Company: iQIYI, Inc.
Symbol: IQ
Description: They are an innovative market-leading online entertainment service in China. Trade Date: 3/29
Shares: 125 million
Price Range: $17.00-$19.00
Underwriter(s): Goldman Sachs (Asia), Credit Suisse, BofA Merrill Lynch, China Renaissance, Citigroup, UBS Investment Bank
Terms Added: 3-16-18
Business: They are one of the largest internet companies in China in terms of user base. They have successfully built iQIYI into a widely-recognized brand among users, content partners and advertisers, and have redefined online entertainment in China. They are the largest internet video streaming service in China in terms of user time spent and average total MAUs in 2017, according to iResearch. They reshaped the internet video streaming industry in China by successfully cultivating users’ willingness to pay for content. Their subscribing members reached 60.1 million as of February 28, 2018, over 98% of whom were paying subscribing members. Through their license partner, they also operate the largest smart TV video streaming service in China as measured by monthly active devices in December 2017, according to the iResearch Report. For the three months ended December 31, 2017, they had approximately 421.3 million average mobile MAUs and approximately 126.0 million average mobile DAUs, while their average PC MAUs and average PC DAUs reached 424.1 million and 53.7 million, respectively. In December 2017, their users watched a total of 9.2 billion hours of videos on their platform, and spent an average of 1.7 hours per day per user watching video content on their mobile apps. They have also built a leading entertainment-based social media platform, iQIYI Paopao, for fans to follow and interact with celebrities and the entertainment community. iQIYI Paopao had approximately 45.8 million average mobile DAUs for the three months ended December 31, 2017.
FINANCIALS: They have grown rapidly with total revenues increasing by 111.3% from RMB5,318.6 million 2015 to RMB11,237.4 million in 2016, and further by 54.6% from RMB11,237.4 million in 2016 to RMB17,378.4 million (US$2,671.0 million) in 2017. They had net losses of RMB2,575.1 million, RMB3,074.0 million, and RMB3,736.9 million (US$574.4 million) in 2015, 2016, and 2017, respectively.
Insider Buying: Hillhouse Capital, a long-term asset manager affiliated with our shareholder HH RSV-V Holdings Limited, has indicated an interest in purchasing an aggregate of up to US$200 million worth of the ADSs being offered in this offering at the initial public offering price.
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