AR Service Provider Flowing Cloud Eyes To Become First Metaverse-Linked Stock Listed In Hong Kong

On September 22, a document from the Hong Kong Stock Exchange (HKEx) showed that Flowing Cloud, a Chinese technology company, had passed the listing hearing and would start trading on the main board of the exchange at the end of this month. The company could thus become “the first stock linked to Metaverse listed in Hong Kong”.

Founded in 2008, the company transitioned from games business to AR/VR content and services in April 2017, completing the transformation in May 2019. Now, its business mainly covers AR/VR marketing services, AR/VR content and AR/VR. SaaS (software as a service).

Considering that AR/VR content and services belong to the Metaverse ecosystem, the company has started building its own Metaverse platform, called Flowing Cloud Metaverse, and will release it in the future. There is a virtual trading market that allows users to roam freely and become traders, providing access to Metaverse for businesses and individual users. The platform will link them together.

The company also provides AR/VR SaaS services. Recently, it announced a strategic cooperation agreement with short video sharing app Kuaishou. The content of the agreement includes providing convenient editing tools for Kuaishou content creators based on a SaaS platform, which is widely applicable to panoramic images and other immersive videos. Creators can create 3D models, add special effects and use other interactive features.

Flowing Cloud currently maintains relatively strong revenue growth and profitability. According to its prospectus, Feitian Yundong’s revenue was 251 million yuan ($35.5 million) in 2019, 339 million yuan in 2020, and 595 million yuan in 2021. During the period, net profit was of 42 million yuan, 60 million yuan and 72 million yuan. million yuan respectively. In the first quarter of 2022, its revenue increased by 64.75%, from 139 million yuan in the same period of 2021 to 229 million yuan; Net profit rose 315.78% from about 9.19 million yuan in the same period of 2021 to 38.21 million yuan.

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The net proceeds from this IPO will be primarily for building R&D capabilities and improving technical infrastructure. The company will strengthen its sales and marketing functions, foster potential mergers, acquisitions and strategic investments, and expand the aforementioned Metaverse platform. In addition, the funds will be added to working capital and general business needs.

Investments and funding in the field of the Metaverse are in full swing. According to the Metaverse Investment and Funding Data Report released by Chinese market research company 100EC in July this year, the amount of funding for Metaverse in China reached 5.46 billion yuan. In China, there are 160,000 digital human enterprises and more than 20 provincial governments involved in building the metaverse. Dora Liu, Deputy Managing Director and Director of Quality and Transformation at Deloitte China, pointed out that in 2030, China’s metaverse market will reach 40 trillion yuan, which will account for 20% of the country’s GDP, and that electronics and wearables in the metaverse will be worth $100 billion.

Major domestic companies are also accelerating the layout of Metaverse. In June this year, Tencent reportedly established an “XR-ExtendedReality” department, tasked with building an extended reality business including software and hardware for Tencent. and will be part of the company’s Interactive Entertainment Group (IEG). Additionally, in September 2021, Alibaba launched AYAYI, a digital manager, and in March 2022 led the investment in Nreal, a Chinese mixed reality (MR) technology startup. BaiduByteDance and NetEase have also invested in this area.

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