Digital Reading Service Provider Easou Files For Listing, ChatGPT Mentioned in Prospectus
Easou Technology, a digital reading business headquartered in Shenzhen, recently submitted an application for listing on the Hong Kong Stock Exchange with BOC International as the exclusive sponsor. This application follows its failure to IPO on Shanghai Stock Exchange STAR Market in 2020.
Chinese internet giant Baidu listed on Nasdaq in 2015. In the same year, Easou was established in Shenzhen. Born in the 2G era, Easou saw the possibility of the mobile internet. Unlike Baidu, which has origins as a PC search engine, early Easou focused on mobile searches.
In the initial stages of the mobile internet, Easou was on par with Baidu and Google. Analysys’ data showed that in the second quarter of 2010, the top three companies in the Chinese mobile search market were Baidu, Easou, and Google, occupying 34.33%, 16.91%, and 12.29% of the market, respectively. Later that year, Google announced its withdrawal from the Chinese market. In the following year, Baidu surpassed Tencent to become the internet company with the highest market capitalization in China.
In recent years, Easou has gradually fallen behind in the smartphone search field. In 2013, Easou launched a new app and gradually shifted its focus to the online reading business.
According to its prospectus, Easou has successfully applied its intelligent recommendation engine to a variety of fields, including digital reading recommendations, digital marketing, and online game distribution. It also uses the engine to collect, analyze, match, and predict user needs and preferences.
In 2020, 2021, and the first nine months of 2022, the company achieved revenues of 410 million yuan ($59 million), 430 million yuan ($62 million), and 330 million yuan ($47 million), respectively. Among them, digital reading recommendation services accounted for 45.2%, 50.4%, and 53.2% of the total revenues, respectively.
According to the company prospectus, as of September 30, 2022, there were 44 million registered users on Easou’s reading apps, with a monthly average of 25.5 million active users. By contrast, in the first half of 2022, there were 160 million monthly active users on IReader Technology and 265 million on China Literature.
In recent years, free reading platforms such as ByteDance’s Fanqie Novel and Baidu-backed Qimao Novel have risen, which has impacted the paid reading field in which Easou sits.
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For its future plans, Easou is eyeing ChatGPT. According to the prospectus, the company said that “ChatGPT’s arrival brings artificial intelligence closer to our daily lives.” It emphasized that ChatGPT, like other generative artificial intelligence tools, is a branch of AI-generated content (AIGC). Easou may aim to involve artificial intelligence technology to create literary works in the future.