20221013-招银国际-China_Internet_Sector_Meta_Connect_2022__bridging_the_gap_towards_metaverse_4页_691kb

Summary of China Internet Sector and Meta Connect 2022

Core Content

The document provides an analysis of the China Internet Sector and highlights key developments from Meta Connect 2022, focusing on Meta's new Meta Quest Pro VR headset and its broader strategy for the metaverse. It also discusses the state of China's VR ecosystem and identifies leading platforms with strong potential for growth in the VR space.

Main Points and Key Information

1. Meta Quest Pro Launch

• Launch Date: 11 October 2022
• Release Date: 25 October 2022
• Price: US$1,499.99
• Key Features:
  • Pancake lenses reduce depth and weight, enhancing comfort.
  • High-resolution sensors and color passthrough enable robust mixed reality (MR) experiences.
  • Eye tracking and natural facial expressions improve social presence.
  • Qualcomm Snapdragon XR2+ processor delivers better performance than Meta Quest 2.
  • 37% more pixels per inch for clearer visuals.

These features are expected to significantly enhance the VR experience, particularly for game developers and work collaboration tool providers, who rely on immersive content.

2. VR Content Ecosystem Development

• Meta Quest Store Revenue: Total spending on VR content has surpassed US$1.5 billion.
• Revenue Generating Apps: Around one-third of the 400+ apps in the store have generated over US$1 million in revenue.
• Gaming Focus: Gaming remains the key content category, with new titles such as Marvel's Iron Man VR launching in November 2022.
• Content Expansion:
  • Xbox Cloud Gaming will be introduced to the Meta Quest Store.
  • Microsoft Teams and Microsoft 365 will be available on Meta Quest for professional use.
  • Fitness Content:
    • Meta Quest 2 Active Pack is the first fitness accessory bundle.
    • Gym Class - Basketball VR is a new fitness game.
    • A Fitness API will be released in fall 2022 to support developers.

3. China's VR Ecosystem

• The China VR ecosystem is still in its early stages of development.
• Leading tech platforms such as Tencent, ByteDance, NetEase, and Alibaba are favored due to their strong content development and use-case applications.
• Tencent has established an XR department to develop VR/AR hardware and software.
• ByteDance continues to expand its VR content ecosystem through its Pico product.

4. Future Outlook

• Meta's Vision: The new features and content initiatives are expected to bridge the gap towards the metaverse.
• VR Use Cases: The document anticipates expanding VR use cases to work and fitness, with immersive experiences reshaping these industries.
• Collaboration: Meta is collaborating with Microsoft to integrate enterprise tools into VR, aiming to lower barriers between VR and traditional platforms.

Analyst Certification and CMBIGM Ratings

• Analyst Certification: The research analyst certifies that the views expressed in the report reflect personal opinions and that compensation is not tied to the report's content.

• Ratings:

  • BUY: Potential return of over 15% over the next 12 months.
  • HOLD: Potential return of +15% to -10% over the next 12 months.
  • SELL: Potential loss of over 10% over the next 12 months.
  • NOT RATED: Not rated by CMBIGM.

• Industry Ratings:

  • OUTPERFORM: Expected to outperform the broad market.
  • MARKET-PERFORM: Expected to perform in line with the broad market.
  • UNDERPERFORM: Expected to underperform the broad market.

Important Disclosures

• The report is not investment advice and is intended for specific investors.
• Risks: The information may not be suitable for all investors, and actual outcomes may differ materially from the report's projections.
• Disclaimer: CMBIGM does not guarantee accuracy or completeness of the information and reserves the right to update or revise it without notice.
• Conflicts of Interest: CMBIGM may have investment banking relationships with the companies mentioned, which could affect objectivity.

Legal and Distribution Information

• Hong Kong: CMBIGM is a subsidiary of China Merchants Bank.
• United Kingdom: The report is only provided to persons falling within Article 19(5) or Article 49(2) of the Financial Services and Markets Act 2000.
• United States: The report is intended for major US institutional investors only and not for retail investors.
• Singapore: The report is distributed by CMBISG, an Exempt Financial Adviser, and legal responsibility is accepted only to the extent required by law for non-accredited investors.

Conclusion

The Meta Quest Pro represents a significant leap in VR technology, with enhanced hardware and expanding content ecosystems. While Meta's metaverse vision is gaining momentum, the China VR ecosystem is still nascent, but leading platforms are well-positioned for growth. Investors are advised to exercise caution, consult financial advisors, and understand the legal restrictions associated with the report.