My Thoughts on Vobile Barriers and Valuation

 

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Vobile technology is not easily subverted. Its barriers are very high.

Here are its three main barriers: Technology, Customers and API.

The first barrier is technology. Text can identify infringement through fuzzy matching. The picture can identify infringement through pixel comparison, audio and video infringement identification requires relatively high algorithm and efficiency. VDNA in the audio and video field accumulated and acquired by Vobile for many years. Technologies and patents such as DRM and digital watermarking are very hard to duplicate.

Customers are Vobile's second barrier. The six major Hollywood studios such as Disney are all Vobile customers. These big copyright owners have a lot of quality materials to copyright. These copyright owners are generally picky. The selection of suppliers is very strict. But once you become the supplier of these copyright owners, they are very stable and will not change suppliers easily. The six major Hollywood film companies such as Disney will become very important benchmark clients for copyright protection and operation. It has important reference significance for other copyright owners to choose suppliers. It is also difficult to persuade large copyright owners such as Disney to change suppliers. That's why customers are Vobile’s second barrier. Customer barriers are actually higher than technical barriers.

API permissions are Vobile’s third barrier. If you want to cooperate with the platform in depth, efficient connection with major platforms through API is essential. For example, automatic retrieval via YouTube API, automatic submission of infringing data, etc. Larger platforms such as YouTube have very high requirements for partners with open API qualifications. Therefore, it will be a very high barrier to obtain platform qualification and API permissions. This requires a relatively strong accumulation of technology. Relatively rich IP resources and other advantages. Of course, a better platform relationship is also essential. Although Vobile used to have a business similar to Rightsid, but it has no YouTube API permissions, So the business has not been done. YouTube related API is currently only open to Rightsid, After acquiring the Rightsid business, Vobile has YouTube API permissions, plus VDNA and other technologies. So Rightsid has achieved relatively rapid development.

A recent corporate statements from over 70 Film and Television Media Units in China calling for short video platforms to raise awareness of copyright protection may also catalyze Vobile's expansion into China more rapidly.

An estimation of Vobile's valuation target next year can be based on forward revenue growth. To be conservative, we can fix its price to sale at current 41x.

Revenue of USD 43.87 million in 2020, expected revenue of 80 million U.S. dollars in 2021(from their conference call), growth rate is 82%. Do note that its revenue grew 131% from 2019 to 2020.

Overall revenue: 80 million USD

Valuation multiple:41x

Valuation:8000x41=3.28 billion U.S. dollars

Corresponding stock price:32.8/4.62=7.10 USD/share

Corresponding stock price(HKD):7.10x7.75=55.02 HKD/share

This estimated target of mine is 75% premium to current last done price of 31.40.

Full disclosure, I have vested interest in this stock and I'm currently up 31.12%. It is also the highest weightage in my portfolio.

Snap shot of my portfolio performance as of today: Total profit for 2021: S$62,197.36


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