CITIC Securities: Initiates coverage on VOBILE GROUP with a "Buy" rating and a target price of HKD 8, optimistic about the long-term demand for global copyright protection

According to the Zhitong Finance APP, CITIC Securities has released a research report stating that it is optimistic about the investment value of VOBILE GROUP (03738), initiating coverage with a "Buy" rating. The company is expected to generate revenues of HKD 2.979 billion, HKD 3.738 billion, and HKD 4.717 billion from 2025 to 2027, representing year-on-year growth of 24.1%, 25.5%, and 26.2%, respectively. The company's net profit attributable to shareholders is expected to be HKD 192 million, HKD 287 million, and HKD 450 million, with year-on-year growth of 34.6%, 49.2%, and 57.0%. The bank's comprehensive valuation method and mid-term PE valuation method result in a target market value of HKD 19.2 billion / RMB 17.5 billion for the company, rounding to a target price of HKD 8 / RMB 7.

The company is a global leader in the third-party technology service industry for copyright protection, possessing three core advantages: data reserves, algorithm capabilities, and exclusive APIs. The bank is optimistic about the long-term demand for copyright protection from major global content providers and streaming platforms. AI-generated videos are expected to enhance creative efficiency while potentially increasing the supply of infringing content and creating new opportunities for the protection of AIGC original assets. The company combines a high-quality track and competitive advantages, likely maintaining a high growth trajectory. The advantages are as follows: 1) Industry level: Major global content providers have a rigid demand for long-term copyright protection subscription services. AI-generated videos are expected to bring dual opportunities for increased potential infringing content supply and original AIGC content copyright protection, with more micro-short dramas/short video assets in the domestic market awaiting copyright protection; 2) Company level: The company has three core advantages of data reserves, algorithm capabilities, and exclusive APIs, with a continuous increase in the number of clients, content resource management scale, and average revenue per client, benefiting from industry demand expansion and increased domestic business volume, likely ushering in accelerated growth.

CITIC Securities' main viewpoints are as follows:

Company Overview

Achieving a global leading copyright protection technology service company in twenty years. The company was established in 2005 in Silicon Valley, California, and listed on the Hong Kong Stock Exchange in 2018, providing one-stop digital asset protection technology and content distribution value-added services to content producers/copyright owners, streaming platforms, and internet companies through a SaaS (Software as a Service) model. Over its 20-year development, the company has established long-term cooperative relationships with leading global film companies such as Disney, Paramount, and Sony Pictures, as well as top streaming platforms like HBO, Netflix, and Amazon Prime. After 2021, the company began to focus on the domestic market, with the revenue share from the Chinese market (49.5%) reaching parity with the United States (49.3%) in 2024; at the same time, it actively seizes merger and acquisition opportunities. In November 2019, the company acquired ZEFR's business, achieving a year-on-year revenue growth of 133% the following year; in April 2022, it acquired Particle Culture, with revenue growth of 110% that year. In 2024, the company achieved revenue of HKD 2.401 billion, with a net profit attributable to shareholders of HKD 143 million, returning to a profitable track; Non-IFRS adjusted net profit was HKD 180 million, a year-on-year increase of 380.3%.

Industry Analysis: Creation, Piracy, and AI Drive Long-term Industry Growth, Market Space Exceeds USD 10 Billion The growth of the global copyright protection industry is mainly driven by three factors: 1) The continuous expansion of the scale of copyright content assets globally: According to the International Intellectual Property Alliance, the market size of the core copyright industry in the United States will reach USD 2.09 trillion by 2024. According to the China Digital Publishing Association, as of 2023, the scale of China's online copyright industry has exceeded RMB 1.6 trillion; 2) The long-standing existence of piracy and infringement: According to Muso, the number of visits to global piracy websites will reach 216.3 billion in 2024; 3) AI enhancing video creation efficiency brings infringement risks and new asset protection opportunities: According to Data Intelo, the global AIGC market size for audio-visual and other media content is expected to reach USD 34.7 billion by 2032. Infringement caused by AI secondary creation is expected to increase the demand for copyright protection from traditional content providers, and users creating original content with AI also have potential copyright protection needs.

In terms of competitive landscape, the independent copyright protection technology service industry is a segment within the vast and pirated industry; the main players in the industry have been operating for a long time and have significant regional advantages, occupying the core content asset markets in China and the United States, with annual revenue exceeding USD 300 million, leading the industry with limited competitors of similar size. In the domestic market, long videos are expected to leverage copyright protection technology to pursue revenue from video secondary creation, while new content forms such as micro-short dramas urgently need protection. The firm estimates that the global third-party copyright protection technology service market size will reach USD 4.83 billion by 2025, a year-on-year increase of 18.2%; it is expected to reach USD 10.01 billion by 2030, with a CAGR of 15.7%.

Company Advantages: Possessing three core advantages in data, algorithms, and exclusive APIs, exploring new growth points in AI video/RWA

1) The world's largest digital fingerprint database for audiovisual content: According to the company's announcement, as of April 2025, the company has accumulated over 10 million film and television program VNDA data, with VDNA gene retrieval exceeding 100 billion, supporting massive content resource retrieval and comparison across the internet.

2) Industry-leading VDNA/watermark + crawler algorithms: The company stood out among 13 global enterprises in technical evaluations conducted by the Motion Picture Association of America (MPAA) and Movie Labs, with deep Know-How accumulation in crawler and content recognition algorithms.

3) Exclusive API permissions: As the only independent copyright protection technology service provider globally with access to YouTube, Facebook, Instagram, and SoundCloud APIs, the company has a leading advantage in retrieving platform content resources. In April 2025, the company completed the acquisition of audio content recognition technology provider PEX, which has over 25 billion content fingerprints from more than 100 million record company works (three times the audio volume of YouTube), and is expected to further release performance. The company is proactively laying out new businesses such as AI video tools and RWA platforms, aiming to maintain a high growth trajectory through both internal and external expansion