The Netflix of China, iQiyi is on a roll having surpassed the 100-million subscriber milestone, however, good news end when amidst the celebration for having millions of users, the company’s stocks still suffered a huge plunge.
iQiyi Inc.’s IQ, -8.19%, a streaming platform in China commonly compared with Netflix Inc. NFLX, -0.84% in the U.S., shares fell more than 10% in late trading as financial results came in a bit lighter than expected.
The plunge comes after the company reported a fiscal first-quarter net loss of 2.3 billion renminbi ($339 million), or RMB3.22 a share, on sales of RMB7.1 billion, roughly $1 billion in U.S. dollars.
Before the report was disclosed, analysts have been expecting the company to report a loss of 3.17 renminbi on revenue of RMB7.16 billion.
The company, which started offering publicly last year, has already had 100.5 million subscribers, up nearly 50% from 67.1 million a year ago with 98.9% paying for the service.
“We aspire to become a technology-based entertainment giant that brings fun and joy to people and their families,” the company said in its prospectus during its IPO.
The company also undershoot analysts’ expectations with its second-quarter forecast, guiding for revenue of 7.21 billion to 7.63 billion renminbi, while the average analyst forecast was for 7.98 billion renminbi, according to FactSet.
Since it was created in 2010, iQiyi has grown into the largest internet video streaming service in China, measured by monthly average users (MAUs) in 2017, according to iResearch, a Chinese third-party research firm that is widely quoted in the prospectus.
The company’s revenue model comes from paying subscriptions, advertising, and content distribution. The company’s original content has proved popular in China, accounting for six of the top 10 original internet drama series in the country in 2017, according to iResearch.