How fascinating the meta universe story is, investors should be wary

  Meta Universe has become one of the hottest concepts in the capital market recently. Among the top ten stocks in terms of gains in November, the meta universe concept stocks accounted for two seats. On November 24, the Meta Universe Index hit a record high.
  Metaverse concept stocks continue to be popular, and regulatory inquiries are also increasing. As of November 25, the Shanghai and Shenzhen Stock Exchanges issued 8 regulatory decisions, announcements or work letters to the Yuanyuan Universe Concept Company that month, and as many as 14 letters of concern. The inquiry directly refers to the relationship between the main business of the listed company and Meta Universe, and requires clarification on whether a stable business model can be formed, whether there is a “hot spot” behavior, etc. It can be said that the meta-universe concept stocks are in full swing, adding another type to the case pool of timely supervision and targeted supervision.
  Compared with the fundamentals of related companies, the possibility of a mismatch of capital factors has greatly increased in this round of meta-universe concept stocks.
  From the perspective of market conditions, the concept of meta-universe rose rapidly again after a round of surge, and irrational factors increased significantly.
  Unlike the rapidly rising stock prices, the performance of related companies has not exploded, or even the opposite. Among the top ten meta-universe stocks with monthly gains, three companies lost money in the first three quarters of this year. Among them, Jiachuang Video, the largest gainer, lost 37 million yuan in net profit. If you look at the growth situation, half of the companies’ net profits have fallen.
  The valuation aspect is even more worrying. Among the top ten concept stocks with gains, 5 of them have a dynamic price-to-earnings ratio (TTM) that cannot be calculated due to negative earnings per share. Among the remaining 5, the lowest price-to-earnings ratio is 58 times, and the highest capital online PE (TTM) is as high as 276 times. The median price-to-book ratio (MRQ) is more than 6 times, of which Jiachuang Video’s price-to-book ratio is 22 times. The valuation is indeed high.
  From the perspective of commercial operations, Meta Universe is just a concept and does not yet have the basis for large-scale operations. What is the meta universe? The simplest understanding is the so-called parallel virtual world. Meta Universe is based on “hard technology”, including computers, network equipment, integrated circuits, communication components, new display systems, mixed reality devices, precision free-form optical systems, and high-pixel high-definition cameras. The industrial chain formed by Metaverse includes micro-nano processing, high-end manufacturing, high-precision maps, optical manufacturing, etc. Ultimately, the operation of the meta-universe requires energy in physical form.
  Take the application of VR as an example. In the so-called meta-universe world, VR equipment assumes the role of an entrance and is one of the core devices for people to enter the meta-universe. As early as 2015 to 2016, more than 1,000 VR companies received angel round investment, but many companies have transformed or died after the A round of financing. Up to now, “Nausea after watching for a long time” is still people’s first feeling after experiencing VR.
  Related companies scramble to hot spots and push up their stock prices, which is worthy of vigilance. For example, the chairman of a company recently issued an open letter introducing the development concept of “Rainbow Universe” and announced that more than 130,000 users have made appointments. The company’s stock price rose by the limit for two consecutive days, and the total market value increased by nearly 5 billion yuan. The Shanghai Stock Exchange promptly issued a regulatory warning to the company and related responsible persons. The company subsequently issued an announcement stating that it had not participated in the research and development of AR, VR, MR and related hardware technologies, and had no related hardware technology reserves or patents. At present, “Rainbow Universe” products have not yet been accepted. Into the aforementioned hardware technology. The company reminds investors to pay attention to risks.
  Another example is that a certain Meta Universe concept company recently launched a 10.6 million share equity incentive plan after its stock price rose by more than 370% in three months, but the company’s actual controller father and son took half of the share, and the performance evaluation conditions were low. The company immediately drew an inquiry letter from the Shenzhen Stock Exchange.
  Looking back at history, when various concepts were hyped up, “fascinating stories” have been told, but the hype that lacked sufficient fundamentals to support it ended up in a feather. Regarding the signs of problems that may affect the healthy and orderly development of capital elements, timely supervision and targeted supervision are not only the requirements of the three principles, but also the fundamental interests of investors. For the meta-universe concept, how hot it is, how calm the minds of investors are.

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