Key points of investment:
In 2022, the company's revenue more than doubled, and the domestic business achieved large-scale development. The company achieved revenue of HK$1.44 billion in 2022, an increase of 110.1% over the previous year, mainly due to the continued growth of the company's US business and the expansion of its business in mainland China driven by strategic business cooperation. Domestic business achieved rapid growth. In 2022, domestic business revenue increased 319.8% year-on-year to HK$697 million. The foreign business was mainly in the US region, achieving business revenue of HK$740 million, accounting for 51.3% of total revenue; the company achieved net profit of HK$42 million in 2022, reversing losses to profits over the previous year. In 2022, the company's gross profit increased 69.34% year on year to HK$591 million. As Particle Technology's gross margin was lower than other businesses, the company's gross margin fell from 50.8% in 2021 to 40.9% in 2022; the company's sales and marketing expenses in 2022 were HK$152 million, up 55.10% year on year, mainly due to the company's enhanced sales and marketing activities during the year; the company's R&D expenditure in 2022 was HK$133 million, up 18.75% year on year, and R&D investment continued to increase.
The subscription service product matrix continues to improve, and value-added services open up room for revenue growth. On the one hand, the company provides content recognition and filtering services to online video website platforms through the self-developed core patented technology of digital fingerprinting and watermarking of film and television genes. Furthermore, the company continues to expand the scope of value-added services by increasing coverage of customer content assets to obtain revenue from more channels. Since 2021, Fubo has added API services to create a Chinese-specific copyright protection implementation model. This model helps the company rapidly expand local business, expand service coverage, and reach more content owners. In addition, with the transformation of traditional content-side customers to streaming platforms, Fubo has developed customized DTC platform protection solutions to meet the increasing demand for copyright protection. Along with the expansion of partnerships with customers, value-added services have also opened up room for revenue growth. In 2022, Fubo's subscription service revenue and value-added service revenue reached HK$550 million and HK$890 million respectively, up 166.8% and 85.6% year on year.
In line with the new trend of Web3.0 & AI development, Particle Technology empowers product innovation. While mastering core patented technologies such as digital fingerprinting and watermarking in film and television genes, Fu Bo follows the development trends of Web 3.0 and AI and actively explores application opportunities for digital content authorization, digital content asset protection, and trading in new scenarios. (1) On the technical side, Fubo and Particle Technology integrated technical capabilities, gradually built platform capabilities and industry solutions for the field of cultural digitalization, further improving and developing the product matrix, and comprehensively enhancing product competitiveness; (2) on the content side, the company reached cooperation with leading Internet video platforms and radio and television operators to connect more unique content for young people in the Z era; (3) on the product side, launched “Mingjing Cloud” integrated video cloud products to further enrich the company's product line and enhance the competitiveness of integrated video services. We believe that with the rapid development of the digital culture industry in China, the demand for authorization, circulation and trading of digital assets is becoming stronger, and in combination with the widespread application of Particle Technology's media asset management technology products in Fubo's business, Fu Bo will maintain a leading position in the Web3.0 & AI development wave.
Risk warning. The application process of watermarking technology has fallen short of expectations, and content policy regulation is uncertain.