After the successful listing, Master Lu can obtain more funds to further expand its business boundaries and obtain more ways to realize its liquidity.
218%, on the first day of the listing, Master Lu became a well-deserved star stock in October with a one-day increase of 218%.
On October 10, Master Lu officially listed on the Hong Kong Stock Exchange, stock code 3601 HK, the issue price is 2.7 Hong Kong dollars / share, the sale volume of 60 million shares, the closing price of the listing on the day of the offer of 8.6 Hong Kong dollars / share, up 218% .
Three-60 Group (601360 SH), as the major shareholder of Master Lu, also benefited from this. The stock price closed up 4.1% on October 10 and closed at 24.31 yuan/share.
Expanding business boundaries
The current Master Lu has been known to the public as the “Z Weapon” before the name change. The first software was developed in 2007 and was not shown as “Master Lu” until the second half of 2009. As a system evaluation tool in the PC era, Master Lu’s popular equipment running mode has also been praised by users and once used as a judging standard for hardware devices, making hardware configuration clear at a glance.
At that time, Master Lu won the favor of the Sanliu Group with his unique evaluation and positioning. In 2010, Sanliu Technology Group acquired Master Lu as a wholly-owned business unit of Qihoo Technology through Qihoo Technology, a wholly-owned subsidiary. Until 2014, Master Lu brand officially began to operate independently in the name of Chengdu Qilu Technology Co., Ltd.
After the independent operation, Master Lu’s business scope has changed accordingly, from a single software detection to multiple fields such as advertising and games; and with the changes of the times, the business scope has expanded from PC to mobile. From domestic expansion to overseas.
In 2015, Master Lu began to start with PC software, opened the traffic realization business and realized profitability; started to enter the game business in April 2016; entered the overseas market in 2017; began large-scale second-hand intelligent hardware sales in 2018.
Today, Master Lu is working on PCs and mobiles except hardware.In addition to detection and hardware information detection, it also includes temperature monitoring management, performance detection, drive detection, cleaning optimization, etc., which are intuitive values for users, and allows users to easily understand each value. Other applications include mobile emulation masters, which allow users to simulate the use of mobile phones on their computers; Dual Space, which helps users operate multiple social accounts on the same device; smart phone AI chip performance evaluation application AI Mark and cleanable cache files and A cleanup application that releases mobile device memory, Easy Clean, and more.
After the successful listing, Master Lu can obtain more funds to further expand its business boundaries and obtain more ways to realize its liquidity.
Expansion brings diversity and risk resistance
With the gradual expansion of business boundaries, Master Lu’s total revenue has also expanded accordingly. According to the data released in the prospectus, in the whole year of 2018, Master Lu’s total income was 320 million yuan, a year-on-year increase of 161%; from 2019 to April 30, the total revenue was 114 million yuan, a year-on-year increase of 16%.
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Advertising business occupies half of the country
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Electronic device sales business is “blessed”
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Diversification improves risk resilience
In the revenue structure of Master Lu, the online traffic realisation business is the largest source of total revenue. From 2016 to 2018, the online traffic realized income was RMB 0.7 billion, RMB 120 million and RMB 220 million respectively. The proportion of total revenue reached 99%, 98% and 68%. As of the first four months of 2019, the online traffic realisation business contributed approximately 74.1% of total revenue.
At present, the online traffic realisation business consists of two parts, namely “online advertising business” and “online gaming service business”. Among the two major businesses, the proportion of online advertising business is mostly, and its revenue contribution can account for more than half of the total revenue. It can be said that it is half of Master Lu.
In terms of advertising business alone, the revenue contribution from the PC side is currently greater. As of 2018, the revenue of the PC terminal (from personal computer software) in the advertising business of Master Lu reached 138 million yuan, a year-on-year increase of 54%. The higher income of the PC is mainly due to the fact that the masters of the software, Master Lu, and the mobile phone simulation master (which allows users to simulate the use of mobile phones on the computer) are PC-based applications.
With the development of mobile phone software such as Master Lu and mobile phones such as Dual Space and Easy Clean, mobile advertising revenue is expected to become a new growth engine for advertising business. In 2018, the revenue from mobile terminals reached 36.1 million yuan, a year-on-year increase of 355%. This growth rate is much higher than the growth rate of PC-end advertising revenue, showing the ability to expand in the future.
Observing the income structure of Master Lu, we can find that in 2016, almost all of Lu’s income sources were contributed by the online advertising business, and its revenue accounted for 96%, but the advertising business camp in the past two years. The revenue ratio has gradually declined, and the electronic equipment sales business has begun to occupy a place.
Based on the accumulation of hardware and system evaluation machine monitoring technology, Master Lu has a unique advantage in the sales and identification of intelligent hardware, especially for second-hand goods. Unlike the standardization of new products, the sale of second-hand goods is obviously more complicated and more diverse. For example, phones of the same brand of the same brand are basically the same standard, but second-hand phones of the same brand and the same model have become completely different personalized products because of the previous use.
For such personalized products, the identification and evaluation of third-party organizations has become an important reference indicator for consumers to buy second-hand goods. Appraised second-hand electronic equipment is often more reasonable to give consumers a reasonable guarantee, and this is the opportunity for Master Lu.
To this end, the company began selling smart accessories in January 2015, and began selling certified second-hand and original smartphones in August 2017, and began selling other electronic devices in November 2018. With the gradual advancement of electronic sales business, from 2016 to 2018, Lu’s electronic equipment sales revenue was RMB 408,000, RMB 2.32 million and RMB 103 million, respectively, accounting for 0.6%, 1.9% and 32.1% of total revenue. .
The company expects that sales of electronic devices will be one of the main sources of revenue in the next few years, which means that sales of electronic devices will occupy an increasingly important strategic position in the next few years. In view of the company’s extensive experience in hardware testing, the sale of certified second-hand electronic equipment will help the company establish a new brand image in the future.At the same time, bring more growth potential.
In April 2016, he began to engage in online games. In 2018, he began to carry out large-scale second-hand intelligent hardware sales. With the expansion of business boundaries, Master Lu’s commercialization methods also showed diversified characteristics. The business model of advertising has become more and more popular in advertising, games, and hardware sales.
Diversification of income can help Master Lu increase revenue sources and increase the growth rate of income scale. On the other hand, it can help companies improve their ability to withstand risks.
In the whole year of 2018, the entire Internet industry has seen two major factors that cannot be ignored. The first is that since the beginning of 2018, the suspension of the game version has caused the game industry to encounter a cold winter. Affected by this, companies that pay for their main business such as game payments have been hit hard. However, the housing leaks have been in the rain, and the depressed market has begun to spread to the advertising industry. Not only the game companies, but other advertisers have also begun to cut the advertising budget. In the third quarter of 2018, the advertising industry began to fall into a downturn. The growth of revenues of large advertisers led by Weibo and Baidu began to decline rapidly.
It can be seen that the company will inevitably encounter the downturn of the industry environment and other force majeure factors in the process of operation, but if the company’s income source is sufficiently diversified, then it can be in one or two The business was in a downturn and successfully helped the company weather the storm.
To this end, we can see that as business boundaries expand, the diversification of revenue sources and business models will help Master Lu improve his ability to withstand various risks.