WiMi’s IPO: The Future Of AR In China Looks Good

WiMi Hologram Cloud Inc. (NASDAQ:WIMI) a Chinese producer of augmented reality (AR) content for advertisers and entertainers, has released further details about its planned IPO. The company had originally planned to go public last year but placed its plans on hold. In January, Capital Watch reported that WiMi had planned to resume its plans and raise up to $38 million by selling 4 million shares.

But the world has drastically changed since early January, and WiMi now plans to raise a maximum of $37.5 million while selling 5 million ADS’s which represent two ordinary Class B shares each. WiMi is aiming for a market cap between $326 to $443 million according to filed SEC documents, and bookrunners include The Benchmark Company, Valuable Capital, and the Maxim Group.

China appears to be in a stronger economic position relative to the West now, and investors chasing yields may look at a company which is growing rapidly and conclude that this is a good investment. There is a great deal to like about this company’s growing potential and good finances, though it is far from free gift cards for its investors.

The AR Business

WiMi is a 5-year company which states in its F-1/A that “We offer augmented reality ("AR")-based holographic services and products to cater to our customers' needs.” These offering consist of holographic AR advertising, which made up 83.1% of its 2019 first half revenue, and holographic AR entertainment products which covered the remainder.

The growing AR industry is by far the best reason to be interested in WiMi. There has been some debate about whether AR or virtual reality (VR) will be more popular over the long run, though the true answer is probably that each have specific niches. Grand View Research reported that the Asia-Pacific AR market will grow from $640 million in 2015 to nearly $50 billion by 2024. It specifically calls out its potential in the retail sector, which is good news for WiMi which is betting big on AR advertising.

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