Seoul will become the world's first smart city in the metaverse concept, and metaverse concept stocks continue to rise.

Since the COVID-19 epidemic, more and more activities have shifted online, and after a period of silence in the capital markets within the internet plus-related technology circle, a new investment concept has finally been successfully created in the second half of this year: Metaverse. Currently, the metaverse is at the forefront of completely changing the gaming industry and other industries. Although the public has not yet reached a final consensus on what the metaverse really is, and most projects have not yet materialized, the global technology market is experiencing a capital feast driven by the energy of the metaverse.

Seoul will become the first metaverse city in the world.

Recently, the new term "metaverse" has been very popular. The movement initiated by Facebook and other major tech companies has driven many enterprises to lay out their metaverse strategies. It has become the new battleground for major companies, first with Mark Zuckerberg's shameless name change, followed by Pony Ma flaunting the metaverse muscles in the financial report meeting. In addition, Nvidia, Microsoft, ByteDance, Huawei, Alibaba, and even Disney have all conveyed relevant messages about the metaverse, drawing significant attention globally.

On November 11th, the first domestic metaverse industry association was officially established, announcing November 11th as "Metaverse Day" and releasing the "Metaverse Industry Declaration", once again igniting the metaverse. Surprisingly, even the usually low-key Netease has made so many moves related to the metaverse that it is hard to ignore. Netease founder Ding Lei's views on the metaverse during the Q3 earnings call have become a hot topic on Weibo. During the call, Ding Lei stated that "Netease is prepared in terms of metaverse-related technologies and regulations." On November 23rd, a Xiaomi spokesperson responded to the company's layout for the metaverse, indicating that Xiaomi is paying attention to surrounding opportunities, has made many related technological reserves, and has made relevant investments in mobile phones, videos, displays, and other areas, preparing for the metaverse.

It is worth mentioning that the concept of "Metaverse" going mainstream has so far only remained a trend in the realm of capital, with no clear expressions from governments of various countries. However, South Korea's Seoul has now become the "first mover". Recent reports state that Seoul, South Korea will become the world's first metaverse city. The Seoul city government announced on November 3rd its plan to invest $2.2 billion by 2025 in researching the technological field related to the metaverse, to provide city public services in the virtual world. South Korean business giants such as Samsung, SK Telecom, and LG Group have also entered the field, with Samsung Group launching the "Metaverse Fund" seeing daily inflows of approximately 1-2 billion Korean Won.

Recently, the Seoul city government in South Korea released the "Seoul Metaverse Five-Year Plan", announcing the initiation of building a metaverse administrative service ecosystem across the city government's business areas in economy, culture, tourism, education, and petitions starting from next year in three phases. This is the first work plan proposed by a local government in South Korea in the field of virtual reality services, coming at a time of growing demand for non-contact communication post-pandemic. Split into phases of "Startup (2022)", "Expansion (2023-2024)" and "Completion (2025-2026)", next year's work will focus on constructing the platform, introducing services in seven major areas including economy, education, and tourism, with a total planned investment of 3.9 billion Korean Won. Through this "Seoul Plan", the Seoul government is committed to building the metaverse as an immersive internet relying on virtual reality, allowing citizens to better enjoy public cultural services via the internet. Some analysis suggests that as part of the "smart city" trend, many city governments are using digital technology and real-time data to optimize city operations, with the metaverse potentially being the next stage. If successful, South Korea can expand the utility of the metaverse to millions of citizens who would have otherwise been excluded. Of course, while the news of Seoul introducing the metaverse has caused a stir, it has also faced some challenges and doubts. For example, the Seoul authorities have not disclosed more details of this plan, which is still in the conceptual stage, and the operation principle and development plan of the metaverse have been subject to different interpretations by participants worldwide.

Metaverse continues to heat up, and concept stocks remain active and strong.

Recently, with many tech giants such as Facebook, Microsoft, Tencent, and Bytedance rushing in, the metaverse has instantly become popular all over the internet. In the primary market, tech companies related to the "metaverse" also attract capital attention. In the past few weeks, companies including Warner Music and Disney have discussed the "metaverse" in their earnings conference calls. Chinese investors hoping to profit in the virtual world also have many choices. Last week, game engine company Unity announced plans to acquire "The Lord of the Rings" special effects technology company Weta Digital for over $1.6 billion to further enhance its "metaverse" products. Recently, Sensetime Capital (AI industry fund) led the domestic 3D visual technology company Mantis Vision's Series A financing of 0.138 billion yuan, for the research and development of 3D foundational technology hardware and software related to the "metaverse" and content creation. At the same time, in the secondary market, domestic GPU company Jingjia Micro (300474.CN) has seen a recent continuous increase in stock price, reaching over 200 yuan, with a market cap exceeding 60 billion yuan; gaming company Zqgame (.CN) has also seen a substantial increase in stock price due to riding the wave of the "metaverse," soaring by over 3 times in just two months, with a market cap skyrocketing to the current 10 billion yuan.

In a research report by Anxin Securities, it is stated that Facebook and Microsoft successively entering the metaverse market are driving the development of the VR industry. The metaverse is a virtually dimensioned yet temporally real digital world aimed at forming a virtual reality system that encompasses the internet, hardware, and users, expected to generate a considerable market in the future. According to PwC's estimate, the metaverse market size is projected to reach $1.5 trillion by 2030. Minsheng Securities also expressed that domestic tech giants are relatively late in layout of the metaverse, lacking advantages compared to foreign ones in hardware and foundational technologies. With the listing of Roblox and the catalyst of Facebook's name change event, domestic giants are accelerating the layout of the metaverse, aiming to replicate the development path of the mobile internet, being first in the latecomers, and fully enjoying the high prosperity dividend of the metaverse industry. Investment opportunities in the metaverse span from hardware to software, with a focus on related technology companies that build the foundational architecture of the metaverse, as well as application-side games, videos, and other content companies.

In the secondary market, on November 24th, the Shanghai and Shenzhen stock markets experienced a slight decline, but stocks related to the metaverse continued to strengthen, leading the way once again. By midday, Jinyun Laser (300220.CN) saw two consecutive trading limits up 20%, Anhui Tatfook Technology (300134.CN), Chuan Network Media (300987.CN) surged by 20% hitting the limit, Avit Ltd. (300264.CN) rose by over 16%, Zhejiang Jinke Tom Culture Industry (300459.CN) rose by over 8%, and Funshine Culture Group (300860.CN) climbed over 6%, with Hubei Century Network Technology Inc. (300494.CN), Silkroad Visual Technology (300556.CN), and others also rising by over 5%.$Svg Tech Group (300331.SZ)$、$Sumavision Technologies (300079.SZ)$、$Capitalonline Data Service (300846.SZ)$Up more than 6%, Hubei Century Network Technology Inc. (300494.CN), SilkRoad Visual Technology Inc. (300556.CN) and others also surged over 5%.

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