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EvaluateResearch keeps its WIMI Hologram buy rating

Overseas research firm EvaluateResearch released a research report on March 03, maintaining its buy rating on WIMI Hologram (NASDAQ:WIMI) with a target of $7. The ratings reasons mainly include: 1) strong growth in the first half of 2021; 2) leading peers in technology development and superior continuous innovation capabilities; 3) The holographic AR market has huge growth potential.

WIMI Hologram(NASDAQ:WIMI)

WIMI is a fast-growing company with a unique technology-intensive business model that combines software and hardware-based semiconductor products sold to a variety of customers in China and Asia. The company is committed to becoming the creator of China’s largest holographic augmented reality ecosystem. WIMI is one of the excellent enterprises in China’s holographic cloud industry, aiming to become a holographic cloud platform. While WIMI has many peers, its innovative capabilities in holography make it unique in product terms, thus making it attractive from an investment perspective.Existing innovative software products and services and recently launched semiconductor-based products also give the company a huge advantage in gaining revenue and market share and providing valuable services to its customers.

WIMI represents a rapidly growing company with a unique technology intensive business model that combines software-based and hardware related semiconductor products that are sold to various customers in China and Asia. The company aspires to become the creator of the largest holographic augmented reality ecosystem in China. WIMI is one of China’s outstanding Hologram Cloud industry companies and aims to become a Hologram Cloud platform. WIMI, although it has many peers, has the ability to innovate in hologram technology which makes it unique in its product offering thereby rendering it attractive from an investment perspective. The existing innovative software products and services along with the recent introduction of semiconductor-based products also gives the company a huge edge in gaining revenues and market share and providing valuable services for customers.

WIMI ranks first in China’s holographic AR industry in terms of the number of customers, holographic AR content, and the number of holographic AR patents and software Copyrights.

WIMI growth was strong, with revenue up 202% year-on-year.

The WIMI performance was strong in the first half of 2021.In the first half of late June, revenue rose 202% and net income rose 190%.

  • For the six months ended June 30,2021, gross income was $79.9 million.This represents a 202% increase as compared to the six months ended June 30,2020.
  • For the six months ended June 30,2021, the gross profit was $23.7 million.This represents a 190% increase from the six months ended June 30,2020.
  • For the six months ended June 30,2021, operating income was $3.9 million.This represents an increase of 19.8% over the six months ended June 30,2020.

WIMI’s rapid revenue growth clearly shows that its technology-intensive business model has large development plans.The company is in the early stages of growth and plans to buy companies in the future.And any future acquisition could be an increase in its growth prospects. Driven by the software and semiconductor sectors, there will be rapid organic growth in the future. But the company should also show strong growth in net revenue and CFO / FCF.

WIMI will continue to apply the cash flow in the two main fields- Holographic AR technology development and semiconductor business. The first half of 2021 results convinced us that the company will continue to rapid growth in revenue and earnings per share.As the company’s financial performance in the first half of 2021 suggests, earnings will explode. With the expected revenue growth, profit margins also look very solid, and there is more room to expand further once the company’s operations begin to achieve economies of scale. The core competitiveness- -the most advanced technology.

The company has developed powerful, cutting-edge holographic AR technology.

  1. Intelligent technology of holographic image processing and recognition

WIMI inserts the holographic AR ads into a web video. Based on its imaging detection and recognition technology, template matching and detection technology, video processing and recognition technology, holographic 3D layer replacement technology in imaging recognition, and dynamic fusion processing technology in imaging tracking. The company expects these technologies to be applied to the company’s future strategic blueprint, such as the development and application of holographic 3D face recognition technology and holographic face changing technology.

  1. Development and application of holographic 3D facial recognition technology

The development of holographic 3D face recognition software is based on the company’s holographic imaging characteristic imaging detection and recognition technology, template matching holographic imaging detection technology and video processing and recognition technology based on deep learning and training technology.Conventional two-dimensional face recognition is a biometric technology based on facial features that captures information from facial images or facial video streams and automatically detects and tracks the target face. In contrast, holographic 3D facial recognition technology is a combination of holographic imaging capture and 3D portrait biometric technology. The company’s focus is on the development and application of its software and artificial intelligence technologies, machine recognition, machine learning, model theory, and video imaging processing. Holographic 3D face recognition technology is the use of structural light and infrared light collection technology, can collect more than 30,000 feature points. In contrast, traditional two-dimensional facial recognition techniques collect fewer than 1,000 feature points. The company’s 3D technology is also expected to be less affected by the surrounding environment, and is expected to overcome many problems in traditional 2D facial recognition technologies, such as light, posture, occlusion, dynamic recognition, and facial expressions.

  1. Development and application of holographic face-changing technology

Holographic face-changing technology is based on the company’s holographic 3D layer replacement technology, which involves artificial intelligence-based image recognition and dynamic fusion processing technology, tracking real-time images and replacing faces with other faces. The technique replaces the face in video frames, synthesizes the video and adds the original audio. The company has validated these technology modules in holographic AR plug-in advertising applications, and continues to develop and upgrade them. The technology promises to generate new business growth for applications such as celebrity advertising, film distribution and live video.

  1. Software engineering

Since its inception, The company dedicated to software development. The company’s software engineering team is responsible for building a company-wide software platform, supporting the integration of its products and applications within the cloud infrastructure, and developing holographic AR and MR-related software and solutions that they license to customers in the entertainment industry. The company’s holographic AR software development service offers its customers the following benefits.

Convenience-The company designed software is simple, easy to use and user friendly.Through the intuitive, visual interface of its software, users can quickly and easily manage, distribute, and implement holographic AR content.

Adaptability- -Integrated holographic AR software has wide compatibility and runs on a variety of computer operating systems, including Windows, Mac OS, and Linux.Customers can install the software in the cloud, within the enterprise, or in a hybrid way.

Features and Intelligence-The company continues to leverage its software engineering capabilities to further improve its products and services to enrich its software functionality.As the company’s customer base grows, it will be able to further improve its software intelligence as the amount of data processed increases.

Reliability-The company values long-term relationships with its customers and provides continuous ancillary technical support and services.They conduct security and code quality reviews before publishing software to customers, while embedding mature security practices throughout the life-cycle of holographic AR software to protect customer data and proprietary information.

 

  1. Content Production

The company’s leading holographic AR content production capabilities are built around image acquisition, object recognition, automated image processing, and computer vision technologies.The software engineering team and the visualization design team work closely together to continuously advance visualization-related technologies and use these techniques to design and produce innovative holographic AR content. With real-time computer vision algorithms that provide accurate posture estimation, the company’s software can perform scene recognition and tracking in seconds. This state-of-the-art algorithm also enables the company to visualize pixel-based realistic high-resolution rendering. During scene reconstruction, the company’s automatic image processing tools can perform noise cleaning and feature enhancement of the initially captured images, enabling it to create first-class holographic AR designs with an industry-leading simulation degree.

The company has built a comprehensive library of holographic AR content. The company has built a comprehensive library of holographic AR content. In December 31,2020, the company has over 4,600 readily-available AR holographic content that can be adapted into holographic AR products and solutions, including animals, cartoon characters, vehicles, and food. These AR holographic content can be applied to various scenarios, such as education, tourism, art and entertainment, popular science, etc. In addition, the company’s content library is also enriched by its copyrighted content obtained from third parties.They have worked with various content owners, including brands, filmmakers, and artist agencies, to adapt a high-quality, popular IP into a holographic AR format.

  1. Cloud technology

Cloud technology is of great importance for building a comprehensive holographic AR ecosystem.The company has developed a cloud architecture that works effectively in a highly resilient and flexible cloud environment. The company has developed a cloud architecture that works effectively in a highly resilient and flexible cloud environment.

  1. Mega data

The company has developed advanced data analysis capabilities to draw actionable insights from large amounts of data collected from its products and third-party sources, enabling them to maintain a solid end-user base in order to collect raw data. Processing power enables companies to manage extremely large amounts of data and provide scale real-time analysis, enabling it to continue to improve and innovate its products and services. The company’s data mining and user behavior data analysis techniques enable it to establish and subdivide context-rich user profiles and apply this analysis in numerous applications. For example, they created more than 2,560 user tags by analyzing user data collected through its holographic AR advertising service.

  1. Artificial intelligence

The company’s holographic image processing capabilities are regularly optimized and improved, including two core technologies: holographic AI facial recognition technology and holographic AI facial change technology. Due to the development of video processing and recognition technology, the company’s holographic AR advertising and holography services are leading based on image detection, recognition, template matching, image dynamic fusion and replacement.

  1. 5G+

The company believes that their holographic services will be adapted to 5G technology. Due to the high speed and low latency of the 5G technology, the transmission delay of the long-distance communication and data transmission from the system terminal to the service server is lower than that of the 4G network. This improvement ensures a diversity of less stagnation, less latency, high efficiency, and multi-terminal interactions in holographic AR remote communication and data transmission. The company expects its holographic AR advertising business to grow accordingly.

Competition between the holographic AR companies is very fierce.The global holographic AR market is characterized by the presence of international and local market participants. International giants mainly focus on hardware such as AR display devices or underlying SDK platforms and AI technologies, while local participants mainly focus on application software development.

Other competing companies are dealing with all aspects of the holographic AR market and its verticals. The competitive pattern is decentralized and constantly evolving. In the field of holographic AR advertising products, WIMI is competing with the holographic AR advertising manufacturers and traditional advertising manufacturers. Competition in the semiconductor industry is also fierce.Major competitors include digital marketing service providers and online game service providers.

We believe the company will remain competitive based on strong execution, the excellent quality of its applications, effective sales and marketing strategies, first-class customer service quality, and the inherent ability to acquire complementary technologies, products and businesses to enhance the features and functionality of its applications.

 

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