FAST NEWS: iQiyi Turns Profitable on Rising Memberships
The latest: Chinese video platform Beijing iQiyi Science & Technology Co. Ltd. (IQ.US) announced Wednesday that its revenue rose 3% year-on-year to 7.59 billion yuan ($1.1 billion) in last year’s fourth quarter. It recorded a 304 million yuan net profit for the period, reversing a 1.78 billion yuan net loss a year earlier.
Looking up: CEO Gong Yu revealed that the company added over 10 million net subscribers in the fourth quarter, driven by the company’s self-produced original blockbusters.
Take Note: The company’s revenue for all of last year still declined by 5% to 29 billion yuan, mainly due to 25% and 14% decreases in online advertising services and content distribution revenue, respectively, which offset 6% growth in membership services revenue.
Digging Deeper: Founded in 2010 as a video website owned by Chinese internet giant Baidu (BIDU.US; 9888.HK), iQiyi has been dubbed by some as “China’s Netflix.” But it operates in a highly competitive market, with major rivals including Youku, owned by Alibaba (9988.HK; BABA.US), and Tencent Video, as well as Tencent (0700.HK) – affiliated Mango TV. Baidu has reportedly previously sought to sell its 53% stake in the company to focus more on its artificial intelligence (AI) business, though iQiyi has denied the rumors.
Market Reaction: iQiyi shares rose 1.1% to $7.32 on Wednesday. The stock now trades at the upper end of its 52-week range.
Translation by Jony Ho
To subscribe to Bamboo Works free weekly newsletter, click here
