2. For the new market of XR virtual photography, what are the main thresholds for hardware and software?
Answer: The complete solution for XR virtual shooting mainly includes LED display, LED display control system, rendering server, digital content production and virtual shooting services.
The company is one of the few listed companies in the industry that has independently developed and produced LED display control systems. The company is involved in LED display control systems ranging from 4K to 64K, and has more than 270 software copyrights. The company has early laid out the research and development of XR virtual shooting related technologies. The independently developed "Yuanverse XR Virtual Rendering Service System Project" mainly uses key technologies such as XR virtual film and television shooting, XR virtual digital engine, virtual visual interaction, and LED virtual display. It can be promoted and applied in film and television, cultural tourism, performing arts, radio and television, live broadcast, corporate promotion, games, animation, e-sports and other fields. The technical barriers in this area are relatively high.
As the company’s digital content center, Chuangxiang Digital, a holding subsidiary of the company, focuses on virtual digital people and XR virtual live broadcast room business, and is committed to providing customers with professional content products and services such as virtual digital people, virtual venues, naked-eye 3D, and creative interactive applications. In order to implement the company's smart video strategy, we built a one-stop solution of "hardware + software + content" to fill the shortcomings of the digital content side, improve the company's business layout, and optimize the business structure so that the company can more completely provide customers with the overall solutions they need.
3. Is XR virtual photography mainly implemented domestically or abroad? What are the main cities?
Answer: At present, there are more high-quality XR virtual shooting projects in the overseas market than in the domestic market. Most of the company's projects are also overseas, such as the United States, the United Kingdom, Japan, South Korea, etc. The main reason is that the demand in overseas markets is large, customers have strong purchasing power, and they are already familiar with XR virtual shooting related applications. Domestically, it mainly cooperates with Tencent to create the XR virtual shooting project of Pingshan International Film and Television City, and cooperates with China Film Group to launch the XR virtual shooting project in Beijing; XR virtual live broadcast rooms are also gradually launched in Xiamen, Beijing, Shenyang and other places.
4. What are the main application scenarios of the company’s virtual digital people?
Answer: Virtual digital humans are one of the core businesses of Chuangxiang Digital, a subsidiary of the company. At present, it mainly provides customized virtual digital human services for customers in banking and other fields. It has delivered several virtual digital human projects for large state-owned banks and won unanimous praise from customers. It worked with a large state-owned bank to create a virtual digital manager for it at the 5th Digital China Construction Summit to help the digital reconstruction of traditional financial models. This year, we will also explore the business of digital human IP incubation and operation with some cultural, film and television, and MCN organizations.
5. Qianbaihui, a lighting company that your company previously acquired, has always performed well. What is the specific reason for the impairment of goodwill in 2020? Will the performance in the future be better? What do cultural tourism projects mainly include?
Answer: The impairment of goodwill in 2020 is mainly affected by factors such as the epidemic and policies. Affected by the external environment in the past three years, the overall demand for the smart lighting industry has been suppressed. As a well-established company in the lighting industry, Qianbaihui, a wholly-owned subsidiary of the company, has good industry qualifications and relatively high-quality customer resources. Follow-up related projects will be more integrated with the cultural tourism and night tour sectors, with new technologies, and use technology to drive the further development of the industry.
Cultural tourism projects are mainly tourist towns, theme parks, etc. We have created a number of cultural tourism night tour and landscape lighting projects such as light and shadow art installation projects on both sides of the Buji River in Luohu District, Shenzhen, Shenzhen Baoan Binhai Cultural Park night view project, Foshan Nanhai Guicheng Landscape Lighting Project (Phase II), Wenzhou Jiangxin Island Light Show, Zhuhai Light Show, etc.
6. Where is the company’s biggest profit growth expected in 2023 and in the future?
Answer: In the past three years, due to the impact of the external environment, some demand has been suppressed, especially in overseas markets. Due to inconvenient travel, normal business exchanges and bidding and installation cannot be carried out. This year, as the external environment stabilizes, a lot of demand will gradually be released, especially in some key application areas, such as XR virtual shooting, advertising, leasing, etc.
Among them, in the field of XR virtual shooting, as a new method of film and television shooting, it has gained high recognition in the film and television industry. According to third-party data, the market value of virtual shooting LED display screens is expected to grow steadily to US$431 million in 2022, a year-on-year increase of 52%. We divide the application of virtual shooting into three dimensions, namely film and television level, advertising level, and short video live broadcast level. Judging from the current communication with some industry customers and related data, the lighter and smaller the studio, the greater the growth rate. The company is involved in the applications in the above three dimensions, and continues to conduct in-depth research to provide comprehensive solutions for industry-leading customers.
Up to now, the company has mainly provided XR virtual shooting solutions for many Fortune 500 companies such as Tencent, Apple, Microsoft, Netflix, Amazon, Meta, and Toei Japan. In terms of XR virtual live broadcast rooms, Chuangxiang Digital has successively signed strategic cooperation agreements with well-known institutions in the domestic cultural, film and television industry and MCN fields such as Lianmeng Media and Qijin Technology, and has completed the construction of an XR virtual live broadcast room in cooperation with Qijin Technology.
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