With The Explosive Growth of the AI Industry, WIMI Hologram AR Is Expected To Become the Leader in 5G Holographic AI

NEW YORK, NY / ACCESSWIRE / June 30, 2020 / Thanks to the progress of artificial intelligence and the innovation of deep learning and intelligent algorithm, the application field of computer vision has made great strides in recent years, and has surpassed human beings in some specific tasks in terms of detection, recognition and intelligent processing. WIMI, as a representative of the holographic vision field, launched its IPO on NASDAQ on April 1 (EASTERN TIME) under the symbol WIMI and publicly issued 5 million ADS. Institutional shareholders are Shengshijing Investment, Singapore Dahua Venture Capital, Yingke Capital and so on. At the core of WIMI's business is holographic AR technology, which is used in software engineering, content production, cloud and big data to provide customers with AR based holographic services and products.

Data show that WIMI cover from the holographic AI computer vision synthesis, holographic visual presentation, holographic interactive software development, holographic AR online and offline advertising, holographic ARSDK pay, 5 g holographic communication software development, holographic development of face recognition, holographic AR technology such as holographic AI development in face of multiple links, have one-stop service ability. At present, it has grown into one of the leading holographic cloud integrated technology solution providers in China.

International Data Corporation (IDC), an international authoritative market analyst, recently released a report on the Tracking of Artificial intelligence Software and Applications in China (the second half of 2019). According to the report, China's AI software and application market will reach $2.89 billion in 2019, with the overall market including hardware reaching $6 billion. By 2024, China's AI software and application market will reach 12.75 billion US dollars, with a compound growth rate of 39.0% from 2018-2024.

IDC report pointed out that due to the impact of the epidemic, in the short term, the stimulation of AI applications will lead to market growth, but in the long term, the epidemic will also affect the financial, Internet industry and other fields. This led to the artificial intelligence market size in 2020, the growth is expected to adjust to 26.5%. 2021-2022 will see rapid growth again, and it is estimated that the market forecast of 2023 will not be reached until 2024.

Data from China Artificial Intelligence Software and Application Market Semi-Annual Research Report (2019H2)

The report also covers the field of computer vision, noting that the Chinese market for computer vision applications reached $14,56.4 million in 2019. According to Shen, computer vision applications will develop rapidly in 2019 and show greater growth potential in government, finance, Internet and other industries in the future.

In recent years, computer vision has become a remarkable application field of artificial intelligence. Computer vision belongs to the field of computer science, which focuses on replicating some of the complexity of human vision system and enabling computers to recognize and process objects in images and videos in the same way as humans.

WIMI is the leading holographic AR application platform in China in terms of total revenue in 2018, according to Frost&Sullivan. By leveraging its strong technical capabilities and infrastructure, it is able to deliver superior products and services and conduct its business in an efficient manner. At the core of WIMI's business is holographic AR technology, which is used in software engineering, content production, cloud and big data to provide customers with AR based holographic services and products. The products mainly include (I) holographic AR advertising services and (ii) holographic AR entertainment products. In 2019Q1, about 80.3% of revenue comes from holographic AR advertising services and 19.7% from holographic AR entertainment products.

1. Revenue

Revenue from main business: revenue in 2017, 2018, the first quarter of 2018 and the first quarter of 2019 are 192 million, 225 million, 49 million and 78 million respectively. Year-on-year growth was 17.3 percent in 2018 and 59.5 percent in 2019Q1.

AR advertising revenue: revenue in 2017, 2018, the first quarter of 2018 and the first quarter of 2019 are respectively 133 million, 181 million, 34 million and 63 million.

Revenue of AR entertainment business: 59 million, 44 million, 15 million and 16 million respectively in 2017, 2018, the first quarter of 2018 and 2019.

AR advertising services account for about 80% of the total revenue, and the rapid growth of the overall revenue is mainly driven by AR advertising services. The rapid growth of AR advertising service mainly comes from the increase of both customer number and customer unit price. In 2018, there were 49 customers in Q1, with an average revenue of about 700,000 yuan. There are 65 customers in the company, and the average income of each customer is about 1 million yuan (RMB, the same later). There were 97 customers in 2017 and 121 in 2018, with average revenue per customer rising from 1.4 million to 1.5 million yuan (average revenue per customer is calculated by dividing the total AR advertising revenue by the number of customers). The increase in average revenue was largely due to technology improvements that allow more content to be embedded in advertising. In 2018,AR advertising service has 36 customers with a single customer income of over 1.5 million, accounting for 29.8% of the total customers. In 2017, there were only 20, accounting for 20.6% of the total number of customers. In addition, the company's customer retention rate (defined as the percentage of customers who buy more than once during a specific period of AR advertising business) 19.6 percent in 2017 and 30.6 percent in 2018. The growth of customer retention rate reflects the satisfaction of customers with holographic AR advertising service, which leads to the increase of customer unit price and customer number.

Chart :WIMI main Business Revenue (100 million)

Source: Prospectus, China Merchants Securities

2. Factors affecting operating results

Net profit: 73 million yuan, 89 million yuan, 22 million yuan and 37 million yuan in 2017, 2018, 2018 and 2019. Corresponding net profit margins are 38.19%, 39.60%, 45.15% and 47.77%, respectively.

Chart :WIMI net profit (100 million YUAN) and net profit margin

Source: Prospectus, China Merchants Securities

WIMI Hologram Cloud (NASDAQ:WIMI) believes that the most important core element of the holographic AR industry is research and development related to technology development. Technological advances related to holographic AR will bring holographic AR experiences, new services, products and capabilities to a new stage of development. In order to retain existing customers, attract potential customers and keep up with the growth of WIMI's business, WIMI must continue to innovate and promote the development of cutting-edge technologies. WIMI's current research and development efforts focus on augmented reality artificial intelligence, augmented reality and image processing, intelligent hardware and photosensitive signal transmission to create new services and products.

3. Income components

WIMI's revenue includes REVENUE from AR advertising services and AR entertainment. AR advertising services use holographic materials and are integrated into ads on online media platforms or offline displays. WIMI generates revenue when the services are delivered under the specific terms of the contract, which are usually based on the specific actions shown online (i.e., cost per impression (" CPM ") or cost per action (" CPA ") and the duration of service shown offline. More than 90% of WIMI's contracts with customers are based on CPM.

AR entertainment revenue includes software development Kit (" SDK ") payment channel services, software development, mobile game services and technology development. When the user completes the payment transaction of SDK payment, relevant revenue will be generated after deducting the payment to the content provider. WIMI Hologram Cloud (NASDAQ:WIMI) makes money from selling software development services. Revenues generated by mobile games include royalties paid by mobile game licensees and fees collected from game developers who use game portals.

4. AR holographic industry value chain

Holographic AR industry value chain consists of three main parts. The upstream segment refers to the key hardware, software, services, and providers and participants associated with content production. Midstream participants are providers of holographic AR solutions that integrate upstream hardware and software systems to form final products or solutions such as holographic AR advertising platforms and head-mounted displays. Downstream refers to end users, including governments, businesses, and home/individual consumers.

The business models of the upstream participants in the holographic AR market are different. While hardware, software, and service providers focus on research and development to further improve their core technologies and reduce production costs, holographic AR device integrators and content creators must also identify target users, build brand reputations, and enhance user experiences. It is common for some holographic AR device integrators to have strong internal research capabilities and play a role in the upstream and midstream markets.

WIMI is currently involved in the upstream segment, which includes developing software, providing content production technology and creating and distributing content, and the midstream segment, which provides holographic AR solutions.

5. Competitive advantage

WIMI has the leading AR holographic application platform in China. WIMI is already the leading holographic AR application platform in China in terms of revenue in 2017, according to Frost & Sullivan. In addition, according to the data of Frost & Sullivan, WIMI has established a comprehensive and diversified holographic AR content library among all holographic AR solution providers in China in 2018. In terms of revenue, number of customers, holographic AR content, and the number of holographic AR patents and software Copyrights, WIMI Hologram ranks first in the holographic AR industry in China. As of December 31, 2018, WIMI has approximately 4,654 AR holographic content, 106 software Copyrights and 180 registered patents. WIMI is committed to using holographic technology to meet the entertainment and business needs of customers and end users. WIMI currently operates a holographic AR application platform that covers a particularly wide range of holographic AR product types in China, according to Frost&Sullivan. The WIMI portfolio is a key differentiator.

The AR industry is getting more and more attention from investors. WIMI, as the industry leader, has so far successfully completed some investor financing and enjoys the economies of scale from lower costs per unit of output. WIMI's ability to deliver premium AR content enables customers to continue to adopt our AR technology. WIMI's market position and corresponding marketing capabilities can help WIMI build an industry-wide brand image across various market segments.

6. Development vision

WIMI plans to continue to improve and strengthen existing technologies to maintain industry leadership and create ecological business models. Currently, WIMI's holographic face recognition technology and holographic face change technology are being applied to existing holographic advertising and entertainment businesses, and the technology is also being upgraded to make breakthroughs in more industry fields. WIMI aims to build a commercial ecosystem based on holographic applications. According to the prospectus, it has invested in more than 17 high-quality enterprises in the upstream and downstream of the industrial chain. The fields involved include: holographic AR interactive component design, holographic AR optical component development, holographic AR image development, holographic AR hardware/software development, holographic AR application development and holographic AR platform construction and other related industry enterprises.

WIMI Hologram Cloud (NASDAQ:WIMI) intends to continue to invest significant resources to enhance its ability to develop holographic AR content. WIMI is committed to enriching the holographic content portfolio and providing its customers and end users with a high quality holographic experience. WIMI plans to continue to expand the holographic content library in various ways.

With the advent of 5G era, WIMI Hologram Cloud (NASDAQ:WIMI) expects to cooperate more closely with more partners in the field of 5G real-time holographic communication, jointly promote the landing of new technology and communication application scenarios as soon as possible, and shape a better future.

Media Contact:

Company: WIMI
Name: Tim Wong
Tele: +86 10 89913328
Email: bjoverseasnews@gmail.com

SOURCE: WIMI

ReleaseID: 595723