iQiyi’s stock surged after a slew of good news
iQiyi (IQ), which is China’s response to Netflix, soared by 26.9% in the week ended May 11. iQiyi spun off from Baidu (BIDU) and went public in March. It’s currently trading higher than its IPO price of $18.00. iQiyi’s success in China has hinged on the growing Chinese middle class and tech-savvy Millennials.
iQiyi launched a partnership with e-commerce giant JD.com (JD) late last month. Customers who purchased an annual subscription of either platform’s premium service would have access to the other platform’s premium services. The companies revealed that more than 1.0 million users have signed up for the cross-promotional program. Both companies are leaders in their respective fields.
iQiyi’s growth is being driven by its premium service
iQiyi recently announced its first quarterly report as a public company. The company’s membership revenues in the first quarter grew 67.0% YoY (year-over-year), reaching $334.0 million. Its total revenues rose 57.0% YoY to reach $777.6 million. The company stated that it had 61.0 million premium subscribers, a significant jump from the 50.8 million paying subscribers it reported at the end of 2017.
iQiyi announced last week that it was the first video streaming company in China to have its digital rights management system approved by ChinaDRM Lab, which is recognized by Hollywood. The stock remains volatile, as most stocks are in the first few months after going public. iQiyi stock has fallen 6.3% since May 11.