WiMi Hologram Cloud, AR Services Provider, Eyes $50 Million IPO in New York
WiMi Hologram Cloud Inc. seeks to raise up to $50 million for its initial public offering on Wall Street.
The Beijing-based company provides augmented reality-based holographic advertising and entertainment, each contributing 80 and 20 percent of its revenue, respectively. Specifically, WiMi offers software development, content production technology provision, content creation distribution, and holographic AR solution provision.
"Holographic AR utilizes digital holography technology to record a digital hologram of objects and then transfer the recorded information to a computer to analyze and form 3D images, which are subsequently displayed in a two-dimensional, 2D, surface or three-dimensional, 3D, space," the company said in its prospectus filed Friday. It provides services to upstream and midstream participants, as listed in the table below.
Value Chain of the Holographic AR Industry (Source: F-1)
The company said its revenue in the first quarter reached $11.66 million, up 59 percent from the corresponding period in 2018. Revenue from AR advertising was $9.35 million in the first quarter, while AR entertainment brought in $2.3 million.
Net income was $5.8 million, or 5 cents per American depository share, in the three months through March, up 62 percent from a year ago. Its gross margin increased from 65 percent in 2018 to 71 percent in 2019, among which the ratio for AR entertainment reached as much as 98 percent, the company reported.
WiMi said it intends to use 40 percent of the proceeds from its IPO for research and development. The scope of holography-based research includes facial recognition, artificial intelligence facial change, digital life system, education intellectual properties, navigation system for cars, shopping systems, and tourism navigation system.
Another 40 percent will be distributed for acquisitions and investments, while the rest of the proceeds will be used for general corporate purposes, the company said.
Listed underwriters on the deal are Benchmark Company LLC, Maxim Group LLC, China Merchants Securities (HK) Co. Ltd., AMTD Global Markets Ltd., BOCI Securities Ltd., Everbright Sun Hung Kai Company Ltd., GF Securities (Hong Kong) Brokerage Ltd., and Axiom Capital Management Inc.
The company has applied to trade under the symbol "WIMI" on the Nasdaq Global Market.