Wondershare Technology Group Co.Ltd(300624) (300624)
As a leading enterprise in the creative economy facing the world, the company is expected to participate in the global trillion dollar market. 1) Wondershare Technology Group Co.Ltd(300624) is a global leader in creative economy, providing video creative software, drawing creative software, document creative software, tool software, etc. At present, the company fully embraces the meta universe and provides tools for the creators of the meta universe. 2) The meta universe market is unprecedentedly broad. According to Morgan Stanley’s prediction, the global NFT market will reach about US $300 billion by 2030. According to PwC’s prediction, VR and AR technologies are expected to bring us $1.5 trillion in GDP increment to the global economy by 2030. The core of the meta universe is the creator economy. As a shovel selling and enabling creator, the company is expected to participate in the global trillion dollar market.
The scarce meta universe “sells shovels”, self-developed and outsourced. Content and content creators are the most scarce part of the current meta universe ecology. How to reduce the development threshold, reduce the developer cost and establish the developer ecology of the meta universe has become the key to the development of the current meta universe. At the same time, the development difficulty and creation difficulty of metauniverse are higher than those in the traditional 2D era. Creators rely more on production tools, and the importance of tools is self-evident. The company explores 3D modeling, landing “virtual human”, realizes the technological leap from real person demonstration to virtual digital human demonstration, and provides production tools for meta universe creators. Based on the resource mall Wondershare filmstock, users can easily complete secondary creation with high-quality original templates, materials and design services. Incubate various studios internally, invest in China’s leading 3D visualization cloud platform realbox externally, and the joint-stock subsidiary launched a multi person collaborative design tool pixso based on cloud operation to gradually improve the strategic ecological layout of metauniverse. In addition, the company has also established the meta universe Research Institute, which is jointly developed by external universities. In the past two years, the company’s R & D personnel have increased rapidly to 818 in H1 in 2021, accounting for 57.08%, and the R & D expense rate has reached 28.22%.
Holding hands with global giants, it is expected to deepen the business cooperation of yuanuniverse. 1) The company deeply joined hands with Intel and was invited to join Intel’s creative design PC ecological chain since 2019 to upgrade Wanxing meow’s software performance based on Intel’s hardware optimization. 2) Embracing Huawei Hongmeng system, its Wanxing meow film has become the world’s first Huawei tablet equipped with harmonyos and the only pre installed video creative software. 3) Recognized by Microsoft mall, Wondershare filmora and Wanxing PDF have become applications invited to win11 store. 4) Marketing cooperation with international Internet giants such as Bing, Facebook and Google to obtain traffic diversion. We believe that all kinds of business cooperation confirm that the company’s product strength and market position are recognized by international giants. In the future, the company is expected to further deepen its cooperation with overseas giants in metauniverse technology and products.
Maintain the “buy” rating, with a target market value of RMB 12.4 billion in 2022. We predict that the company will realize revenue of 1.13 billion yuan, 1.39 billion yuan and 1.7 billion yuan from 2021 to 2023, and net profit attributable to parent company of 87 million yuan, 170 million yuan and 240 million yuan. Considering the valuation level of comparable companies, we give the company a target market value of 12.4 billion in 2022, corresponding to about 11 times of PS in 2022, maintaining the “buy” rating.
Risk tip: the landing of yuancosmic business is not as expected; Short video and vlog trend cooling risk; Risk that R & D investment is less than expected; Risk of relying on Google for product promotion; Risk of overseas market expansion.
