Hong Kong - MobiusTrend, a market research organization in Hong Kong, recently released a research report on 'WIMI Sets Up a Subsidiary to Accelerate Hologram Vision AI Robot and Semiconductor Business'. WIMI announced the establishment of a wholly-owned subsidiary Lixin Technology Co., Ltd. ("Lixin Technology"). This company's initial registered capital of 200 million yuan (CNY), will focus on research and development, sales, and related holographic vision intelligent robots. Lixin Technology will also use its parent company's related patents and copyrights to develop semiconductor products, and sell such products to customers across the broader holographic ecosystem. Lixin Technology will focus on a new upstream business in the domestic smart product market, as well as the R&D and sales of semiconductor chips, to further enhance the company's competitiveness.
As a fabless semiconductor company, Lixin Technology will become the latest competitor in China's already large and well-funded local semiconductor industry. "Made in China 2025" is a strategic plan released in 2015 to promote the development of Chinese technology manufacturers in the global market. As China continues to influence the global semiconductor industry, one of the main goals of "Made in China 2025" is to achieve self-sufficiency. According to a report released by Morgan Stanley on June 16, 2020, the sales of Chinese-designed chips are expected to rise from US$18 billion in 2019 to US$48 billion in 2025. By 2025, China's semiconductor companies will meet 40% of domestic demand.
With the increasing demand for semiconductor application solutions related to holographic 3D vision, WIMI will provide corresponding semiconductor solutions to meet the market demand of holographic 3D vision based on the market needs.
On April 30, 2020, WIMI disclosed its financial reports for the fourth quarter and full year of 2019 on NASDAQ. The data shows that WIMI's performance of growth momentum is strong. With the rapid growth of market demand for AR technology services in recent years, WIMI's core business has also grown rapidly.
According to the annual report, the WIMI business began to gradually increase its volume in 2017, with revenues of 192 million yuan, 225 million yuan, and 319 million yuan respectively in 2017-19, with growth rates of 17% and 41%, respectively, showing an accelerating momentum. In terms of net profit, from 2017 to 2019 years, they were 73 million yuan, 89 million yuan, and 102 million yuan, respectively.
In the year ended December 31, 2019, holographic AR ads using the company's advertising solutions generated approximately 9.7 billion views, up 47.0% from about 6.6 billion views in 2018.
From the above data, it is not difficult to see that the business growth of WIMI as a whole is in a healthy development trend. From 2017 to 2019, the financial revenue of the three years has been increasing continuously. The amount of revenue generated from this market is increasing, and the market expansion is expanding.
WIMI, as a leading holographic AR application platform in China, has huge market potential in the AR value chain. With cutting-edge technology capabilities, high-quality user experience, and an experienced management team, a comprehensive and diverse content library among holographic AR solution providers has been established, which is expected to grow continuously in the next few years.
With the further rise of downstream industries, such as 5G, consumer electronics, and automotive electronics, and the transfer of the global semiconductor industry to the mainland, China will continue to become the world's largest and most actively traded semiconductor market. WIMI takes 5G as the representative of the next-generation information technology field, semiconductor, and digital consumption industry as its development direction, and further promotes the layout of the semiconductor industry.
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