|Bid||0.00 x 3200|
|Ask||0.00 x 1800|
|Day's Range||18.20 - 18.55|
|52 Week Range||14.35 - 38.30|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||17.36|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||23.66|
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For years, companies like Oracle and International Business Machines invested heavily to build new markets in China for their industry-leading databases. Now, boosted in part by escalating U.S. tensions, one Chinese upstart is stepping in, winning over tech giants, startups and financial institutions to its enterprise software.Beijing-based PingCAP already counts more than 300 Chinese customers. Many, including food delivery giant Meituan, its bike-sharing service Mobike, video streaming site iQIYI Inc. and smartphone maker Xiaomi Corp. are migrating away from Oracle and IBM’s services toward PingCAP’s, encapsulating a nation’s resurgent desire to Buy China.PingCAP’s ascendancy comes as the U.S. cuts Huawei Technologies Co. off from key technology, sending chills through the country’s largest entities while raising questions about the security of foreign-made products. That’s a key concern as Chinese companies modernize systems in every industry from finance and manufacturing to healthcare by connecting them to the internet.“A lot of firms that used to resort to Oracle or IBM thought replacing them was a distant milestone, they never thought it would happen tomorrow,” said Huang Dongxu, PingCAP’s co-founder and chief technology officer. “But now they are looking at plan B very seriously.” IBM, which gets over a fifth of its revenue from Asia, declined to comment. Oracle, which gets about 16%, didn’t respond to requests for comment.China has long tried to replace foreign with homegrown technology, particularly in sensitive hardware -- it imports more semiconductors than oil. That imperative has birthed global names like Huawei and Oppo and even carried over into software in recent years, as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. expand into cloud services. That effort has gained urgency since Washington and Beijing began to square off over technology.“China has always wanted to use domestic tech and in areas like cloud, it’s been very successful,” said Julia Pan, a Shanghai-based analyst with UOB Kay Hian. “While it wants to use Chinese chips, its technology is just not there, but when it’s mature enough, they very likely will replace overseas chips with domestic ones.”Now, a coterie of up-and-coming startups are encouraging Chinese firms to go local. Customers use PingCAP to manage databases and improve efficiency, allowing them to store and locate data on everything from online banking transactions to the location of food delivery personnel.Backed by Matrix Partners China and Morningside Venture Capital, PingCAP is competing in a sector traditionally dominated by companies such as Oracle and IBM. The market is expected to grow an average 8% annually to $63 billion globally in the seven years through 2022.The startup is one of the newest members of a cohort of open-source database providers such as PostgreSQL and SQLite that are upending the market. Researcher Gartner forecasts that 70% of new, in-house applications worldwide will be developed on open-source database management systems by 2022.PingCAP -- mashing the term for verifying a web connection, ping, and the CAP computing theorem -- was founded by three programmers whose former employer, a mobile-apps company, was acquired by Alibaba. Inspired by Google’s Cloud Spanner, which pioneered the distributed database model, the trio -- Huang, Liu Qi and Cui Qiu -- began creating an open-source database management system that would allow companies to infinitely expand their data storage by simply linking more servers to existing ones.“Think of traditional database mangers like a fixed glass container, every time you run out of storage you have to get a bigger one,” said Huang. “What our system does is that you can link as many cups together as you want.”Their idea caught on with investors and venture fund hot shots including Matrix agreed to invest about 10 million yuan ($1.4 million) in 2015. To date the company has raised more than $71 million and has about 190 employees.PingCAP is working in a space where competition is fierce -- its database TiDB currently only ranks 121 among global peers, according to database rank compiler DB-Engines, which uses mostly mentions on social media and discussion forums as key metrics. Other open-source database managers such as PostgreSQL ranks 4th and its direct competitor CockroachDB, which also focuses on distributed database systems, leads PingCAP by 30 spots. The Chinese startup also operates in a market where it’s difficult to make money -- PingCAP only has a couple dozen paying customers in China and makes about 10 million yuan in revenue a year. Their best shot is to create successes that can be later replicated on a larger scale, said Owen Chen, an analyst with Gartner. “Work with the 10% early adopters free of charge, and make money off the 90% followers later,” he said.That’s why Huang is working with big names like the Bank of Beijing and Mobike -- so it can create templates for each sector. “Only one thing is certain, data will continue exploding,” said Richard Liu, a founding partner at Morningside Venture Capital. “We have the patience to wait before they figure out the best revenue model.”PingCAP has one thing going for it: Chinese customers are increasingly willing to experiment with technology. Data supplied by some 2,000 companies -- more than 300 in-production users and 1,500 who are testing its system -- will provide PingCAP with what Matrix Partner Kevin Xiong says is akin to a supply of ammunition.“You need bullets to train someone to become a stellar marksman, and PingCAP right now has a lot of bullets,” said Xiong, who invested in the company.Huang points to how PingCAP’s database helped tide over Chinese bike-sharing giant Mobike during stressful days when user and transaction numbers exploded on a daily basis -- at its peak in 2017 the company said it handled as many as 30 million rides a day.“It was a really challenging time for us, and [open-source database] MySQL was no longer able to meet our demands given the jump in data volume,” said Li Kai, a senior tech director at Mobike. “PingCAP really helped us big time.”Huang and his team also made it easy for IT departments to jump ship. With one key stroke, companies could export their entire database on MySQL over to PingCAP’s. Some are considering moving their most sensitive data including transactions and customer info over, Huang said without disclosing names.Yu Zhenhua, an IT manager at Bank of Beijing, said China is constantly trying to enhance information security while his industry wants to lower costs as it rapidly expands. “TiDB’s service meets the demands of what we want in a distributed database manager,” Yu said in a statement posted on PingCAP’s website. A representative for the lender didn’t respond to emailed queries about its collaboration.Longer term, PingCAP wants to venture beyond China -- but there, the geopolitical spat is proving an impediment. Earlier this year, PingCAP was ready to embark on an expansion into the U.S. and said it was already in discussions for getting some prominent tech startups to use its software. Now the prospects of winning over American clients are clouded.“We’re not seeing any immediate impact on our business in the U.S. but the trade war does force us to look at the long term uncertainties of getting important U.S. clients in finance or tech to move to our platform,” Huang said.(Updates with iQiyi as a client in the second paragraph.)\--With assistance from Olivia Carville, Nico Grant, Lucas Shaw and Gao Yuan.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Colum Murphy, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
BEIJING (Reuters) - iQiyi, China's answer to Netflix, intends to push harder into overseas markets such as North America and Japan after the video-streaming service hit a milestone of 100 million paying subscribers this month, a senior executive said on Monday. The company, which has been locked in a cash-burning fight with Tencent's video site and Alibaba-backed Youku Tudou in China, wants to distribute more of its self-produced content in North America, Singapore, South Korea and Japan, where they were seeing growing interest in Chinese-language shows, iQiyi's President of Membership and Overseas Business, Yang Xianghua, told Reuters in an interview.
BEIJING, June 24, 2019 (GLOBE NEWSWIRE) -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, today announced that the number of its total subscribing members surpassed 100 million. “This represents a significant milestone for iQIYI and reinforces our position as China’s leading online video streaming platform,” commented Dr. Yu Gong, Founder, Director and Chief Executive Officer of iQIYI. “We pioneered the subscription business model in China and have generated tremendous growth in subscriber numbers over the past years.
IQIYI, Inc. Sponsored ADR (IQ) closed the most recent trading day at $18.16, moving -1.73% from the previous trading session.
Latin America's leading online marketplace and China's top dog in streaming video both grew revenue at roughly 45% in their latest quarters, but that's about the only thing that these two passing ships have in common these days.
BEIJING, June 19, 2019 /PRNewswire/ -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, recently announced that the original Chinese youth rap music reality show The Rap of China 2019 (the "Show") started airing on June 14, 2019, with a new episode out weekly. The Rap of China will return to the heart of rap music in 2019 by continuing to discover and realize rap's characteristics of trendiness, enthusiasm, and coolness, as well as innovating new changes, such as in competition structure and dance elements, to elevate the show.
BEIJING, June 18, 2019 /PRNewswire/ -- The restored version of heritage Chinese comedy film The Adventures of Sanmao the Waif (1949) (the "Film") has been selected to be screened at Shanghai International Film Festival (the "Festival") as part of a series of restored films for the festival's "Memories and Classics - Special Film Exhibition of the Establishment of the People's Republic of China" segment. The film was a 4k restoration that was jointly restored by iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, and Jiangsu Huaxia Film Restoration Technology Co. LTD ("Huaxia"). With the screening at the festival taking place on June 18, 2019, the Film is also due for national release at cinemas across the country on October 1, 2019, China's National Day.
Many companies wait until growth in their core industries slows down or runs out before they diversify their revenue sources by venturing into new markets.
iQiyi (IQ) plans to use AI to improve its movie and video streaming sales and cut operating costs, said CEO Yu Gong during an interview with CNBC last month.
Investors should exercise caution investing in companies that are both losing money and are listed in China. Such is the case with iQIYI(NASDAQ: IQ). Escalating trade wars between the U.S. and China scared investors away from China-based companies and that move has been costing iQIYI stock.Source: Shutterstock Even after JD.com (NASDAQ: JD) and Alibaba Group (NYSE: BABA) reported solid quarterly sales growth, the stock failed to return to yearly highs. So, with iQIYI reporting first-quarter revenue growth of 43% but a loss of around $270 million, what is there to like about this company?iQIYI's subscriber base grew an impressive 58% to 96.8 million, up from 61.3 million last year. Revenue grew 43% but net losses doubled to around $270 million. The company effectively strengthened its platform with user growth and attracted new users, increasing overall user stickiness in the quarter.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Both DAU on the mobile app and time spent grew in the double digits, demonstrating effective marketing campaigns and premium content resonating with users. The Legend of Haolan, The Golden Eyes and The Legend are examples of premium, high-quality original drama driving subscriber growth.iQIYI's secondquarter revenue guidance of 6.91 billion - 7.29 billion yuan (USD $998 million - $1.05 billion), up 12-18% Y/Y is disappointing investors with a short-term time horizon. Revenue growth lags with the subscriber additions. If the time spent per user increases, expect iQIYI reporting higher revenue later this year.Still, the company reported ad revenue remaining largely flat compared to last year. It is maintaining a cautious outlook, factoring the macroeconomic weakness in China that is driven by the ongoing trade disputes. Opportunity in iQIYI StockiQIYI's self-produced content, premium content, and ad solution should keep a positive business momentum despite the macro headwinds ahead. Viewership should grow, driven by advertising initiatives to attract new subscribers. IQIYI is building multiple business engines to diversify.Its gaming business performed well in the first quarter while its content unit will incorporate more Chinese cultural values. The richer its content library gets, the wider an audience iQIYI will attract.IQIYI is exploring the prospects of 5G with China Unicom. It launched an 8K VR visual experience center in March. Its "Qisubo" service integrates CDN technology with 5G Mobile Edge Computing and ensures high frame rates for videos having lots of interactivity. As Qisubo matures, its service may be used in hotels, high-speed trains, airports, universities, and anywhere high-quality video content is displayed. Headwinds for iQIYI StockWith all the strong growth prospects ahead, investors cannot ignore the growing expenses and quarterly loss. SG&A expenses rose 62% in the first quarter, primarily due to higher marketing spend and increased share-based compensation. R&D costs, which rose 54%, is expected for a technology firm that must invest to stay ahead.Falling content costs could offset the other expense increases. Policy changes and regulatory censorship may have contributed to its 20% sequential drop in content costs in Q1. Looking ahead, the company expects steady content costs for the second and third quarter.Subscriber growth outpaced competitors but could slow if its peers counter iQIYI's successful initiatives. Still, strong original content and variety shows like Idol Producer resonate well with viewers.Revenue from advertising could continue lagging as the trade war remains unresolved. On the flip side, a resolution between the U.S. and China would lead to a strong rally in IQ stock. Investors will anticipate a rebound in ad revenue as trade levels rebound and the economy in China strengthens. Valuation and Your Takeaway on iQIYI StockIQ stock is getting close to its IPO price of 2018. Analysts are cautious of the stock's upside, predicting a gain of just 9%. In a five-year DCF revenue exit model, iQIYI needs revenue growing 25% annually to justify a fair value of $20.50. But after the stock fell almost 30% in the last quarter, the selling momentum needs to subside before the stock has any chance of drawing buyers again.Ideally, the U.S. and China resolve their trade dispute differences. If they do not, the stock will underperform. And since fundamentals are strong for the long-term, investors willing to hold the stock for more than a year should consider iQIYI at these levels.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post Subscription Numbers Make iQiyi Stock Look Like a Great Buy Here appeared first on InvestorPlace.
BEIJING, June 17, 2019 /PRNewswire/ -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, announced that it has reached a strategic partnership in content distribution with Malaysia's biggest pay-television service provider, Astro Malaysia Holdings Bhd ("Astro"). Based on the foundations of current cooperation on content distributions, iQIYI will expand its footprint to Malaysia by launching an iQIYI content channel with Astro under a new partnership, aiming to integrate and bring more exciting and high-quality contents to Malaysia through Astro's platform.
I must say that I haven't been too kind with iQiyi (NASDAQ:IQ), which most folks know as China's Netflix (NASDAQ:NFLX). You would think that a company that is levered toward the world's biggest market in anything would do well. A cursory look at the charts for IQ stock tells a different tale.Source: Shutterstock And while I'm not trying to pat myself on the back, I will say that recommending against buying iQiyi stock was a gamble. How many times have we seen embattled securities bounce back for absolutely ridiculous reasons? Despite my reservations about the company, IQ still has that China market in its pocket. That's not something to take lightly.That said, I also want to know what other people are thinking, especially those that have a different perspective. You don't really understand your own argument until you understand your opponent's thesis. Although I hardly consider our own Dana Blankenhorn an opponent, he did put forward a differing narrative on IQ stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsEssentially, people have the completely wrong perspective regarding iQiyi stock. As I so cavalierly mentioned up top, IQ is the Netflix of China. But Blankenhorn takes issue with that comparison because it's only accurate from a superficial angle. In reality, they're two different animals. * 7 Stocks to Buy for the Coming Recession Increasingly in American and presumably other western households, people sit down in front of the TV to stream their favorite programs. This behavior facilitates the binge-watching phenomenon that we've grown so accustomed to.But in China, things are different. They don't have time to sit on their easy chair like us lazy Americans. Instead, their consumption is mobile-centric, which specifically benefits iQiyi's platform, and IQ stock.It's also a damn good argument. Unique Chinese Consumerism Also Hurts IQ StockWorking in the financial media space, I more or less have seen it all. Again, I'm not trying to toot my own horn, but I'm rarely intellectually stimulated with investment-related editorials.Blankenhorn's point, though, hit me right in the solar plexus. It made me rethink my own thoughts about iQiyi stock. I also looked at the charts again. While I was right to be bearish on shares, right now, the discount is mighty attractive.So, have I changed my mind? I'm sorry to disappoint any ardent bulls of IQ stock, but I'm still cautious on the company longer-term.Fundamental to Blankenhorn's thesis is that iQiyi is uniquely positioned to serve the unique needs of Chinese consumers. The company's target demographic is the young, upwardly mobile Chinese professional who grew up in an era of unprecedented prosperity. To quote Blankenhorn, they're "working hard and must play hard as well."But this unique Chinese consumerism is a double-edged sword. China's consumers have expectations to stream high-quality content. That arguably benefits IQ stock. But they also expect to do so for free. Obviously, that doesn't help matters.You know what? I'm not surprised one bit. Why should anyone be? For decades, China represented ground zero for content piracy. The number of copyright violations that have occurred is simply staggering.In recent times, the Chinese government has cracked down on these content pirates and they've done a great job. However, because they did a great job, it patently shows you how deeply entrenched piracy is in China. This is a consumer culture that now expects certain things like media entertainment to be free of charge. * 7 Dark Horse Stocks Winning the Race in 2019 It's going to take a while to overturn this mindset, which is why I'm still avoiding iQiyi stock. Short-term Swing for iQiyi Stock PossibleNow, it's not all bad news for IQ stock. What I'm proposing is a longer-term narrative. In the interim, it's very possible that shares at least get a dead-cat bounce.Clearly, the magnitude of volatility has subsided. The risk is currently more to those gambling that shares decline even further. It appears that strong support exists at the $18 level, where shares are roughly trading today.If you have a short-term timeframe and don't mind the choppiness, go for it. The front-face narrative for iQiyi stock that everyone focuses on -- the Chinese Netflix -- remains popular, albeit inaccurate to Blankenhorn's point.But if you're thinking about holding this for the long-term, I'd back off and take a breather. There's a reason why the streaming units of Alibaba (NYSE:BABA), Tencent (OTCMKTS:TCEHY), and Baidu (NASDAQ:BIDU) haven't justified the hype. China has the numbers, but the numbers don't want to pay.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post China's Mass of Mobile-Centric Consumers Both Help and Hurt IQ Stock appeared first on InvestorPlace.
Despite the fact that Chinese consumers are watching more videos on iQiyi (NASDAQ:IQ), IQ stock continues to decline. Like most other Chinese stocks, IQ has attracted less interest as the trade war between the U.S. and China continues and iQiyi's losses widen. Since mid March, IQ stock is down 31% compared to a 12.3% decline in the Global X MSCI China Comm Services ETF (NYSEArca:CHIC).Source: Shutterstock Some investors are concerned that IQ stock has fallen so far that it could find itself retesting its 52-week, $14.35 low, about 21% below current levels. In spite of its widening financial losses, iQiyi generated impressive subscriber growth last quarter. Although IQ stock may continue to fall, further declines or event-related catalysts could make trading iQiyi stock profitable. IQ Stock Falls Despite Improving Subscriber Base, OutlookTo be sure, iQiyi has built its base by operating as a Chinese-language hybrid of Netflix (NASDAQ:NFLX) and Alphabet's (NASDAQ:GOOGL) YouTube. IQ takes the Netflix approach to content development while mimicking YouTube's strategy of allowing paying subscribers to avoid ads.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIQ has also attracted Netflix-like competition. Following Amazon's (NASDAQ:AMZN) example with Prime Video, Alibaba (NYSE:BABA) bought video service Youku Tudou while Tencent (OTCMKTS:TCEHY) launched Tencent Video. To investor disappointment, IQ stock has failed to emulate Netflix's high valuation, and IQ hasn't duplicated NFLX's net profits.On a positive note, Hollywood prospered during the Great Depression, largely because underemployed workers had more time for movies and a need for escape. * 7 Dark Horse Stocks Winning the Race in 2019 As a result, it stands to reason that the economic slowdown in China caused by the U.S.-China trade war could increase IQ's viewership. That may help explain the 30% year-over-year increase in its revenues last quarter.Nonetheless, traders continue to sell IQ stock. In the past, I pointed out that IQ stock has rightly fallen, but for the wrong reasons. Since February, that trend has reappeared. Repeating the previous pattern, trade wars, not financial losses, probably explain IQ's recent decline. iQiyi Stock Could Stop Falling SoonWhile I do not think IQ will ever attract Netflix-like valuations, I believe the decline of iQiyi stock might end soon. IQ now trades at only 2.79 times sales, well below Netflix's price-sales ratio of 9.1.Moreover, investors should not ignore IQ's subscriber growth. iQiyi reported that its subscriber base grew by about 10% quarter-over-quarter, enabling its subscriber base to overtake that of Tencent Video. Similar to Netflix a few years ago, IQ prioritizes subscriber growth over profits. Last quarter, its losses expanded. Still, despite wider losses, analysts, on average, believe IQ will become profitable in 2021.Further, while IQ stock will probably continue to fall for awhile, I see indications that it could stop dropping soon. With its 30%-plus tumble since March, one has to wonder whether IQ will retest its 52-week low of $14.35 per share. A double bottom near that level could send IQ stock higher. * 7 Stocks to Buy for the Coming Recession Also, even though I do not agree with this thinking, IQ and other Chinese stocks fluctuate based on the trade war. While more trade with the U.S. would probably reduce the amount of time Chinese citizens have for iQiyi, I have to admit that a U.S.-China trade agreement would likely send IQ stock higher. Bottom Line on IQ StockiQiyi stock may soon become a buy. It has been steadily declining since it peaked in early March. While the decline may continue, IQ is falling toward the 52-week low it achieved at the end of last year. Moreover, the trade war that has weighed on iQiyi stock and other Chinese equities should not negatively affect the company. In fact, given the history of entertainment companies in harder times, a trade war should increase iQiyi's revenues.IQ stock needs either a positive catalyst or evidence of a chart-related floor such as a double bottom near the $15 per share range. Once the stock or outside events produce such a catalyst, I think IQ can return to its March highs and perhaps beyond.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Monster Growth * Ranking the Top 10 Stock Buybacks of Last Year * 5 Stocks Under $10 With Big Upside Potential Compare Brokers The post After a Steep Decline, China's iQiyi Stock May Become a Trade Again appeared first on InvestorPlace.
IQiyi (NASDAQ:IQ) is not "the Chinese Netflix (NASDAQ:NFLX)." IQ stock is not Netflix at all. But that's not necessarily a bad thing. Netflix, as presently constituted, might not be a good fit for China.Source: Shutterstock That's because Chinese people are highly mobile when it comes to the internet. Their screen of choice is a phone. Not a tablet, not a PC, and certainly not a TV, a phone. With a tiny screen, and wireless connections.IQ is premised on serving that market. IQiyi's service is ad supported. It's an impatient market so IQiyi content is short, punchy, more like YouTube. It's also highly interactive.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's just not Netflix. What IQiyi IsIQiyi delivered its latest quarterly report May 16, a net loss of $270 million, 35 cents per share, on revenue of $1 billion. * 7 Dark Horse Stocks Winning the Race in 2019 That's not terrible because growth was 45% from a year earlier, and subscription revenue (which it calls membership fees) was up about 65%, and now represents half the total. Revenue from advertising was basically flat.The market's reaction was to sell IQ stock, and it's now down 9% from where it was when the earnings came out. Speculators mistook the company's moves toward interactivity, games and original content for confusion.But IQiyi management is not confused. During the quarter they overtook Tencent Holdings (OTCMKTS:TCEHY) for the lead in the Chinese streaming market, pushing a unit of Alibaba Group Holding (NASDAQ:BABA) to third. It's a very tight race, and the fact that a $13 billion company is beating two giants worth over $400 billion each shows they know what they're doing.Put most simply, IQiyi is an entertainment company catering to young Chinese who grew up in a time of rising prosperity but are working hard and must play hard as well. Nearly every Chinese city has the rush of Manhattan Island. People are in a hurry. They're in a state of constant interruption and stimulation. This is not "Netflix and chill." What IQiyi DoesChief content officer Wang Xiaohui describes IQiyi as a "one stop entertainment platform," and entertainment can mean long-form movies that are relevant to the Chinese experience, immersive video games, even e-books like those found on the Amazon's (NASDAQ:AMZN) Kindle. The idea is that a book or game with traction can become a video, and vice versa, with IQiyi squeezing every ad dollar and view it can get out of this original content.IQiyi had 98 million subscribers at the end of the last quarter. Compare that to Netflix' 150 million, then note we're talking about a single market. IQiyi memberships don't cost much, the 98 million bringing in about $500 million, but the idea is to build a host of other online subscription revenue, advertising revenue, and licensing opportunities as well. (Netflix relies entirely on subscription revenue.) The Bottom Line for IQ stockIf you're buying IQ stock today you're betting that its managers know that their big new "original content" budget can create not just shows for tiny screens, but enduring franchises that can be monetized in several ways.IQiyi wants to break out its best content into movies for a market worth $9 billion, into streaming subscriptions for a Chinese market as big as its pay TV market, into games and even virtual reality experiences. Titles like Beijing Love Story, Wolf Warrior and Detective Chinatown don't have to travel to be profitable. They just need to be constantly renewed, like the Star Wars franchise. * 7 Stocks to Buy for the Coming Recession That's the strategy, anyway. If you like it, buy IQ stock. Just don't call it Netflix.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for the Coming Recession * 10 Smart Dividend Stocks for the Rest of the Year * 5 Tech Stocks That Are Far Too Risky Right Now Compare Brokers The post IQiyi Stock is the Not Netflix of China -- And That's Okay appeared first on InvestorPlace.
BEIJING, June 12, 2019 /PRNewswire/ -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment company in China, announced that it has been featured by Forbes China in the "2019 Forbes China Most Innovative Companies" List (the "List"). The announcement was made at the 2019 Forbes China Innovation Summit held on June 10th in Chengdu with the theme of "Global New Innovation Technology".
Chinese streaming giant iQiyi (NASDAQ:IQ) - often dubbed the Netflix (NASDAQ:NFLX) of China - started off life on Wall Street with a bang. The company went public at $18 a share in March 2018, and by June 2018, IQ stock was above $45 as investors were drooling over the growth potential of China's video streaming market.Source: Shutterstock But, three things have happened since that June 2018 peak which have caused IQ stock to drop to below $20 today.First, China's economy slowed, mostly as a result of rising trade tensions between the U.S. and China. Second, investors realized that China consumers aren't willing to pay that much for a streaming service, yet. Third, despite big top-line growth, iQiyi's bottom-line has failed to make meaningful progress.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBroadly, then, a more negative backdrop, questions regarding long term potential, and sluggish margin progress have ultimately kept investor sentiment on IQ stock relatively depressed. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% Sentiment will remain depressed until those three headwinds clear up. Unfortunately, those three headwinds don't project to clear up anytime soon. As such, while IQ stock does have a huge upside potential from here, the stock likely won't realize that potential for several more months. Upside Potential Is BigInternet TV is the future of video consumption globally. Leading this global pivot into internet TV are the U.S. and China. But, because China has more people, China's streaming video market is much bigger than America's streaming video market. According to Ampere Analysis, the number of streaming subscribers in China will be nearly double that of streaming subscribers in the U.S. by the end of this year (305 million in China, versus 157 million in America).Still, at 305 million subscribers, that's only about 35% of China's internet-connected population. The U.S. has a streaming TV penetration rate of about 60%. That's why Ampere sees China's streaming market growing to almost 400 million subscribers by 2023.iQiyi is at the center of this huge and rapidly growing China video streaming market. Last quarter, the company reported nearly 100 million paying subs, up nearly 60% year-over-year. Thus, iQiyi is not only a very big player in this market (nearly 40% market share) but also one that is rapidly expanding its dominance.Given all that, the math here for big upside is easy to follow.China's streaming market hits 400 million subs by 2023. iQiyi takes home 40% share, so 160 million subs. Let's assume they can get prices to $5 per month, cheap by U.S. standards. That would yield $9.6 billion in streaming revenue. Assuming the online ad business measures around $2-3 billion by then, you are easily looking at $12 billion in revenues by 2023.Further, assuming operating margins can scale towards 10% (where Netflix has them today), that would flow into about $1 billion in net profit after taxes. Put a 20 multiple on that, and you're looking at a $20 billion market cap.IQ stock has a $13 billion market cap today. Big Risks to the Bull ThesisAlthough the IQ bull thesis is compelling on its surface, there are big risks that reveal themselves upon closer inspection of the company and its fundamentals.First, China consumers aren't accustomed to nor do they want to pay up for a streaming service. Netflix charges around $10 per month, and that's pretty much the going rate in the U.S. for streaming services. But, iQiyi reported membership revenue of roughly $1.5 billion last year on an average sub-base of 69 million. That means iQiyi brought home just under $2 per month on average from each one of its paying subscribers.That's tiny. Thus, the aforementioned $5 per month price point seems like a stretch. Maybe it winds up being just $3-4 per month. Doing the same math as above, that price point produces a future market cap target of just under $15 billion. That's a limited upside from today's levels.Second, iQiyi's margins aren't making much upward progress. The company is still running huge losses, and those losses aren't narrowing. Operating loss margin actually widened last year and total losses increased year-over-year, same with last quarter.The problem here is that at $2 per month, iQiyi isn't taking home enough in revenue per subscriber to really create a clear pathway towards profitability. Further, assuming that the price point does max out around $3-4, the upside potential in margins is limited.Overall, while iQiyi stock does have huge upside potential in an everything-goes-right scenario, present headwinds cloud visibility towards that everything goes right scenario. So long as these headwinds stick around, IQ stock will have a tough time rallying. Bottom Line on IQ StockiQiyi is the Netflix of China, but China's streaming market is very different than America's streaming market, and iQiyi's composition is very different than Netflix's composition.As such, while there is a possibility for IQ stock to turn into a huge winner, the present outlook remains troubled, meaning investors should probably wait for more signs of strength before jumping in.As of this writing, Luke Lango was long NFLX. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post IQ Stock Has Too Many Headwinds to Make It a Compelling Buy appeared first on InvestorPlace.
BEIJING, June 7, 2019 /PRNewswire/ -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment company in China, announced that the iQIYI Knowledge App (the "App") has collaborated with renowned motivational speaker and life coach Nick Vujicic to launch a parenting curriculum of 28 lessons taught by Vujicic himself. This partnership follows IQIYI's recent strategic partnership with LinkedIn, both of which represent the company's commitment to build an IP-based ecosystem of high-quality professional learning content. Under the partnership, the App will launch Nick Vujicic's parenting curriculum with education company "Ikebang".
IQIYI, Inc. Sponsored ADR (IQ) closed the most recent trading day at $17.91, moving +1.39% from the previous trading session.
There's little doubt iQIYI (NASDAQ:IQ) has taken a successful script used by U.S. tech giants into China. But IQ stock is set up nicely for a bearish short thanks to its pricey cost of doing business and the fact that investors already refusing to recommend it.Source: Shutterstock It has been hailed as China's Netflix (NASDAQ:NFLX), and rightfully so. Not only is it a streaming provider itself, but it's also taking a deep dive into the ever-increasing original content demanded by consumers.IQ stock also has a lot in common with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). As InvestorPlace's James Brumley noted recently, in addition to its platform for streaming theatrical content, iQIYI's user-generated content and video advertising business look very similar to Alphabet's YouTube.InvestorPlace - Stock Market News, Stock Advice & Trading TipsStill, despite the similarities to Netflix and Alphabet and inclination toward success, there are no guarantees what's worked so well for those companies will bear fruit for iQIYI. * 10 Stocks to Buy That Could Be Takeover Targets From rocketing costs and mounting losses tied to making original content, to iQIYI's business being challenged by China's slowing economy and indigenous heavyweight competition from Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA), it could be a tough road ahead for IQ stock. And that difficulty was hinted at by April's mixed and concerning operating results. IQ Stock Weekly Chart Click to EnlargePrior to IQ stock's Q1 report, shares were successfully testing a 62% Fibonacci level attached to December's all-time-low and an undercut variation on the classic double-bottom pattern. But earnings produced the equivalent of a shot over the bow for iQIYI bulls.The failure to hold the 62% retracement level is one that many technicians see as a warning of continued weakness and ultimately, a full-blown challenge of the cycle low. In the case of IQ stock, this would mean a test of the undercut double-bottom. That's roughly 18% - 19% below today's share price. Furthermore, whether that price action would result in some sort of meaningful bottom is anybody's guess.As such, the case for shorting IQ stock within its existing bearish trend does maintain some obvious support. Backing up this position, shares this week have also breached the lesser 76% level while taking out a two-week doji and inside candlestick bottoming pattern.If traders are comfortable with the risks inherent in shorting a more volatile stock like IQ, the suggestion is to use a 10% stop-loss. That's an exit that makes sense. It also makes sense knowing today's bearish storyline, just like with NFLX stock, could always be up for a more enthusiastic rewrite in the months ahead.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 4 FANG Stocks Won't Be Bitten By Regulation Threats * 10 Stocks to Buy That Could Be Takeover Targets * 4 Big Bank Stocks Rebounding Compare Brokers The post Why Iam Bearish on iQIYI Stock Today appeared first on InvestorPlace.
About a year ago, the stock of Chinese online TV and movie platform iQiyi (NASDAQ:IQ) was trading at about $40, but this would represent the peak. Since then, iQiyi stock has plunged to about $18, which is the same level the public offering was priced at back in March 2018.Source: Shutterstock IQ was a spin-off from Baidu (NASDAQ:BIDU), which is a Chinese-based search engine. And by the way, BIDU stock has had a much worse performance! During the past year, BIDU shares have gone from $273 to $110, putting the market cap at $39 billion. A big reason for this fall-off has been a rapid deterioration of the growth rate.Then what now for iQiyi stock? Is there a value her or should investors hold back? Well, on the positive side, the market size for the company is enormous. Plus, as in the U.S., there is a secular trend towards streamlining in China and the emergence of 5G should be a strong catalyst.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhile all this is encouraging, I still think investors should be cautious. * 10 Stocks to Buy That Could Be Takeover Targets Here's a look at three notable risks: IQ Stock: CompetitioniQiyi is often called the Netflix (NASDAQ:NFLX) of China, but this really is misleading.First of all, unlike NFLX in the early days, IQ must deal with several massive competitors, which include Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY). These companies have tremendous brands, powerful technology platforms and extensive distribution.As for IQ, it's main partner, Baidu, is fairly weak right now. If anything, the company's search business is getting disrupted from BABA and Tencent, whose WeChat property has over 1 billion users.Next, IQ has a blended business model that includes subscriptions and advertising. Unfortunately, the advertising business has been coming under much pressure. Consider that, as the Chinese economy slows down, it has been easy for companies to cut back on these expenditures.It also appears that IQ has not been effective in optimizing its ad monetization. This is actually perplexing since BIDU has much experience with this. IQ Stock: ContentA big part of the strategy for IQ is to produce original content. No doubt, this comes straight from the Netflix playbook.Despite this, producing content is often dicey. Even some of the premier studios, like Disney (NYSE:DIS), can produce huge flops.Yet there is an added risk for IQ stock: government restrictions and censorship in China. Such things provide an added layer of risk to the content strategy.Besides, original content is expensive. This helps to explain the spiking losses iQiyi stock has sustained. In the latest quarter, they came to a hefty $270.3 million, coming to 4.5 times the losses reported a year ago. IQ Stock: GeopoliticsOf course, the trade dispute between the U.S. and China is taking a toll, and the situation is likely to get worse as President Trump has moved to increase tariffs. It also does not help that both sides seem far apart in terms of coming to some type of agreement.The Chinese government has been taking aggressive actions, such as with lower interest rates and taxes, but the results have been mixed. Then again, trade represents a key part of growth for China. The tariffs are also stirring up much uncertainty, which will make it tougher for businesses to initiate capital investments.Regarding iQiyi stock, the growth has already been decelerating. In the current quarter, revenues are forecasted to increase by 12% to 18%, which compares to 43% in Q1. For the most part, given the sluggishness in China, this slowdown may not be a temporary thing either.Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 4 FANG Stocks Won't Be Bitten By Regulation Threats * 10 Stocks to Buy That Could Be Takeover Targets * 4 Big Bank Stocks Rebounding Compare Brokers The post 3 Reasons to Exercise Extreme Caution When It Comes to iQiyi Stock appeared first on InvestorPlace.