Baidu’s iQIYI Discloses Financials

Source: Baidu

iQIYI, the online video streaming service majority-owned by Baidu, recorded US$1.6 billion (RMB 11 billion) in total revenue in 2016, an 113% increase from the previous year, according to Baidu 2016 annual report.

A majority of the total revenue was from advertising; an increasing portion was from premium subscriptions and sub-licensing of licensed contents.

Content costs, the biggest contributor to the increase in total costs and expenses, increased 122% and 136% in 2016 and 2015, respectively.

Baidu acquired a controlling stake in iQIYI in 2012 and later merged it with video service PPS which was acquired by the former in 2013. iQIYI’s major competitors are Youku-Tudou, acquired by Alibaba Group in late 2015, and Tencent Video.

iQIYI issued US$1.53 billion convertible notes in January 2017, among which US$300 million was purchased by Baidu.

Meitu’s 2016 Results

Source: Meitu
Source: Meitu

Virtual items, launched on the short video and live streaming app Meipai in June 2016, generated RMB45.6 million in gross sales. More than 60% of the total sales were paid to content creators. Average monthly paying users were more than 200,000.

Advertising revenues decreased 17% year-on-year.

The total monthly active users (MAU) of Meitu apps, including Meitu (photo editing), BeautyCam (selfie editing) and Meipai, was 450 million. Average revenue per MAU was RMB0.292 in 2016.

Source: Meitu

A total of 748,256 smartphones were sold in 2016, up from 387,775 in the previous year.

Average selling price was RMB1959, up from RMB1699 in the previous year. In February 2017 the company launched T Series, which include a more premium-priced model T8.

Meitu got listed on the Hong Kong Stock Exchange in December 2016. Here you can find more about the company’s businesses.

Tencent’s Active Mobile Payment Users Reached 600M in Q416

Monthly active users of Tencent’s mobile payment services and average daily payment transactions through them both surpassed 600 million in December 2016.

Red Packet transfers, however, are counted as payment transactions and account for the largest portion of the total transaction volume, followed respectively by payments to online businesses and at physical locations, according to Tencent management.

The breakdown among WeChat Payment, QQ Wallet and third-party mobile businesses who have added either/both of the two mobile payment services isn’t disclosed.

Payments and cloud services recorded RMB17 billion in revenue in 2016, so far the least profitable segment for Tencent that the combined cost of revenue is as high as RMB14 billion. The company believes their cloud service is the No. 1 in gaming and video segments in China.

Source: Tencent

Tencent’s 2016 revenues increased 41% from the previous year, mainly driven by revenue growth in smartphone games. Tencent recorded RMB70.8 billion in total gaming revenue for 2016, a 25% year-over-year growth. NetEase, its distant competitor in gaming, recorded RMB28 billion in gaming revenues last year.

Smartphone game revenues increased 80% year-over-year to RMB38.4 billion in 2016. ARPU of mobile game is RMB145-155 in the fourth quarter.

Honour of Kings, in-house developed mobile game and similar to Tencent’s own LoL in theme and design, surpassed 50 million daily active users as of the end of 2016.

Social networks revenues, generated from premium subscriptions, virtual items and paid digital content, increased by 54% year-over-year to RMB37 billion, mainly driven by sales of digital content and game-related items.

Tencent Video’s paying users surpassed 20 million in 2016. iQIYI and Youku-tudou, its direct competitors announced 20 million and 30 million paying users in June 2016 and December 2016, respectively. Tencent believes they are the No. 1 in terms of mobile video views.

Daily active users of Karaoke service WeSing reached 35 million as of the end of 2016, more than doubled year-on-year. It monetizes, like many other Chinese Karaoke services and live streaming services, through virtual gift sales.

Daily paying readers of its online literature publishing platform were around 2.5 million, more than doubled year-on-year.

Source: Tencent

Photo and Video App Developer Meitu to Raise up to US$710M in Hong Kong IPO

image credit: Meitu
image credit: Meitu

Meitu, Inc., which provides photo and video editing and sharing services, plans to launch IPO on the Hong Kong Stock Exchange on December 15th to raise between HK$4.9 billion and HK$ 5.5 billion (roughly US$630M – US$710M).

The company claims that the combined install base of their mobile apps had reached 1.1 billion worldwide as of June 2016, with 446 million monthly active users and 370 million overseas users. (Document in Chinese)

Starting in 2008 with PC-based photo editing software, Meitu provides now photo editing app MeituPic (or Meitu Xiuxiu), selfie app BeautyCam, video clip sharing and live streaming app Meipai, Android phone MeituKiss and Meitu Camera.

As of June 2016, Meipai, MeituPic and BeautyCam had 141 million, 103 million and 113 million monthly active users, respectively. Meipai users spend an average of more than 30 minutes daily, according to the company. 70% of Meitu’s users were young women as of January 2015.

MeituKiss phone, designed for selfie fanatics, has released six generations since 2013.

In April 2016, Beauty Box, a mobile game co-operated with its developer Forgame, was launched.

The company recorded RMB86 million, RMB488 million and RMB742 million (about US$120M) in revenue in 2013, 2014 and 2015, respectively. It hasn’t turned a profit.

Revenue sources include in-app advertising and hardware sales. 60%, 88%, 90% and 95% of the total revenues were from hardware sales in 2013, 2014, 2015 and the first half of 2016, respectively.

Meipai began enabling live stream viewers to buy virtual gifts to reward content contributors earlier this year. Meitu also plans to add a social shopping platform to leverage the fashion influencers on its platform in the first half of 2017.

Mobile Video App Developer Yixia Technology Announces US$500M Series E Funding

image credit:
image credit:

Yixia Technology announces US$500 million in Series E round of funding from a group of investors including Sina Weibo, which owns the leading Twitter-like service in China, and Wepiao, the Tencent-backed e-ticketing and film distribution company. Financial terms were not disclosed.

The product portfolio of Yixia Technology includes short video sharing app Miaopai, live video broadcasting app Yizhibo, lip-sync app Xiaokaxiu, and a couple of video-related tools. Its strategic investor Sina Weibo has integrated the live video streaming service, Yizhibo, and has been promoting the other two mobile services to Weibo users.

Here’s an article I wrote a couple of months ago about Yixia Technology and China’s mobile video clip sharing market based on an interview with Liu Xinzheng, senior vice president of Yixia Technology.

Momo Q316 Revenues More than Triple, Driven by Live Video Streaming

Source: Momo Inc.(Click to enlarge)
Source: Momo Inc.(Click to enlarge)

Location-based social networking app Momo reported a 319% year-over-year increase in revenue for the third quarter, mainly driven by growth in user-generated video streaming revenues.

Virtual gift sales during live video streams increased 188% quarter over quarter, accounting for 69% of Momo’s total revenue in the quarter.

Paying users for the live streaming service doubled quarter over quarter. Average revenue per paying user (ARPU) was about US$48.

More than 10,000 paying users spent an average of RMB5000 (about US$740) monthly, according to CEO Tang Yan. More than 40% of broadcasters made RMB30,000 (roughly US$4400) or more monthly.

Source: Momo Inc. (Click to enlarge)
Source: Momo Inc. (Click to enlarge)

Hani, the separate app for live video streaming launched by Momo in March 2016, has reached one million monthly active users, according to management.

Cost and expenses increased 199% due to increases in revenue sharing with live video broadcasters, fees to payment service providers, bandwidth costs as well as share-based compensation expenses.

Momo 7.0, a major update released in the last August, added Moments, a short video capturing and sharing service where virtual gift giving is also available. In October the app added audio and video communications capabilities provided by

Alibaba’s Finance Affiliate Invests in Thailand Fintech Company Ascend Money

Ant Financial, the fintech affiliate of Alibaba, announces plans to invest in Ascend Money, a Thailand-based fintech company that operates payments service TrueMoney and Ascend Nano for lending. Besides Thailand, Ascend Money also has presence in Indonesia, the Philippines, Vietnam, Myanmar and Cambodia.

“Ascend Money targets two under-served groups, including digital consumers with its innovative mobile wallet application and the under-banked with its massive agent network. It currently provides payment services such as domestic and international remittance, bill payment, top up services, online and offline payments and payroll services. Future services will include lending, insurance and investment”, according to Ant Financial.

In 2015, Ant Financial and Alibaba invested in Indian fintech company, Paytm.

Alipay, the payment service of Ant Financial, had been available at over 80,000 retailers in some 70 foreign countries and regions as of September 2016, according to Ant Financial. The company’s global partners in payments include Concardis, Ingenico, Wirecard and Zapper in Europe, First Data and Verifone in North America, Paysbuy and Counter Services in Southeast Asia, Recruit in Japan and KICC and ICB in Korea.

The latest release of Apple’s App Store for China has added Alipay.