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iQiyi's double rumored listing will not be an Oolong anymore
In other words, there was a report from foreign media on the early morning of September 26th suggesting that iQiyi might be listed next year. As someone who's always interested in the company, I reached out to some people I know at iQiyi. Their response was surprisingly calm: "Double eyes, I'm already numb and hopeless." It seems like the repeated attempts at going public have left many feeling exhausted. Eventually, it took a toll on the hearts of many employees.
I also did some digging and found out that yes, iQiyi is indeed considering an IPO, but it hasn't officially started yet. The company has only just begun discussions with major securities firms. As for the valuation, it's estimated to be around $10 billion. The listing could happen in either the U.S. or Hong Kong.
To put it simply, the plan is in place, but the actual move hasn't been made yet. It's still up in the air, and we'll have to wait and see what happens.
However, I believe that after so many years of hard work by the management team and the staff, it's time for iQiyi to rise. It's not about rushing, but about making sure the timing is right. The effort put in over the years deserves recognition.
Although iQiyi is still facing significant losses, its financial situation is gradually improving. So, I hope that iQiyi can catch the wave of stock market listings and go public soon, finally turning a profit.
In Xiao Bian’s view, iQiyi is showing positive signs in several areas:
1. Last year, iQiyi’s revenue hit RMB 11.3 billion, a 113% increase compared to the previous year. Although it still lost nearly RMB 2.8 billion, the loss rate has significantly decreased.
2. This year, according to Baidu's information, iQiyi’s finances are being optimized. In the second-quarter earnings report, Baidu revealed that iQiyi has over 30 million paid users, and this segment contributes more revenue than its competitors. Additionally, Baidu’s CFO highlighted the growth in iQiyi’s paid subscribers as a key driver of the company’s financial growth.
3. Even though iQiyi’s paid members spent between 20 to 30 million in a year, the growth rate slowed down from the rapid expansion last year (when the user base doubled in just six months). However, this doesn’t mean the potential is limited. With so many Chinese internet users, there's still a lot of room for growth. In June, Gong Yu revealed that iQiyi’s membership payment income and advertising revenue are now at a 1:1 ratio, indicating a well-balanced revenue structure. Analysts on Wall Street even expect iQiyi to break even in 2019.
4. iQiyi has also shown strong growth in attracting paying users. For example, this year’s “China Hip Hop†event was a massive success.
5. From a market perspective, after Youku joined Alibaba, iQiyi and Tencent Video now dominate the market, forming a duopoly. This position will help strengthen their bargaining power when negotiating with advertisers.
Of course, some people argue that iQiyi recently raised $1.5 billion in funding and has a large amount of prepaid fees, which means its cash flow is solid. That money could last for two years, so there's no need to rush into the market.
But Xiao Bian still believes that it's better to act early. After all, Baidu and other investors have been investing for seven years. The founding team and employees have worked hard for many years, and it’s not easy.
Therefore, I hope that iQiyi can continue to grow in this vast and densely populated market in Greater China, and eventually become like Netflix, surpassing 100 million paying users and generating real profits. I also wish for iQiyi to go public as soon as possible, see its valuation rise again, and let the employees who've invested seven years of their lives benefit from it.