platform's supply side. However, opensea does not completely monopolize the market. In addition, foundation / superare / makerplace / Zora and other emerging platforms have also developed rapidly. The cumulative trading volume of cryptopunks / superrare / foundation, the main art platforms, has exceeded US $100 million. Different from opensea, other platforms have more distinctive characteristics. The main categories of foundation / supermare transactions are collections with high artistry. In terms of establishment time, opensea was established in 2017, and foundation / superare / makerplace / Zora were established in 2021 / 2018 / 2018 / 2021 respectively. It can be seen that the overseas digital collection market is in full bloom. Although it has not been established for a long time, it has achieved rapid development.
The rapid development of these platforms comes from the characteristics of overseas digital collection market and its users (buyers):
1) user source: mainly natural flow. According to the statistics of similarweb, the traffic of six main platforms such as foundation, supermare and opensea mainly comes from users' direct entry (natural traffic). We believe that this is closely related to the blockchain gaining more public recognition in the past few years, the rising price of bitcoin and the copyright awareness of overseas users.
2) collection content: pay attention to scarcity and artistic creativity. Head works often have well-known IP blessings. For example, among opensea platforms, sorare, a digital card platform with IP of head football clubs such as La Liga and Real Madrid, leads in sales; Without the help of well-known IP, digital collections can also obtain high transaction volume with their own creativity and artistry, among which the most representative is the art avatar series cryptopunk. Cryptopunks is a collection of artistic avatars with pixel painting style generated by the algorithm. Each collection forms different rarity according to different attributes such as type (such as abnormity, ape shape, zombie shape), headdress, beard and so on. Among them, the types with the highest sales include portraits, aliens and zombies. According to non fungible, cryptopunks has accumulated sales of more than $2 billion so far.
3) platform mechanism: there are both fully open platforms and invitation platforms. The head platform opensea is completely open at the UGC creation end, while the art digital collection represented by foundation is mainly based on the invitation system.
IV. investment suggestions: the digital collection platform is an important incremental business of the company. At present, the total sales of China Yuan vision platform, which has been online for two months, has reached 5 million yuan; The overseas platform can be launched in March. The company has strong resource endowment on the digital collection platform. 40 million self owned copyright pictures have great potential for realization and will be revalued; 500px social platform can obtain users and traffic at the front end and promote the increase of transaction volume.
At the same time, after the adjustment of the company's original picture copyright sales business, the business has recovered rapidly, and the leading position in China's industry is still stable. Regardless of the incremental income of new business, we expect the company to achieve revenue of 720 / 960 / 1190 million in 21-23 years, with a year-on-year increase of 26.2% / 33.5% / 23.7%, and the net profit attributable to the parent company is expected to be 194 / 254 / 319 million, with a year-on-year increase of 36.8% / 31.4% / 25.4%. The P / E ratio of the latest market value corresponding to the estimated net profit is 61 / 47 / 37x respectively, which is recommended.
