iQiyi may raise .5b from U.S. float

Updated 2018-03-01 11:08:02 China Daily

An employee highlights the salient features of the iQiyi online video streaming platform during a recent high-tech exhibition in Beijing. (Photo/China Daily)

Video streaming company to use IPO proceeds for market expansion

Chinese online video streaming service provider, a unit of online search giant Baidu Inc, on Tuesday filed for an initial public offering in the United States to raise up to .5 billion.

The Beijing-based company, which is reportedly valued at billion, has applied to list on the Nasdaq exchange under the symbol "IQ", it said in a filing with US Securities and Exchange Commission.

Baidu currently holds nearly 70 percent of the shares in iQiyi and will continue to remain its controlling shareholder, iQiyi said in the IPO filing.

According to the company, it plans to use half the net proceeds from this offering to expand and reinforce its content offerings. Other funds will be spent to back the technology development and the operation.

"The video streaming sector has become hotly contested in China, and key participants need to invest lots of money to fuel the future development and then can take larger shares of the market," Ma Shicong, an analyst at Beijing-based internet consultancy Analysys, said in an earlier interview with China Daily.

Founded in 2010, the company has reported losses for years, and in 2017 it posted a net loss of 3.74 billion yuan (1 million), compared with 3.07 billion yuan in 2016.

However, iQiyi reported continuous growth in its revenues, which hit 17.4 billion yuan last year, a significant jump of 54.6 percent over the previous year.

A key driver behind iQiyi's revenue growth is the subscription fees for the online video streaming services. Revenue from the subscription fees accounted for 37.6 percent of the total in 2017, compared to an 18.7 percent share in 2015.

The Netflix-like company had more than 50 million subscribers by the end of last year, and it had around 126 million daily active mobile users during the last quarter of 2017, the company said.

Ma said that with the rapidly rising video streaming market, three major Chinese internet giants - Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd, collectively known as BAT - are ramping up their efforts to invest in the entertainment units, betting big on the booming domestic market.

According to statistics from market researcher QuestMobile, iQiyi took the top spot in the domestic online video industry, attaining 463 million monthly active users in December last year. And its arch rivals Tencent Video and Alibaba-backed Youku Tudou Inc ranked in the second and third place on the list, respectively, reporting 458 million and 374 million monthly active users respectively.

"Major tech giants all aim to boost the future development of the video streaming arms to be at the forefront in the Chinese entertainment market. The competition in the sector will become fiercer," Ma added.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58March 27 2019 10:16:33

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16March 27 2019 10:16:33

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18March 27 2019 10:16:33

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords