On March 29, iQIYI became officially listed on NASDAQ with the ticker symbol IQ. At $18 per share, it has raised a total of $2.25 billion.
Goldman Sachs, Credit Suisse, PFS under Merrill Lynch, China Renaissance, Citibank Global Market and UBS Securities are the underwriters to the IPO.
According to iQIYI’s prospectus, the number of its monthly active mobile app users reached 421.3 million, with 126 million average daily active users. The number of PC active users are approximately 424.1 million per month and 53.7 million per day.
Its revenue generated from membership services in 2017 rose by 73.7 percent compared with the year before. With an increasing proportion of the total revenue, subscription fees are the main money maker for iQIYI. Online advertisement remains one of its important revenue sources, generating 46.9 percent of the total revenue.
After iQIYI’s listing, Baidu remains as its dominant shareholder. According to Baidu’s founder Robin Li, iQIYI is still a market leader in video websites. It ranks first in terms of daily active users, average viewing time, paid subscribers and profitability.
The profit margin of the video business is lower than that of the internet search business. However, in the long run, Li believes that the gap would gradually disappear. The huge requirement for video advertisements enhances iQIYI’s massive capacity for content distribution, namely matching videos to appropriate viewers.
Gong Yu, CEO of iQIYI, told reporters that the two main drivers for iQIYI are brand advertisements and subscription fees. However, streaming ads, short video streams and Paopao (an iQIYI social community product) will soon become new drivers for growth.