How to support the high market capitalization with more than 10 billion Internet article bosses?

China Literature Group was listed on the Hong Kong Stock Exchange on November 8, with an opening price of HK $90, an increase of 63.6% compared with the offering price of HK $55, with a market capitalization of HK $81.6 billion. Also highly sought after by capital is Palm Technology, which has risen by the daily limit for several consecutive trading days since it went public in September. Behind the popularity of the two digital reading giants is the growing user scale and market share of online literature. However, it is worth mentioning that with the entry of Internet giants, the competition in the industry has become increasingly fierce, while the problems such as single revenue and unsolved IP are still the challenges that the network literature platform will face in the future.

strong > IP has become an important weight / strong >

this year, the Hong Kong Stock Exchange has undoubtedly attracted the most attention from China Literature Group IPO, a new stock of Tencent. Since the IPO of Yuewen Group, it has been highly sought after by investors. According to the global offering announcement issued by China Literature Group, China Literature Group plans to sell about 151 million shares worldwide, with a maximum amount of HK $8.325 billion to be raised, of which 90 per cent is an international offering and 10 per cent is a public offering. the offering price will not exceed HK $55 per offer share.

at 200 shares per share, China Literature Group investors applied for a starting investment of about HK $11000, making it the most expensive new shares in the Hong Kong IPO market so far this year. However, this did not affect investors' favor of China Literature Group. According to the results of China Literature Group's initial public offering announced on November 7, its public offering was about 625 times oversubscribed and frozen funds exceeded 520 billion Hong Kong dollars. Due to the large number of investors involved, the one-hand success rate is only 7.7%.

bearing many titles such as "King of Frozen Capital", China Literature Group was officially listed on the Hong Kong Stock Exchange on November 8, with an opening price of HK $90, an increase of 63.6% compared with the offering price of HK $55, with a market capitalization of HK $81.6 billion. As of Beijing Business Daily reporter before the press, China Literature Group's share price has exceeded HK $100 per share, with a market capitalization of more than HK $90 billion. It is worth mentioning that also highly sought after by capital is Palm Technology, which was listed in September this year. According to the Palm Technology Bulletin, the company's share price has risen greatly recently, rising by the limit for several consecutive trading days since listing, with a cumulative increase of 1536.54%.

"for China Literature Group, relying on Tencent, China Literature Group has innate advantages in terms of distribution platform, content volume, IP resources and so on. And now the film and television entertainment industry IP fever is not reduced, but also promoted the capital market to the network literature this plate prospect favor. Peng Kan, director of research and development consulting of Lezheng Media, said.

in recent years, movies and TV dramas such as Nirvana in Fire, Legend of Miyue, Thousand bones of Flower, and Peach Blossom of three generations dominate the screen, and most of these popular movies and TV dramas are adapted from online literature IP works, and the capital does not hide the pursuit of IP. In recent years, the copyright cost of movies and TV dramas adapted by well-known IP has increased year by year. "in the field of online literature, China Literature Group's market share has reached more than 80 per cent. Most of the current popular movies and TV dramas are also adapted from China Literature Group's IP works, which is why China Literature Group can attract many investors. " Huachuang Securities analyst told Beijing Business Daily.

strong > head IP reserve is limited / strong >

at present, among the domestic online literature platforms, China Literature Group, Chinese online and Palm Science and Technology have been listed. In terms of the quantity reserve of IP works on each platform, according to the data released by Frost&Sullivan, the number of online literature works provided by China Literature Group, Chinese online and palm technology platforms accounted for 72%, 27.5% and 5.2% of the total online literature works, respectively.

among them, according to the Chinese online 2017 semi-annual report, the company had more than one million kinds of digital content resources during the reporting period. More than 2000 well-known writers and best-selling authors have been signed. In the first half of 2017, the Chinese Book City client sold more than 100000 works online, with many popular best-selling works such as "three-body", "Ode to Joy" and "in the name of the people". Palm Technology, which has been on the market for two months, said in its prospectus that as of March 31, 2017, the company had more than 500,000 copies of digital content, including well-known IP works such as the President.

compared with Chinese online and palm reading technology, China Literature Group's IP works are more abundant. According to data provided by Frost&Sullivan, as of June 30 this year, China Literature Group had a total of 9.6 million literary works and 6.4 million writers in the online content library. Among the online literature adapted products released in China in 2016, 13 of the top 20 films, 15 of the top 20 highest-rated TV dramas, 14 of the 20 highest-rated online dramas, 15 of the 20 highest-downloaded online games, and 16 of the 20 highest-rated animations are based on the content of the China Literature Group platform.

for online literature platforms, high-quality IP and author resources have become the key to stand out in the commercial competition. At present, many IP works under the three platforms have also been adapted into film and television, animation, games and so on. China Literature Group currently has hundreds of works licensed for third parties to adapt, such as Chinese online's "in the name of the people" and other works.

"judging from the current market, there is nothing wrong with the value of IP works. In particular, the head IP still has a strong attraction in film and television, animation, games and other industries. " Peng Kan said, "but the current market situation is that everyone is too crazy to chase IP blindly, and after getting IP resources, they also lack patience to cultivate or maintain it for a long time, often trying to extract the value of this IP quickly in a very short period of time, but good IP resources are after all limited, and after high-quality IP is almost consumed, the platform is likely to be weak." Peng Kan said.

strong > long-term profitability / strong >

"from the market point of view, the current market scale of the online literature industry is still considerable. On the one hand, the population covered by online literature is growing, and the demographic dividend has become an advantageous resource for the development of online literature; on the other hand, with the policy crackdown on pirated resources, pirated books are decreasing, and more and more people are willing to pay for online literature, and the improvement of the UP value also increases the money people spend on reading, which makes the payment rate of online literature in the process of increasing. " Huachuang Securities analyst said.

Public data show that by the end of 2016, the size of the online literature market has reached 9 billion yuan. The number of online literature users exceeded 330 million, an increase of 36.45 million over the end of last year, accounting for 45.6% of the total netizens. It is estimated that the number of online literature users will reach 420 million in 2020. In addition, fees for online reading have increased on both sides, according to prospectuses submitted by China Literature Group and Palm Technologies. In 2016, the online paid reading income of palm reading technology was 1.126 billion yuan, an increase of 90.3% over the same period last year; China Literature Group's online paid reading income was 1.974 billion yuan, up 103.3% from the same period last year.

nevertheless, with the entry of Internet giants such as Alibaba and Baidu, competition in the industry has become increasingly fierce, while problems such as single revenue and unsolved IP are still challenges faced by online literature platforms. According to China Literature Group's prospectus, China Literature Group's online reading income accounted for 97.2%, 60.5%, 77.1% and 84.9% of total revenue from 2014 to the first half of 2017, respectively. According to the Palm Science and Technology Bulletin, online paid reading revenue accounted for 94% of the total revenue of Palm Technology in 2016.

in addition, although IP is very popular at present, in the transformation of IP, how to achieve a more efficient transformation of IP is still a difficult problem for online literature platforms. "at present, companies such as China Literature Group mostly expand their business lines through copyright sales or joint investment with film and television entertainment companies, and this will be a relatively safe way of business development for a long time. After all, companies such as China Literature Group have dominated digital reading business for a long time, and they do not have enough resources and experience in film and television and other fields. " Analysts at Huachuang Securities stressed, "of course, different companies have their own different strategies, and if the future platform is still dominated by paid reading business, we need to explore services and products that allow users to pay for this business." to enhance business expansion. "

"in addition, although the number of IP works available on several major online literature platforms is very large, how much IP is valuable and can be developed is carefully selected and considered by the platform. In the case of a limited number of head IP, the platform also needs to form an effective mechanism to encourage the output of high-quality works and enhance its sustainable profitability through the development of subsequent derivative products of these works. " Peng Kan stressed.

Edit: mary