MultiCloud Holdings Limited (hereinafter referred to as 'MultiCloud') successfully listed on November 9, 2022. The company plans to issue 1.6 billion H shares, of which 90% will be international offerings and 10% will be public offerings. The issue price per share is HK$1.96, raising a net amount of approximately HK$250 million.
During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.
Investment highlights
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The company is a leading sports event content marketing service provider;
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The company can provide integrated marketing solutions consisting of five major categories of marketing services; -
The company has strong IP content operation and commercialization capabilities; -
The company has stable cooperation with many clients and possesses the capability to integrate online and offline media channel resources; -
The company has a visionary and experienced management team.
According to the Frost & Sullivan report, in terms of operating revenue for 2021, the company:
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It is a leading sports event content marketing service provider in China;
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We have been successful in event content marketing services; -
During the past performance period, integrated marketing solutions were provided to over 200 clients; -
Has multiple unique IP content marketing projects; -
The growth rate of the sports event content marketing service market is expected to exceed 29% over the next five years.
Overview of the Marketing Service Market in China
In 2021, the four major mainstream marketing media in China were computers, mobile devices, newspapers and magazines, and television. According to a Frost & Sullivan report, the market size of marketing services increased from RMB 581.4 billion in 2016 to RMB 1,230.3 billion in 2021, with a compound annual growth rate of 16.2%. As consumption continues to upgrade, consumers' brand awareness will also improve. It is expected that the market size of marketing services will reach RMB 2,334.8 billion by 2026, with a compound annual growth rate of 13.7% during this period.
Market scale of China's marketing service industry
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Overview of China's Content Marketing Service Market
Content marketing services refer to business communication activities that use content as a medium and aim at marketing purposes, combining marketing information with independent content. According to a Frost & Sullivan report, the content marketing service market grew from RMB 605 billion in 2016 to RMB 2169 billion in 2021, with a compound annual growth rate of 29.1%. Due to the rapid development of technology and consumers' acceptance of marketing information, it is expected that the content marketing service market will grow to RMB 6697 billion by 2026, with a compound annual growth rate of about 25.3% from 2021 to 2026.
At the same time, the event content marketing market increased from RMB 165 billion to RMB 256 billion from 2016 to 2021, with a compound annual growth rate of 9.2%. Due to the outbreak of the pandemic, activities mainly using offline channels were cancelled and delayed, leading to a decline in the market scale of event content marketing in 2020. It is expected that it will return to normal as China effectively controls the pandemic. During the same period, the digital content marketing service market grew from RMB 44 billion to RMB 1913 billion, with a compound annual growth rate of 34.2%. The event content marketing service market and the digital content marketing service market are estimated to reach RMB 710 billion and RMB 5987 billion respectively by 2026, with compound annual growth rates of 22.6% and 25.6% from 2021 to 2026.
In 2021, the digital content marketing service market in China was fragmented. The top five marketing service companies accounted for about 5% of the market size of digital content marketing services. The company's revenue in 2021 was RMB 5.2 million, accounting for 0.03% of the Chinese digital content marketing service market in 2021.
Market size of the content marketing service market in China, classified by marketing tools
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Overview of the Sports Event Content Marketing Service Market in China
Activity content marketing services can be divided into two main categories: sports event content marketing and other event content marketing. Sports event content marketing refers to the marketing services that rely on the content of marathons, triathlons, cycling events, and other sports competitions. On the other hand, other event content marketing generally includes marketing services that rely on fashion shows, concerts, job fairs, and other events.
According to a Frost & Sullivan report, the market scale of sports event content marketing in China increased from RMB 1.2 billion in 2016 to RMB 3.3 billion in 2021, with a compound growth rate of 22.4%. Among them, in 2020, due to the impact of the pandemic, many offline activities were cancelled or postponed, resulting in a decline in the sports event content marketing service market in 2020.
Looking ahead, with the effective control of the pandemic, the market for sports event content marketing services is expected to grow to RMB 122 billion in 2026, with a compound annual growth rate of 29.9%.
Market size of activity-based content marketing service market in China by activity type
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Overview of China's Digital Advertising Service Market
Digital advertising refers to the direct marketing and placement of advertisements for advertisers' brands and products through various online media channels, without combining marketing information with IP content. It provides one-to-one marketing services and only serves one customer in a single marketing campaign. Since digital advertising uses modern technology to execute the marketing process, it also has several advantages over other marketing methods. Digital advertising services have better marketing effectiveness in attracting new consumers, and they can remotely promote products and services, saving time and costs.
With the continuous penetration of the internet, the digital advertising service market has increased from RMB 206 billion in 2016 to RMB 502.7 billion in 2021, with a compound annual growth rate of 19.5%. With the development of new technologies such as big data and artificial intelligence, it is estimated that the market size will grow to RMB 980.1 billion by 2026, with a compound annual growth rate of 14.3% from 2021 to 2026.
It is estimated that there will be over 100,000 digital advertising service providers in China in 2021, with a relatively fragmented market. The top five market participants account for about 8.9% of the total market size. The company's revenue in 2021 was approximately RMB 8.8 million, accounting for about 0.02% of the Chinese digital advertising service market in 2021 based on revenue.
Market scale of China's digital advertising service industry
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Overview of China's SaaS Marketing Service Market
The scope of SaaS marketing services includes initial creative concepts to final delivery. SaaS marketing combines advertising technology with marketing technology to improve advertising effectiveness and reduce the cost of marketing services. In addition, SaaS marketing services can help marketing services achieve standardization. SaaS marketing services are an extension and transformation of traditional marketing methods.
According to a Frost & Sullivan report, the market size of the SaaS marketing market increased from RMB 400 million in 2016 to RMB 3.3 billion in 2021, with a compound annual growth rate of about 52.5%. Meanwhile, during the pandemic, the SaaS marketing market grew more rapidly from 2020 to 2021. The inconvenience brought about by on-site work promoted the use of SaaS tools, which brought convenience to enterprises. The scale of the Chinese SaaS marketing market is expected to grow to RMB 10.9 billion by 2026, with a compound annual growth rate of about 27.0% from 2021 to 2026.
The SaaS marketing service market in China is relatively fragmented, with about 600 to 1,000 companies operating in the market as of 2021. In 2021, the top five SaaS marketing service companies accounted for approximately 48.2% of the Chinese SaaS marketing service market. In 2021, the company's SaaS marketing service market revenue was about RMB 1.06 billion, accounting for approximately 0.3% of the Chinese SaaS marketing service market share.
Market scale of China's SaaS marketing service market
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Cost Analysis of the Chinese Content Marketing Market
Human resource costs typically account for a significant portion of the cost in China's content marketing service market, mainly because they require employees to create a large amount of new content to keep up with new trends. Content marketing services have been incorporated into the culture, sports, and entertainment sectors. The average annual salary of employees in these sectors has increased from RMB 79,900 in 2016 to RMB 125,000 in 2021, with a compound annual growth rate of 9.4%. Looking ahead, to align with the development of the macroeconomy and marketing service industry, the average annual salary may continue to grow in the future and reach approximately RMB 185,300 by 2026, with a compound annual growth rate of 8.2%.
Average annual salary of employees in the cultural, sports and entertainment industries
2016 to 2026 (estimated)
Source: Frost & Sullivan report
Key market drivers of the Chinese content marketing market
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The increasing popularity of sports events
According to the 'Opinions on Implementing the Healthy China Initiative and the Establishment of the 'Healthy China Initiative Recommendation Committee' by the State Council, both the Chinese government and its residents have begun to pay more attention to personal health and promote sports events. In addition, the health literacy level of Chinese residents has risen from about 10% in 2015 to about 25.4% in 2021, indicating that Chinese residents are now pursuing a healthier lifestyle and are willing to participate in more sports events. Furthermore, the State Council recently announced the 'National Fitness Program (2021-2025)', emphasizing the importance of fitness and community sports events. In this context, an increasing number of content marketing service providers rely on sports event marketing to sell their products and services. The growing popularity of sports events is seen as a future trend in the Chinese activity content marketing service market.
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Develop technology for precise marketing
Traditional marketing service providers typically place advertisements on a single consumer without analysis. With the vigorous development of technologies such as big data and artificial intelligence, content marketing service providers can accurately match customers with target audiences based on specific industries or types of end-customers according to several types of advertisements. Precision marketing has improved marketing methods, making consumers more willing to accept attractive content products and services that interest them, thereby promoting the development of China's content marketing service market. For example, companies use artificial intelligence systems and algorithm-driven technologies to provide specific and precise marketing template recommendations based on customers' preferences and interests.
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New marketing trends targeting the younger generation
The younger generation, with continuously rising purchasing power and an increasing population, is now becoming the main consumer group. Therefore, content marketing services must adapt to the ever-changing preferences of the younger generation. As media such as microfilms become increasingly popular and spread among the younger generation, content marketing service providers are now implanting advertisements into these media to gain the favor of the younger generation. For example, the company uses online short videos as the core carrier of its digital content marketing services. These short videos can be disseminated to core consumers through different online platforms such as Weibo and Kuaishou. Therefore, the emerging marketing trends targeting the younger generation are leading the content marketing service market towards a higher stage of development.
Frost & Sullivan has extensive research experience in the communications, media and technology industries. It assists well-known enterprises in successfully listing on capital markets. Successful listings include: De Ying Holdings (2250.HK), Qingpi Games (6633.HK), Pop Culture (CPOP.NASDAQ), The Gruffalo (02125.HK), Kuake Music (KUKE.NYSE), Changxin Media (XJB.SGX), Glorious Tomorrow (01351.HK), Yala Technology (YALA.NYSE), Le Xiang Interactive (06988.HK), Zurong Entertainment (09990.HK), Litian Film Group (09958.HK), Nine Dragons Digital Entertainment (01961.HK), Yusheng Culture (01859.HK), Luji Technology (01745.HK), New Stone Culture (01740.HK), Heartbeat Company (02400.HK), Travel Orange Culture (08627.HK), Friend Times (06820.HK), Wanda Sports (WSG.NASDAQ), Tuyi Holdings (01701.HK), Hometown Interactive (03798.HK), Feiyang Group (01901.HK), Huoyan Holdings (01909.HK), Lingbang Group (02230.HK), Haitian Tianyue Travel (01832.HK), Zen You Technology (02660.HK), Ruhuan Holdings (RUHN.NASDAQ), Fosun Tourism Culture (01992.HK), Dream World (01119.HK), Yingke Interactive (03700.HK), Huya (HUYA.NYSE), Razer (01337.HK), Read Wen Group (00772.HK), Meitu (01357.HK), China Digital Video (08280.HK).
Recommended Reading
03. Frost & Sullivan assists Pop Culture Group in successfully going public in the US (CPOP.NASDAQ)
05. Frost & Sullivan assists Kuake Music in successfully going public in the US (KUKE.NYSE)
06. Frost & Sullivan assists Changxin Media in successfully going public in Singapore (XJB.SGX)
08. Frost & Sullivan assists YALA.NYSE in successfully going public in the US
19. Frost & Sullivan assists Wanda Sports in successfully going public in the US (WSG.NASDAQ)
31. Frost & Sullivan assists Huya Live in its successful listing on the US stock market (NYSE:HUYA)
32. Frost & Sullivan assists Razer in successfully going public in Hong Kong (01337.HK)
34. Frost & Sullivan assisted Meitu in successfully listing on the Hong Kong Stock Exchange(1357.HK)
*The above order is not sequential and is arranged in reverse chronological order based on listing time.
