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Metaverse platform launch

Caliverse launch attracting keen interest

Caliverse, a metaverse and virtual reality (VR) company acquired by Lotte Innovate in Jul. 2021, will officially launch its metaverse platform on Aug. 29. The beta version was unveiled in January and made available to around 5,000 domestic and international users for testing. Content and technology are key to the competitiveness of any metaverse platform, and we believe Caliverse stands out in both respects. On the content front, Caliverse is aligning itself with major events and brands to provide a diverse array of experiences. Notably, it announced partnerships with the global EDM festival Tomorrowland (Jul. 19-28) and the music television program Music Core MBC), which will allow users to watch digital performances. The platform will also offer a range of other services, such as shopping, gaming, movies, and virtual exhibitions. Caliverse is accelerating efforts to secure more content and expand partnerships with other companies (including an MOU with Rakuten signed this month).

Overcoming technological hurdles to offer a hyperrealistic experience

On the technology front, we believe Caliverse has successfully addressed key challenges related to: 1) high-quality VR implementation; 2) the deployment of next-generation interactive technology; and 3) resource optimization. Ultra HD graphics are crucial for an immersive experience but difficult to achieve in VR environments; we believe Caliverse has managed to overcome this challenge by optimizing contrast ratios and compressing data through advanced sampling techniques. The company also uses Unreal Engine for real-time rendering and developed a multi-access system that is serviced through VR devices. Another noteworthy feature of the platform is that it allows users to generate their own digital content (images, videos, games, etc.).

Maintain Buy and TP of W46,000

Recently, Lotte Innovate has been tapping into the overseas EV fast charging market via subsidiary EVSIS (current domestic market leader by revenue). EVSIS established a North American subsidiary this year and secured a roughly 3,300m2 site in the region. Of note, EVSIS stands out from domestic rivals due to its advanced ultra-fast charging technology and has obtained certification for a slow charging system with advanced fire safety technology. For 1H24, EVSIS announced revenue of W43.6bn (+31% YoY).

For 2024, we expect Lotte Innovate to report revenue of W1.28tr (+7.1% YoY) and operating profit of W48.2bn (-15% YoY). In 1H24, costs increased due to the expansion of EVSIS and Caliverse, and system integration (SI) projects faced delays due to the slowing economy. However, new business momentum is gaining traction, and an economic turnaround in 2H24 is expected to boost SI orders.