China values 5G because it will drive many new applications in consumption, and there will be many applications in the industry in the future. With WIMI Holographic AR's filing with SEC for its IPO on NASDAQ, the global view on China's 5G holographic AI vision is going to be changed.

China has a large number of Internet users and mobile Internet users. With the introduction of the underlying tool platform by system vendors such as Apple and Google, it is much more convenient for developers to create and apply diverse AR contents, enabling AR technology to quickly reach a large number of users. In addition, stores offering AR experiences are penetrating rapidly into shopping malls in China, which have enabled consumers to enjoy the AR experience at a low cost and promoted consumers' acceptance of AR.

Currently, advertisement is the biggest vertical of AR. According to Frost & Sullivan, the market size was estimated at RMB1.5 billion in 2016, and is expected to be at RMB7.8 billion by 2020, with a compound annual growth rate ("CAGR") of 71.6%, much higher than the growth of total online advertising market, which has a CAGR of 32.4% from 2014 to 2018. As AR technology keeps evolving to satisfy the advertisers' growing need, AR is expected to be largely used in advertisement. According to Frost & Sullivan, in 2025, the market will be valued at RMB143.9 billion with a CAGR of 79.1%, indicating a larger market share in total online advertising market in the next five years. Entertainment, including gaming and video, takes a huge share of AR sector as well, and it is expected to have a higher growth rate. In 2016 the market size was estimated at RMB0.6 billion and is expected to be at RMB6.8 billion by 2020, with a CAGR of 83.5%. Driven by the availability of AR SDK, improvement in smart phone performance, prospect of gaming industry, AR entertainment is expected to have a promising future, with a market size of RMB180 billion by 2025, indicating a CAGR of 92.6%, and surpassing advertisement to be the biggest application scenario of AR.

There are four key drivers in the China holographic AR industry:

1. Ultimate goal for visual display medium;
2. Advancement in technology;
3. Diversifying customer base and expanding application field; and
4. Government and policy support.

WIMI's leading holographic AR content production capabilities are built around image acquisition, object recognition, automated image process, and computer vision technologies. WIMI's software engineering team and visualization design team work closely to consistently advance such visualization-related technologies, and harness them to design and produce innovative holographic AR contents. Through real-time computer vision algorithms which provide an accurate pose estimation, the company is able to perform scene recognition and tracking within seconds. Such cutting-edge algorithms also allow us to perform visualization of photorealistic high-resolution renderings of products on a pixel basis. While most peer companies may identify and capture 40 to 50 blocks of image data within a specific space unit, the number of data blocks WIMI can collect reaches 500 to 550, according to Frost & Sullivan. According to Frost & Sullivan, WIMI's speed of image processing is 80% faster than the industry average, leading to improved operation efficiency. In the course of scene reconstruction, WIMI's automated image processing tools can perform noise cleaning and feature enhancement on the image WIMI initially captured, enabling us to create best-in-class holographic AR designs with an industry-leading simulation degree.