It’s only a starting point for the IPO of B station to continue to break the IPO for one week.
Source: Securities Daily
â– This reporter trainee reporter Chen Wei
Thanks to the outbreak of domestic online video users, Nasdaq welcomed two Chinese streaming media companies for two consecutive days at the end of March. However, affected by the downturn of Chinese stocks in the US stock market, B Station and iQiyi broke on the first day of listing.
Nearly a week has passed. As of April 3, Beijing time, the stock prices of the two companies have remained sluggish and have not yet been adjusted back to the issue price.
But obviously this has not affected the confidence of the two companies in their future earnings. Chen Rui, chairman and CEO of Station B, said that he should not care about the recent stock price fluctuations. Gong Yu, founder and CEO of iQiyi, said: "The trend of stock prices is a purely technical issue. For iQiyi, we want to do long-term to reflect our value."
Some commentators believe that the unoptimistic opening performance reflects the fact that the company's financial situation is not satisfactory. However, more industry insiders said that even if the profitability of the current media is questioned, there is still much room for exploration in the future of Chinese streaming media. Next, Iqiyi and B stations how to turn the traffic business into a community sticky, how to find new profit points, still worth looking forward to.
As Jiang Bin, general manager of the iQiyi Program Development Center, said: “IPO is a milestone for us and a new starting point.â€
Breaking one after another
On the evening of March 38th, Beijing time, the B station was officially listed on the NASDAQ. The issue price was US$11.5/ADS. After the opening transaction, the price fell below the issue price, and the day's decline was 2.26%. The next day, iQiyi landed on Nasdaq, the issue price was set at 18 US dollars / ADS, the opening immediately broke, and finally closed with a decline of 13.61%.
As of April 3, Beijing time, the reporter's stock deadline, B station price is 11 US dollars / ADS, the market value is about 3.06 billion US dollars (equivalent to 19.228 billion yuan); and iQiyi is 15.7 US dollars / ADS, the market value is about 11.1 billion US dollars (equivalent to RMB 69.749 billion).
In this regard, some industry analysts believe that the two broke in succession, on the one hand, due to the recent weakness of the US stock market technology stocks, on the other hand, we must also consider the iQiyi, B station's performance in recent years is not eye-catching, and The issue of relatively high issue price.
The iQiyi prospectus shows that its operating income in the past three years was 5.318 billion yuan, 11.237 billion yuan and 17.378 billion yuan respectively, and the net losses were 2.575 billion yuan, 3.074 billion yuan, and 3.736 billion yuan, respectively. Narrowed, but still far from profit.
Similarly, the B-station prospectus shows that its operating income from 2015 to 2017 was 131 million yuan, 523 million yuan, 2.468 billion yuan, and net losses were 373 million yuan, 911 million yuan, and 184 million yuan respectively.
However, it is worth noting that the successive breaks of the two have not affected their own confidence in future earnings. And this confidence actually comes from the prospect of the online video industry.
According to the latest report of iResearch, the number of online video users in China has exceeded 500 million, and it is expected to reach 766 million in 2022. The proportion of Internet video users has increased from 1.2% in 2012 to 13.2% in 2016, and is expected to rise further to 40% in 2022.
Taking Aiqiyi as an example, the prospectus shows that as of February 28, 2018, its subscription membership has exceeded 60.1 million. In 2017, member service revenue increased by 73.7% year-on-year, accounting for 37.6% of its total revenue.
Therefore, there is a voice in the industry that “paying awareness has begun to fully awaken. With the continuous growth of paying users, there will be a company that turns a profit in the futureâ€, and “With the establishment of content ecology, B station and Iqiyi conquer Wall Street is still big. has hope".
Exploring incremental space
In fact, in terms of business model, Iqiyi is very different from B station.
According to the disclosure of the B-station prospectus, in the fourth quarter of last year, the average monthly active users of station B reached 71.76 million, an increase of 45.3% year-on-year; last year, the average daily usage of station B users was 76.3 minutes, and the retention rate of users after 12 months reached 79%.
High time and high retention as two core indicators are seen as reflecting the stickiness of the B station community. Chen Rui once said that the B station only provides infrastructure, which is equivalent to the property, and will not let the owners do anything. It is when the owner has the demand and then meets it.
Compared with the vertical community mode of station B, iQiyi as a popular video website, more needs to take the initiative. Gong Yu repeatedly reiterated the view that “in order for users to pay for virtual products, they must have an emotional connection with themâ€.
Under a completely different development model, the profit models of the two also differ.
In terms of income structure, in 2017, iQiyi's online advertising revenue exceeded 8 billion yuan, a year-on-year increase of 44.4%, accounting for 46.9% of total revenue. And its game business and e-commerce, dating, movie tickets, literature, Qixiu and other entertainment and life services, together accounted for 8% of total revenue.
In contrast, in B station, in 2017, its game business revenue rose to 2.085 billion yuan, accounting for 83.4% of total revenue, while live and advertising revenues accounted for 7.1% and 6.5% respectively.
Some insiders believe that as an important part of the pan-entertainment industry chain, the game has the role of undertaking and extending IP, thus realizing multiple rounds of realization. But at the same time, the game also has very unstable attributes, and the single-handed game has a certain life cycle.
From this point of view, the B station not only needs to have a game that can pick up the bar, but also needs to explore new growth points besides the game business. Iqiyi is still not perfect in the infrastructure construction of the game sector.
More clearly, the two companies are also interested in exploring new profit points in the future.
Chen Rui said in an interview that the positioning of the B station is not a typical game company. In the future, the two major businesses of live broadcasting and advertising may surpass the game in the sum of revenue.
Gong Yu also said in an interview with the media on the night of the listing of iQiyi. At present, the main driving force of iQiyi is brand advertising, paying users, etc., but in the future it will continue to look for more drivers, perhaps new business, such as startups. Reading, live, games, etc.
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