China Digital TV Holding

Transcription

1 China Digital TV Holding June 2014

2 Company Overview Leading Provider of Systems to China s Digital TV Market Company Overview Exchange Ticker Market Cap Headquarters Employee New York Stock Exchange STV US$200M Beijing, China 700+ (including approx. 400 R&D staff) 2

3 Conditional Access Systems (S) & Digital Rights Management () S Core technology for Pay TV market. Protects the security of signal transmission through signal encryption in the head end and signal decryption in the terminal end. Transmission Channels: Cable, satellite and terrestrial TV. Using the leading security technologies in content encryption, access control, key replacement, two-way authentication, fingerprint watermark, clone detection and chromosome tracking to protect contents. Can be used in cable TV, IPTV, Internet TV and any other Pay TV platforms to protect content. Smart Card Head End System Terminal End System 3

4 Competitive Advantages of the Company High Quality Mature Industry Chain Full Service Stabilized Systems High security Cracking prevention Intellectual property System that can support millions of cable users Over 50% market share Supports multiple forms of digital TV transmission, including satellite TV, terrestrial TV, and Cable TV Open system: simulcrypt can be shared with other systems Mature industry chain Flexible integration with head-end system and STB, decreasing the cost of digitalization Best after-sales services Outstanding technical support team Tailored services Quick response for maintenance Meeting different needs of different operators 4

5 China Market Large and Diversified Customer Base Domestic market Smart Card Shipment Volume - Domestic Market (Million) China Market provincial operators use STV s systems More than 100million smart cards accumulatively shipped in China market as of Mar 31, % market share in year of 2013 *Data Source: Zhongguang Luoda Report and company data 5

6 Overseas Market Expanding in Overseas Markets Overseas markets Europe: Belarus Africa: Namibia Ghana Tanzania Malawi North America: Costa Rica Antigua South America: Venezuela 0.8 Bolivia Smart Card Shipment Volume - Overseas market 1.4 (Million) 1.6 Asia: Thailand Myanmar Malaysia India Indonesia Nepal Georgia Afghanistan Tajikistan Mongolia Russia STV has shipped smart cards to 20 countries all over the world. The Company expects 50% annual growth in smart card shipment in the future. More than 4.2million smart cards accumulatively shipped in overseas market as of Mar 31,

7 Future Growth Catalysts for Smart Card Shipments (Million) 2.6 STV Overseas Smart Card Shipment Volume China s Terrestrial TV & Direct TV shipment outlook (Million) Future Catalysts 2014E 2015E 2016E 2017E 2018E * Data Source: Company forecasts * The Company expects a growth of 50% on smart card shipment in overseas market China s Cable STB Organic Increase STB Replacement (Million) E 2015E 2016E 2017E 2018E * Data Source: Company forecasts & Luoda Reports * From 2014 to 2018, the Company expects that the organic growth in Cable users will be 5% * Suppose that Cable operators begin to replace STB from E 2015E 2016E 2017E 2018E * Data Source: Company forecasts & Luoda Reports * From 2014 to 2018, the Company expects that the penetration rate of terrestrial and Direct TV using cards will be 49%, with an 8% STV s market share (Million) STV Smart Card Shipments E 2015E 2016E 2017E 2018E * Data Source: Company forecasts * Suppose that STV will maintain a 50% market share in the next five years Overseas markets Terrestrial TV & Direct TV Organic growth in Cable users STB replacement: 1Two way STB 2HD STB 3Replacement 4Secondary STB Network Broadcasting Platform 7

8 Network Broadcasting Platform () Helping Operators Expand Their Businesses Traditional user base and coverage area Larger user base and coverage area after business expansion TV Users TV Users Mobile Users Tablet Users Computer Users User base Operators can expand their user base from 210 million TV cable households to 630 million mobile and air sharing users Location base Operators can expand their location base from home only to a variety of public places, such as airports, railway stations and schools Home Home Home Airport Time base Operators can expand their time base from evening primetime only to 24/7 Railway Station Bus Stop 8

9 Business Expansion Model Traditional business - Core Advantages Cable Operators STB TV 1 2 Reduces deployment costs and enhance user coverage Provides various operation modes via mobile app Traditional business extension 3 Enhances individual coverage Cable Operators TV PC Pad Mobile Phone Head-end System Gateway APP download Airports Railway stations Coaches Schools 9

10 Development goals TV Content Services Smart Terminals TV Everywhere Live shows Multi screen Home Dormitory VOD TV Watch Back Local Video Integrate different content resources and provide users with a variety of watching experiences Tablet PC Airport Bus stop Railway station Bank Smart phone Hospital Restaurant 10

11 Market Forecast - User Coverage - Shipment Volume 15 Cumulative user coverage (Million) Market penetration 86% 100% 6 (Million) shipment volume 13 65% 77% % 50% % % E 2015E 2016E 2017E 2018E -50% 2014E 2015E 2016E 2017E 2018E * The Company expects that it will cover 10% of public hotspots * The Company expects that it will maintain a 50% market share in * Data Source: Company forecast

12 Cyber Cloud Video Cloud Computing Covering a Wider Range of Customers Cloud 云游戏 Games Cable TV IPTV 4G Mobile Users 12

13 Cyber Cloud Video Cloud Computing Value Proposition Mobile Game Distribution Platform Game Internet AD Ad Education Operators Cloud Streaming Platform AD TV users TV Games Market Share Gaming Web games, 15% Mobile games, 14% Others, 6% Clients games, 65% Mobile Users Mobile Terminal Cloud computing solutions can be deployed on the cable TV platform. The cloud platform can now also be deployed on IPTV platforms operated by telecom operators, to provide the same cloud services for IPTV users In the 4G age, cloud computing solutions can also be deployed on the mobile platform, pushing more web games and more client-based games to users. 13

14 Cyber Cloud Video Cloud Computing Business Model Joint operation Product sales Streaming management platform (operators) App operation platform (concurrent sell) Fruit Ninja Angry birds Game joint operation Streaming platform IPQAM Boxing Penalty VOD Education Wukong Literacy App promotion Interactive TV market Interactive external devices Motion-sensing camera Motionsensing controller Spinning English Channel Online Graffiti 14

15 Cyber Cloud Video Cloud Computing Product Lines Cloud games Core players, old players Cloud fitness Fitness at home Cloud motion sensing World-leading motion-sensing games Cloud education Pre-school, early childhood parent-child interaction 15

16 Cyber Cloud Video Cloud Computing Core Valuation Integration of upstream and downstream industry chains Chips Cloud platform Terminals Games Chip partners Terminal-end systems partners Game joint operation partners 16

17 Cyber Cloud Video Cloud Computing Cyber Cloud vs. Others Solutions Smart Terminal HD Two-way Cyber Cloud Investment costs 300RMB 200RMB 20RMB Upgrading and maintenance Average Slow Fast User experience Good Average Good Controllable management Average Average Good Providing services and app distribution platform based on Cyber Cloud computing to broadband operators Excellent compatibility, simple to transplant, and fast to deploy Concentrated Investment in cloud platform and lower per-household cost 17

18 Cyber Cloud Video Cloud Computing Market Coverage Cable market Telecom market Gehua Beijing Unicom Nanjing Jiangsu Dalian Shijiazhuang Shanghai Telecom Hebei Unicom Guangdong telecom Jishi Fujian Telecom Shanxi Xinjiang Qingdao Hunan Shandong Unicom 4G market China Telecom Chongqing Kunshan Changshu Anshan Ningbo Users coverage: Cable: 60 Million; IPTV: 8 Million 18

19 Cyber Cloud Video Cloud Computing Market Coverage China's total interactive TV subscribers Cyber Cloud penetration subscribers (Million) (Million) E 2015E 2016E 2017E 2018E 2014E 2015E 2016E 2017E 2018E * The Company expects a cloud streaming platform penetration rate of above 50% * The Company expects Cyber Cloud to maintain a 50% market share of the cloud streaming platform market * Data Source: Company forecast 19

20 JOYsee + Solutions Core Product of Post-STB Age Product Introduction Traditional Business Core advantage Cable Operators STB 电视 Live 1 2 Reduces STB investment costs, while retaining traditional users Improves the user experience Traditional Business Extension Dongle + APK 3 Enhances Internet access via smart TV; smart terminal manufacturers can provide more forms of TV Internet services. Live Mini HD STB Cable Operators Directly connected to the TV 20

21 JOYsee + Solutions Core Product of Post-STB Age Business Model Gehua Cable network Jiangsu Cable network Hunan Broadcasting To provide: & VAS service $$$ Revenues from: Basic viewing fee & SARFT VAS revenue-sharing Basic Service VAS Service Licensing Mini HD STB & APPs Products package Xiaomi $$$ Revenues from: Sales of Mini HD STB & SARFT and VAS revenue-sharing APP software $$$ $$$ $$$ Customers Lenovo Smart TV LeTV Skyworth $$$ Revenues from: Sales of Smart TV Video, Gaming, Payment, Education etc Apps 21

22 JOYsee + Solutions Core Product in Post-STB Age Future Market Mini HD STB Partnerships with Cable Operators (Million) Partnerships with Television Manufacturers E 2015E 2016E 2017E 2018E * The Company expects that Mini HD STB will account for 15% of overall smart TV shipment volumes * The Company expects that JOYsee will maintain a 50% market share of the Mini HD STB market * Data Source: Company forecast 22

23 Future Development Direction of the Company About Overseas operations : About Two-way network transformation : Leveraging its strengths in overseas markets, the Company will help operators (e.g. Beijing Gehua) to develop digital TV businesses overseas. About ikan : The company will build a signal platform through increased penetration of. The user can leverage the platform to film what is happening and share it via webcast in real time. The company will develop the core technologies of the two-way network transformation through investment and cooperation. 23

24 Thank you!