Stock Code: Wondershare Technology Group Co.Ltd(300624) SZ Wondershare Technology Group Co.Ltd(300624) 2021 Annual Report
April 2022
Dear investors
hello everyone!
The spring breeze is warm in March, and the flowers are red and the willows are green! In this warm spring season, I am very happy to meet with all investors again by letter, summarize the past, look forward to the future, and jointly discuss the development plan of Wanxing for a century. First of all, on behalf of the board of directors and the management, I would like to express my heartfelt thanks to all shareholders for their understanding and support for the development of the company! Thank you for your various suggestions and opinions of Wondershare Technology Group Co.Ltd(300624) Chairman Wu taibing during the development of the company! I would also like to thank all wise investors for choosing Wanxing and continuing to travel all the way!
In the past 2021, the epidemic was still raging, and the global economic and political situation was more complex and changeable. In the face of the uncertain business environment caused by investors, all colleagues of Wanxing worked hard to cope with the impact of many adverse factors, such as the decline of flow dividend and the continuous rise of the exchange rate of people’s letter and people’s currency against the US dollar, so as to achieve a steady increase in the company’s annual revenue in 2021, successfully exceeding the mark of RMB 1 billion, calculated according to the caliber of US dollars, The annual revenue increased by 11.40% year-on-year. A letter 2021 coincides with Wanxing’s 18-year-old adult year. We focus on strategy, focus on the following aspects, carry out to investors and achieve certain results:
First, focus on the creator economy, deeply cultivate the main channel of digital creative software dominated by video creative software, and actively explore opportunities related to the meta universe.
As early as 1996, Bill Gates predicted that the essence of the Internet is that content is king. With the development of IT technology represented by the Internet, the content of the Internet is rapidly evolving from the past graphic era to today’s video era and the future meta universe 3D era, and attracting a large number of new generation creative workers to become the main force of content creation, The creative software industry of service and empowerment creators is ushering in a golden period of rapid development. According to the forecast data released by Adobe research, the global market capacity of creative software and services is expected to reach US $63 billion in 2024, with a significant increase of 50% based on the market scale forecast of US $41 billion in 2023. In 2024, the potential user scale of global creative software is expected to sprint to 5 billion, including about 68 million professional designers, about 900 million semi professional creators focusing on opinion expression and marketing communication, and about 4 billion ordinary users focusing on entertainment consumption. The market space and user scale are expanding rapidly.
In 2021, the company’s management reviewed the situation and vigorously expanded the layout of creative software products dominated by video creative software. Internally, the company continued to consolidate the base of video technology, completed the product implementation of a new generation of video technology engine Wes, strengthened the research and development of key technologies in the field of computer vision and audio, especially the research on AI algorithm technology based on 2D and 3D graphics and images, and realized Wondershare democreator, anirel, filmora V11 and media IO and other new software development and launch. Externally, the company invested 214 million yuan to strategically hold Hangzhou Gexiang Technology Co., Ltd., a star enterprise of mobile video software with 1 billion users. So far, the company has realized the full coverage of “cloud + desktop + Mobile” in the field of video creative software, and gradually penetrated into each subdivided scene. At present, video creative software contributes more than half of the company’s revenue and has become the company’s core and most potential business.
At the same time, with the advent of the new era of the meta universe and the continuous evolution of the creator’s economic ecology, the company also continues to explore the layout of products related to the meta universe. Wanxinglu, the company’s Pan knowledge video creation software, has launched the “virtual human” function
A letter can realize the technological leap from real person demonstration to virtual digital human demonstration. Foreign investment in innovative technology companies, such as realbox, China’s leading real-time 3D cloud platform to investors, and established joint research studios with many well-known universities to jointly develop new technologies, new applications and create new tools. In addition, we are also continuously increasing the R & D investment in document creativity and drawing creative products to ensure the competitive advantage of the company’s products in each subdivided creative software market.
Second, continue to promote the construction of middle platform, build an internal entrepreneurship incubation support system of creative software suitable for small team entrepreneurship, and promote the large-scale replication of the company’s front-end product innovation team and the rapid layout of each creative software subdivision track.
With the rise of Creator economy, the scale of creative software market expands rapidly, the industry segments are wide, and the product categories are complex. At the same time, the needs of users in the creative software market are changing with each passing day. How to build an organizational structure that can not only maintain the flexibility of small teams, but also take into account the high-efficiency empowerment of large platforms is an important proposition for the company to realize its next development. Therefore, the company has long put forward the business development concept of “large platform, medium-sized products and small team”, hoping to realize the large-scale innovation of products in digital creative software and promote the great leap forward development of the company by strengthening the two-wheel drive strategy between the middle stage of the group and the front desk of the replication division.
In 2021, we will continue to promote the construction of technology platform based on multimedia technology, continue to upgrade the company’s technology innovation center, and increase the introduction of high-end technical talents in the industry. At present, the whole team has nearly 100 people, including many doctors in audio algorithm, codec, video algorithm and AI. The company invested more than 70 million in technology in the whole year. This year, we independently developed and introduced a number of multimedia algorithms and technologies, and applied for and distributed a series of patents at home and abroad related to the company’s main business.
In 2021, we will continue to strengthen the construction of global marketing platform, actively respond to the negative impact of the decline of traffic dividend, constantly explore the blue ocean of traffic, and promote the localization, mainstreaming and upgrading of marketing team. Over the past year, the company has continued to cultivate markets in the United States, Japan and Europe, and continuously cultivated markets in Asia, Africa, Central America, South America and other countries and regions dominated by China and South Korea. Multiple language markets have continued to develop rapidly, among which the sales revenue in China has increased steadily, accounting for about 12% of the company’s software sales revenue. In addition, the number of new agents of the company increased by 243% year-on-year, new customers covered a number of world top 500 and industry leading companies, and the sales revenue of global government and enterprises increased by 64% year-on-year. The impact of overseas single market and single channel on the company’s revenue continues to decrease.
In 2021, we will continue to promote the construction of the company’s talent center, attract local elites with the business philosophy of “integrating global talents and serving the global market”, and provide a stable talent supply chain for the internal entrepreneurship of the front office business department. Adhering to the layout idea of “where talents are, where offices are”, we have continuously expanded regional operation bases. At present, the company has built operation bases in Shenzhen, Beijing, Hangzhou, Zhengzhou, Vancouver, Tokyo, Xi’an and other places. Changsha, as the company’s largest operation center in the future, has nearly 500 employees. We always adhere to the recruitment strategy of double high talents. On the one hand, we pay attention to the school recruitment of high potential talents and the social recruitment of high-end talents, reserve strategic talents in advance and continuously improve the talent density. By the end of 2021, the company had nearly 1400 global talents.
In 2021, we will continue to focus on platform capacity-building on the one hand and internal entrepreneurship on the other. Through the implementation of the “EMU” partner internal entrepreneurship promotion plan, on the one hand, more entrepreneurs will be attracted to join Wanxing, on the other hand, employees in the company will be encouraged to upgrade to business partners of each front office business department to share business success. By the end of 2021, 14 business units (Studios) within the company have engaged in creative software innovation and entrepreneurship in different directions. The internally incubated R & D and design collaborative software has obtained nearly 100 million yuan of pre-A financing from CICC. The company’s internal innovation and entrepreneurship atmosphere has become common, and the team vitality has been greatly improved.
Third, comply with the development trend of the software industry, comprehensively promote the SaaS transformation and upgrading of various businesses, and actively leverage massive resources and cloud services to enable the new generation of digital creativity.
A letter SaaS is the future of software. In the future, all successful software enterprises will be SaaS enterprises. By the end of 2021 to investors, the number of monthly active users of all products of the company has reached nearly 100 million, and is still growing rapidly. It has a good user base to promote the subscription system. This year, while constantly improving the user stickiness of end products, we also continued to strengthen the construction of cloud platform, introduced the full link user journey experience management system and developed a user subscription management platform, which provided a solid technical foundation for comprehensively promoting the subscription system. At present, the company’s cloud platform R & D team has more than 100 people, with an annual investment of tens of millions of yuan. This year, focusing on the needs of users, we continued to promote the construction of filmstock material resource library through self-research and external cooperation. At present, there are more than 100000 resource material particles, which can basically meet the personalized video creation needs of users all over the world. In 2021, the company’s subscription revenue accounted for nearly 60% of the total revenue, of which the renewal revenue has accounted for 24.3% of the total revenue. SaaS transformation has achieved initial results.
2021, which has just passed, is a year of large-scale development of the company’s team and large layout of business investment, but it is also a year with the greatest profit pressure since the establishment of Wanxing. We increased our R & D layout. In this year, the company’s annual R & D investment reached 328 million yuan, accounting for nearly one-third of the operating revenue in the same period, an increase of 110 million yuan or more than 50% compared with the expenditure in 2020,
