In the age of the digital renaissance, a new wave has taken the global audience by storm – the "Korean Wave" or as it's popularly called, the "Hallyu." Riding this tidal wave with innovation and insight is our small-cap pick for the day, Hanryu Holdings (NASDAQ:HRYU). With its FANTOO platform, the company is aiming to redefine the contours of fan engagement and has recognized the massive potential of the active K-Culture aficionados, transforming them into valuable contributors to their "fandum economy". Its innovative strategy looks to ensure that fans aren't just passive onlookers but are deeply entrenched in shaping the content they love. All of this begs the question – is the company a worthwhile investment for our readers at SmallCapsDaily? Let us have a closer look and find out.
How Does Hanryu Holdings' One-of-a-Kind FANTOO Platform Operate?
Hanryu Holdings has created and masterfully curated the FANTOO platform, a unique online interface that serves as a nexus for global fans to immerse themselves in the multifaceted realm of South Korean culture, or "K-Culture." More than just a space for consumption, FANTOO empowers its global community to create and get recognized for their unwavering dedication to various entertainment facets. This recognition isn't just metaphorical; users are tangibly rewarded for their active participation through "Fantoo Points" or "FP," previously termed as "Kingdom Gold" or "KDG." This platform opens doors to a multitude of in-app user experiences that offer revenue potential which highlights the innovative approach FANTOO takes to generate revenue while also enhancing user experience.
Each day, an impressive 50% of the day's total net advertising profits are thoughtfully distributed to users as FP, with 30% going to content creators and an additional 20% allocated to general users. These FP rewards, representing a unique blending of fandom engagement and monetary value, are exchanged at a ratio of one FP for every 100 Korean Won, specifically linked to advertising revenue generated within the FANTOO platform.
Users can indulge in a diverse range of content forms, spanning from original creations to user-generated content, encompassing concert feeds, fan art, web novels, webtoons, and more, across genres from K-pop to Indie. The platform also hosts a shop where users can gratify their fandom by purchasing K-pop CDs, photo books, DVDs, dolls, stationery, clothing, and an array of other K-culture fandom items. Through this multifaceted approach, FANTOO by Hanryu Holdings aspires to establish itself as a global hub for fans, fostering creativity, connection, and commerce within the ever-growing fandom economy. FANTOO's ingenious economic model, intricately woven into its offerings, not only profits Hanryu Holdings but also bestows benefits upon its global fanbase, symbolizing a deep understanding of modern fan culture and constructing a harmonious ecosystem for fans and creators alike.
What Makes FANTOO Unique?
What makes FANTOO stand out from other social media apps is that this is the only app specifically created with “fans” in mind. With fans as the central focus, FANTOO acts as a catalyst for interactions within fandoms, nurturing communities where enthusiasts can gather, communicate, and share in their love and adoration for their idols.
FANTOO’s recent partnership with SALTLUX, an AI juggernaut known for its ground-breaking advancements, further enhances its uniqueness. By incorporating SALTLUX's AI-powered technology, FANTOO is poised to create an unparalleled social media experience that seamlessly fans across the globe. AI and fandom come together in FANTOO's soon-to-be-released personalized AI assistant service, Deok Gom. This service, slated for launch within the year, boasts two pivotal components: personal AI and Club AI. These elements are designed to cater to individual preferences, analyzing user personalities and lifestyles to offer tailored services. From a service guide to AI chatbot functionalities, FANTOO aims to foster an active community that defies traditional social networking.
FANTOO's uniqueness is further cemented with its use of AI voice synthesis and deep learning. This cutting-edge technology not only fuels the platform's AI assistant services but also crosses linguistic boundaries, offering its services in over 10 languages worldwide. What's more, users gain the power to choose their preferred voice character, spanning an eclectic range of idols from celebrities and sports icons to their very own voices. The marriage of technology and culture is at the heart of FANTOO's allure, a union that is poised to redefine what it means to be a fan.
Why The Focus On K-Culture?
Diving into the global cultural landscape, Hanryu Holdings finds itself at the heart of the K-Culture phenomenon, a sector that astonishingly churned out roughly $21.5 billion in 2019 as highlighted in a study co-conducted by the Korea Foundation and the Korean Ministry of Foreign Affairs (KMFA). By 2021, the global influence of K-Culture skyrocketed to the seventh rank, witnessing its fandom numbers soar from 35.6 million in 2015 to an impressive 156.6 million. China boasts of the largest K-Culture fanbase with 86.32 million aficionados, followed closely by countries like the U.S., Thailand, and Russia.
Further testament to K-Culture's dominance is the staggering $124.3 billion global purchasing power it commanded in 2020, a figure reported by the Korea Creative Content Agency (KOCCA). Given that over two-thirds of the global populace are mobile users, platforms like FANTOO, operated by Hanryu Holdings, stand at a vantage point, especially as online and mobile channels emerge as predominant avenues for K-Culture content consumption. The challenges brought about by the COVID-19 pandemic serendipitously created avenues for virtual events, a domain where FANTOO is strategically positioned. This assertion is emboldened by ground-breaking virtual events like BTS's online concert. With the global virtual events market valuation touching approximately $94.0 billion in 2020 and forecasts pointing towards a staggering $504.8 billion by 2028, Hanryu Holdings' alliances within the vibrant Korean entertainment milieu will undoubtedly amplify its market presence, thereby enhancing the intrinsic value FANTOO offers to its global user base.
Visionary Expansion of the FANTOO Ecosystem
Hanryu Holdings is intently focused on accelerating the exponential growth of FANTOO’s user base, a strategy that promises to magnify advertising proceeds, elevate user-generated income, and tap into untapped revenue streams. Among the pivotal strategies in play is the goal to captivate global users by utilizing the platform's unrivalled fandom-centric design, a move that anticipates amplifying user interaction and corresponding revenues. They are geared to widen the spectrum of their product and service catalogue, mirroring the user-base upswing and envisioning FANTOO as the paramount haven for fans across genres.
Hanryu's management is investing in R&D and plans to channel investments towards state-of-the-art technologies to deliver an unparalleled user experience, especially in contrast with conventional social media platforms. Simultaneously, their aspiration to craft intellectual properties, derived from insights within FANTOO's ecosystem, holds the potential to elevate user participation and traction further.
The management's marketing strategies have done well till date. A testament to its resounding success, as of December 31, 2022, FANTOO boasted an impressive user base exceeding 18.9 million, predominantly within the commercially potent 20-39 age bracket, who represent a staggering 80% of the platform's user community. It is only a matter of time before the company manages to transcend the confines of K-Culture and expands into an array of entertainment sectors, ensuring FANTOO remains in harmony with the dynamic shifts in global pop culture.
Final Thoughts
We see a slight correction in Hanryu Holdings' stock after its recent fundraise and the stock is currently trading below its $10 issue price which implies an excellent investment opportunity. What sets Hanryu apart is its unparalleled global footprint and an uncanny understanding of contemporary entertainment shifts. The horizons for Hanryu's growth seem expansive and it is unfair to value the company using a traditional approach of revenue multiples or profitability multiples as of date. In fact, given the robustness and innovative prowess of the FANTOO platform, coupled with the powerful network effects it has nurtured, we actually believe that there is a palpable possibility of it catching the eye of tech behemoths like Spotify or Meta Platforms for a potential acquisition. Overall, we see Hanryu Holdings as an excellent investment bet for our readers at SmallCapsDaily.