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Original title: Kuaishou rushes to manage the Hong Kong Stock Exchange short video track competition
Source: Economic Information Daily
The two main platforms at the top of the short video track are embarking on a fierce competition for capital. On the evening of November 5, social short video platform Kuaishou formally filed an IPO prospectus on the Hong Kong Stock Exchange, which is expected to become the “first short video stock”. According to media reports, Bytedance is also planning to list some businesses including Douyin and Toutiao in Hong Kong. The analysis showed that, as the two main platforms lead the national short video track, the overlap between Kuaishou and Douyin users is increasingly high and the two sides will also face more intense and close competition.
Kuaishou’s prospectus shows that the company’s annual revenue rose from 8.3 billion yuan to 39.1 billion yuan from 2017 to 2019. Live broadcasts, online marketing services and other commercial activities constitute the main source of revenue for Kuaishou. However, the company as a whole continues to lose money. The prospectus shows that in 2017-2019, the company’s net profit attributable to its parent company was -20.045 billion yuan, -12.429 billion yuan and -19.652 billion yuan. Net profit attributable to the parent company in the first half of 2019 and 2020 was -26.9 billion yuan, – 68.91 billion yuan.
While Kuaishou is going public with a substantial loss, there is news that Douyin, another short video platform in China, is also looking to go public on the Hong Kong Stock Exchange. According to Bloomberg News, ByteDance is seeking a funding round with a valuation of $ 180 billion, with a scale of approximately $ 2 billion. At the same time, he plans to list some businesses including Douyin, Toutiao and Watermelon Video in Hong Kong. In response to the above information, the manager of Bytedance did not give a positive response to the reporter from “Economic Information Daily”.
According to data from Quest Mobile, as of June 2020, the number of monthly active users in the short video industry reached 852 million, with an active penetration rate of up to 70%. The market size of the short video industry in China is estimated to increase from RMB 5.53 billion to RMB 21.103 billion from 2016 to 2021. In the future, the competition for short video tracks will further intensify and the struggle locked between the two platforms will become more intense.
From the perspective of the shareholding structure of both sides, both Douyin and Kuaishou have a strong shareholder background. Kuaishou’s prospectus shows that as of the date of the report, institutional investor Tencent Investment holds 21.567% of the shares; Douyin’s parent company, ByteDance, created a strong layout across all areas of content ecology this year. As a major business segment of Bytedance, Douyin also continued to be strengthened.
In terms of products and content,Orient SecuritiesAccording to the report, the user overlap of Douyin and Kuaishou is nearly half, and user distribution is gradually approaching. In addition, the user needs of the two are similar and both are products that meet the content consumption needs of users for leisure and entertainment, social networking, sharing and information acquisition.
From the perspective of user activity, the Kuaishou prospectus shows that as of June 30, 2020, the average daily active users of Kuaishou China apps and applets reached 302 million and the monthly active users reached 776 million; according to Douyin on November 3, 2020 According to data released at the eco-friendly conference of the company account, Douyin has 600 million active users every day and users with more than 30 minutes accounted for 35%.
Orient Securities analysts said Douyin and Kuaishou are gradually getting closer. The important reason behind this is that the number and duration of growth of the two users has exceeded the bonus period. The proximity of products, algorithms and value positions will also make the two products experienced, User overlap is becoming higher, the two sides will also face more intense and close competition.
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Responsible director: Shao Yuxiang
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