Storm Technology is losing its luster and its future is uncertain: the effect of patch-like layout is unknown

Layout, upgrade, expansion... Baofeng Technology (hereinafter referred to as "Baofeng") has continuously released the above keywords to the outside world after its listing. Last week, it announced the establishment of its own film company and disclosed the progress of the establishment of Baofeng Sports-related companies. However, the industry generally believes that whether it is the film or sports business, Baofeng has not yet built a content moat, nor does it have a first-mover advantage. It is better to say that it is a helpless follow-up than a strategic upgrade. The specific stimulating effect of such a patch-like layout on Baofeng's performance remains to be seen. Baofeng, which has the halo of a "monster stock" since its listing, has gradually lost its charm in the continuous strategic upgrade.

The film industry and sports march

After announcing the plan to set up a film sector in March this year, last week Baofeng officially released the "Announcement on Foreign Investment in the Establishment of Baofeng Pictures (Beijing) Co., Ltd. (hereinafter referred to as "Baofeng Pictures") and Related Transactions", announcing that Baofeng and its related parties Baofeng Xinhui (Tianjin) Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as "Baofeng Xinhui"), Lu Ning and Wang Yuan plan to jointly invest 10 million yuan to establish Baofeng Pictures, with the shareholding ratios of 35%, 30%, 25% and 10% respectively.

On the day of the disclosure of the relevant announcement of Baofeng Pictures, Baofeng also announced that "Baofeng Sports (Beijing) Co., Ltd. (hereinafter referred to as 'Baofeng Sports') has completed the industrial and commercial registration procedures and obtained the business license issued by the Shijingshan Branch of Beijing Municipal Administration for Industry and Commerce". At the same time, the iOS version of Baofeng Sports App was officially released. Compared with the Baofeng Sports business that has been repeatedly praised by Feng Xin , the founder, chairman and CEO of Baofeng, the establishment of Baofeng Pictures seems relatively low-key, but this layout has attracted much attention from the industry. In addition to the trend of Internet companies entering the film industry, the deeper reason lies in the veto of Baofeng's acquisition of Straw Bear Pictures by the China Securities Regulatory Commission in early June.

Some people in the industry pointed out that after the acquisition failed, Baofeng was forced to change its M&A strategy to self-building. In this regard, Baofeng's public relations department explained to the Beijing Business Daily reporter that "the design of Baofeng's film sector was set before. One of the company's strategies is to find a super partner with a super IP. Straw Bear is a partner that Baofeng has found. Therefore, the failure of the acquisition of Straw Bear Film has no impact on the development of Baofeng Film, and the two parties have recently reached a consensus on business development."

Is it layout or remedial lessons?

According to the announcement made by Baofeng in mid-March, it plans to acquire the equity and team of Straw Bear Pictures, Lidong Technology, and Gump Technology through asset mergers and acquisitions, and enter the three major businesses of film and television, games, and overseas. Previously, Baofeng proposed the five major business concepts of VR, TV, show, video, and culture, and strategically invested in online music company Ocean Music Group and game company Tianxiang Interactive. Such mergers and acquisitions and business expansions have been common after Baofeng went public.

Baofeng is very interested in anything related to entertainment. "The pan-entertainment layout including video, music, games, and film will form an industrial chain linkage for Baofeng Technology, allowing IP to release greater value. There is nothing wrong with this strategy itself." Ma Shicong, an analyst at iResearch, once pointed out clearly, but she also told a reporter from Beijing Business Daily that "other video platforms and Internet companies have already started to engage in film industry, and Baofeng is a little late in terms of timing."

Not only did the film industry fail to take the initiative, but with the exception of the VR business, the rest of Storm's strategic rhythm was basically in a follow-up state. Taking the TV business as an example, Feng Xin once used "strong" and "crazy" to describe LeTV and Xiaomi, which entered the market first, and bluntly said, "The TV business is a necessary part of Storm's strategic map, but the resources required are overly complex, and it is extremely difficult to be number one."

After going public, continuous expansion has become the norm for Storm. The diversified business directions, concept integration and continuous emotional output have not only made Storm's various press conferences full of highlights, but also turned the company into a "giant" in concept. However, "catching up" is still the main theme of the company's business, and "first mover" is still not included in Storm's list of advantages.

Public data shows that the sales volume of LeTV's super TVs, the main competitor of Baofeng, has exceeded 7 million units. LeTV Pictures has also invested in film and television works such as the "Tiny Times" series, "Nine-story Demon Tower" and "The Crossing". In 2014 and 2015, LeTV Pictures' revenues were 765 million yuan and 1.145 billion yuan respectively, and the company's valuation also reached 10 billion yuan.

Fierce competition and uncertain prospects

The arrow is on the string, and it is better to act late than to do nothing. Baofeng detailed the direction and goal of the film company: "We will focus on developing original IP, deeply explore the industrial chain such as IP purchase, IP production, film and television drama purchase, and film and game interaction, and rely on the company's existing business foundation to comprehensively cover high-quality IP resources including film and television drama, variety shows, online literature, animation, games, and film industry, so as to achieve mutual connection and promotion on the company's large entertainment platform, maximize the excavation of content value, consolidate the content foundation of the company's DT large entertainment platform, and enhance the content support of the company's existing business platforms." This is no different from companies such as Tencent , Alibaba , Baidu , Tuyi, and LeTV.

It is worth noting that "copyright resources have already been snapped up, and the remaining resources that can be purchased are even more scarce, and the prices will be higher." Ma Shicong said, "The film industry is a money-burning industry just like the video industry. Everyone is scrambling for the upstream. If you don't have your own content, you will definitely be controlled by others. The hot spots of content are relatively concentrated, and you will be helpless if you don't have enough capital." Compared with Alibaba and Tencent, Baofeng's capital strength is far behind.

In view of the above uncertainties, madness may no longer be the response of capital to Baofeng. After Baofeng released announcements related to film and sports, a stock selection question and answer platform marked Baofeng Sports' announcement with a "bad news" sign, saying, "In the past year, all A-share project investment announcements today have an average return of 0.17% at the next day's closing, with a probability of 51.59% of rising. Among them, Baofeng Group has published 12 similar announcements, with a probability of 33.33% of rising and an average return of -3.01% at the next day's closing. This announcement has a bad impact on the stock price, and the probability of a decline the next day is relatively high, with a certain risk of a correction."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.