The son of the "Macau Gambling King", He Youjun, has submitted his first report card after going public. On November 25th, the "first esports stock" Star Sports Weiwu released its unaudited financial performance for the first half of 2024. According to the financial report, the total net revenue for the first half of 2024 was 39.3 million US dollars, compared to 38.6 million US dollars in the same period of 2023, a year-on-year increase of 1.8%; The net loss for the first half of 2024 was $4.7 million, although it further narrowed compared to the loss of $11.3 million in the same period of 2023, it still did not achieve profitability.
He Youjun, Chairman and Co CEO of Xingjing Weiwu Group, stated in the financial report that the first half of 2024 is a crucial stage for the company to transform from an esports business to a comprehensive digital entertainment group. However, both the revenue from the esports sector and the revenue from artist management services sector continued to show a year-on-year decline in the first half of this year. According to the financial report, the operating revenue of the e-sports team in the first half of the year was 8.781 million US dollars, a year-on-year decrease of 10.8%, accounting for 22.3% of the total revenue; The revenue of the artist management service sector in the first half of the year was 21.901 million US dollars, a year-on-year decrease of 18.5%, accounting for 55.7% of the total revenue.
The revenue from artist services and e-sports team operations has both decreased
The story of He Youjun and the "first stock of esports" can be traced back to 7 years ago. In 2017, He Youjun founded V5 Esports Club. In 2020, V5 and Wuhan eStarPro announced a stock exchange merger to establish Xingjing Weiwu Group, with its headquarters located in Wuhan Optics Valley. In January 2023, Xingjing Weiwu Group completed the acquisition of the well-known Swedish esports club NIP through equity swap; After two mergers, He Youjun holds 14.2% of the shares of Xingjing Weiwu Group, becoming the largest shareholder and serving as the CEO of the group. On July 26, 2024, He Youjun led Xingjing Weiwu to officially list on the NASDAQ Stock Exchange.
This financial report is also the first transcript of Xingjing Weiwu after its listing. According to the financial report, the total net revenue in the first half of the year was 39.3 million US dollars, compared to 38.6 million US dollars in the same period of 2023, a year-on-year increase of 1.8%. Although He Youjun, Chairman and Co CEO of Xingjing Weiwu Group, stated in the financial report that the first half of 2024 is a critical stage for the company to transform from an esports business to a comprehensive digital entertainment group, both the esports revenue and artist management service revenue still showed a year-on-year decline in the first half of this year.
By sector, the revenue of the e-sports team in the first half of the year was 8.781 million US dollars, a year-on-year decrease of 10.8%, accounting for 22.3% of the total revenue; The artist management service sector had a revenue of 21.901 million US dollars in the first half of the year, a year-on-year decrease of 18.5%, accounting for 55.7% of the total revenue; The revenue from event production in the first half of the year was 8.662 million US dollars, a year-on-year increase of 376.5%, accounting for 22% of the total revenue. It can be seen that for Star Sports Weiwu, whose predecessor was mainly an e-sports club, the current revenue is still mainly contributed by the artist management service sector, while the e-sports team's operating revenue accounts for only 22.3%.
Xingjing Weiwu previously mentioned in its prospectus that it will focus on cultivating esports athletes into online artists, further extending their success in the esports field to the entertainment industry. In 2020, globally renowned pop idol and male artist Wang Jia'er has invested in Star Racing Weiwu as a partner and beneficial shareholder.
In October of this year, Xingjing Weiwu acquired the talent agency Ying Future, which focuses on short video content creation and the incubation and operation of influencer accounts. The financial report stated that this move is to strengthen the company's position in the talent brokerage field and further improve its digital entertainment ecosystem strategic layout. According to public information, Ying Future Company was established in 2019 as a new media content marketing MCN organization with core competencies such as "order based advertising services, customized production", "content originality ability", "exclusive resource advantages", and "strong exposure ability", deeply rooted in the internet celebrity market. It has major traffic accounts such as @ Dingdingmiao DXY, @ Alice Si, @ Xiaoxiao Ma Shanghuo, @ I am Li Fei, @ Kaizhixing Used Car, etc. These accounts have nearly one million or even millions of fans on the entire platform.
Expand into new business areas such as game distribution and esports hotels
The financial report also disclosed a series of new measures taken by Xingjing Weiwu since its listing - in August this year, it launched a strategic partnership with Home Inn Group to launch hotel services with e-sports as the theme; Entering the game distribution market in September and creating a fully integrated digital entertainment ecosystem; Recently, Xingjing Weiwu has actively promoted the signing of an investment intention agreement with the Abu Dhabi Investment Office (ADIO) to introduce its esports business and a wider range of gaming products into the Middle East region.
Regarding the above new measures, He Youjun stated in the financial report that the company has laid a solid foundation for the diversified revenue of the group through strategic initiatives in game distribution, talent brokerage business upgrading, and e-sports themed hotels, and has expanded its business to the Middle East market.
In addition, Hicham Chahine, Co CEO of Xingjing Weiwu Group, also emphasized in the financial report that it plans to implement multiple key strategic initiatives by the end of 2024 and 2025 to achieve sustainable growth and enhance profitability. In the field of sports events, Xingjing Weiwu is increasing its personnel and market investment, and is expected to show significant economies of scale from 2025 onwards. At the same time, the game publishing business is expected to contribute considerable revenue from 2025, which is expected to further enhance our overall profit margin.