Sensegain's portfolio company WIMI Hologram (NASDAQ: WIMI) successfully listed on the NASDAQ Global Market on April 1, 2020 as one of the world's first Artificial Reality holographic public company. On July 10, 2020, WIMI’s stock continued to skyrocket after a high opening, closing at $14.63 per share, which is 281% increase from the previous trading day. The price went up about another 36% in after-hours trading. The market capitalization reached $1.174 billion USD based on the trading price of $20/share after trading hour. Recently, the Nasdaq index has continued to reach new highs, and popular Chinese stocks are also raising in general. Furthermore, as China has been less affected by the Covid-19 outbreak, Chinese stocks are expected to have an ongoing upside potential. WIMI, as a world leading AR holographic player is the raising star among high-quality Chinese stocks, had been severely undervalued because the company was listed at the beginning of the pandemic in US when market significantly influenced by the emotion of fear. Recently WIMI was given its first “Buy” rating by Wall Street analysts.
WIMI’s scope of operations covers holographic computer vision AI synthesis, holographic visual rendering, holographic interactive software development, holographic AR online/offline advertising, holographic AR SDK payment, 5G holographic communication software development, holographic face recognition development, holographic AI face-to-face development and other holographic AR technologies. The company has grown into one of China's biggest holographic cloud technical solutions providers with one-stop service capabilities. It has a deep technical accumulation in the field of holographic 3D vision software, with around 100 of related patents and software copyrights. Through years of original research and development, WIMI’s holographic team has developed the third generation of 6D holographic light field technology products, with its degree of simulation surpassing 98%.
According to Frost & Sullivan, WIMI holds the most comprehensive and diverse library of holographic AR content among all AR solution providers in China. The company ranks No.1 in China's holographic AR industry in terms of revenue, the number of customers, holographic AR content, and holographic in terms of AR patents and software copyrights. As noted in Maxim Group research, WIMI is the leader in the long-term growing market for augmented reality (AR).
From 2017 to 2019, according to public disclosure, WIMI's annual revenues were 192 million RMB, 225 million and RMB 319 million, with growth rates of 17% and 41% respectively showing accelerated momentum. As for net profit, it amounted to 73 million RMB, 89 million RMB, and 102 million RMB respectively.
With the advent of the 5G era, holographic AR video communications can take advantage of the high-speed feature of 5G networks to make users' experiences more realistic and smoother, thereby taking a qualitative leap in user interactivity and becoming a disruptive technology for online social networking. As we witness the growing popularity of electronic devices and usher into the explosion of various online life scenes, it can be expected that the era of holographic AR will soon arrive. According to the latest IDC's "Worldwide Augmented and Virtual Reality Spending Guide", by 2023 China's AR/VR market spending is expected to reach $65.21 billion USD, a significant increase from the 2019 forecast ($6.53 billion). Compound annual growth rate (CAGR) from 2018 to 2023 will reach 84.6%, higher than the 78.3% global market growth in general.
In the future, expanding from its core technologies of 5G holographic communication software development, holographic AI face recognition, and face replacement, WIMI plans on adopting holographic cloud platform services and 5G holographic applications supported by multiple technical innovations. This will fully capitalize on WIMI's competitive edge in providing holographic cloud solutions, a plethora of holographic applications, and a rich holographic AR content library, further expanding its business into more areas related to 5G applications.
WIMI recently announced that its Hong Kong subsidiary will set up a joint venture to conduct business in the semiconductor market. The demand for holographic 3D vision applications in the semiconductor industry is growing rapidly and the market potential is huge. In the future, the company intends to incorporate IC design companies with advantages in core technologies and set up a research and development joint venture with capable silicon manufacturers to conduct technology. These methods along with other endeavors will help WIMI with expanding into the upstream of the industry chain, namely semiconductor's R&D, design, technical services, and sales, etc. WIMI's semiconductor chip business will not only boost its revenues but also lead to the enhancement of its overall competency and consolidation of the company's leading position in holographic industry, hence support the company’s continuous growth in mid-long term.
Sensegain views WIMI (NASDAQ: WIMI) as one of our major layout along the "Technology China" investment track, with Sensegain subordinate funds controlling a combined 10% of WIMI's shares. Since our investment in 2016, Sensegain has remained steadfast in our role as a strategic investor and core partner to support the companies’ growth. In the long run, we are optimistic about the WIMI's deep accumulation in the field of holographic AR technology, applications in convergence with 5G technology, and expansion into the semiconductor chip business. We will leverage our own advantages in technology investment, industry M&A to help WIMI with constantly improving its position and competitiveness in the holographic AR industry.