Sogou submitted a prospectus (FORM F-1) to the US Securities and Exchange Commission on Friday to plan to raise up to $ 600 million through an initial public offering. Sogou plans to trade in the NYSE, the securities code for the "SOGO & rdquo ;. Sogou's prospectus is not disclosed in the initial public offering of the issue price range, and the number of shares issued.
Prospectus shows that investment bank JP Morgan Chase, Credit Suisse, Goldman Sachs, CICC will serve as the co-lead underwriter of Sogou's initial public offering; Huaxing Capital will serve as deputy underwriter.
The following is Tencent Technology (micro-signal: qqtech) compiled and compiled Sogou prospectus summary:
Our mission is to make communication and access to information easier.
We are an innovator in the search field and a leader in the Chinese Internet industry. According to China's mobile search volume calculation, our Sogou search is the second largest mobile search engine. According to the statistics provided by iResearch, we were the fourth largest Internet company in China in June 2017, according to the number of active users. Our industry-leading Sogou input method, a strong ecosystem that has been built with Tencent and other strategic partners, has made a major breakthrough in the field of artificial intelligence, allowing us to be uniquely positioned to capture the opportunities for Chinese search and the Internet industry.
IResearch provided statistics show that Sogou search in June 2017 accounted for 16.9% of China Mobile search market share, with 483 million active visitors. Our business grew rapidly, from June 2014 to June 2017, the overall search page traffic growth rate of 30.1%, mobile search page visits annual growth rate of 78.9%. Powered by artificial intelligence, Sogou search offers innovative products and services. For example, our cross-language search service eliminates the Chinese-English language barrier, allowing users to discover English content on the Internet by entering China and read these translated Chinese content.
Chinese input method is a necessary tool for Internet users to enter Chinese characters. IResearch provided data show that in June this year, Sogou input method is ranked first in the cloud-based Chinese input method. Sogou search constantly access to the Chinese language expression and phrases, so that Sogou input method to build a comprehensive, the latest vocabulary. This allows us to improve the efficiency and accuracy of the forecast text. According to iResearch to provide data, Sogou input method in June this year, with 283 million mobile day active users, 88 million PC day active users. Based on the number of active users, Sogou input method is China's second largest PC software, the third largest mobile applications. The Sogou input method provides an application programming interface to almost all applications involving Chinese input, generating large and high-quality data that is critical to our large data capabilities. Sogou input method can predict the user's search intention in real time and allow the user to search directly through its embedded search function, which occupies a considerable part of our organic search traffic.
We work with Tencent and other strategic partners to create and share a vibrant ecosystem. We provide personalized content to users through a variety of services, such as the search Tencent WeChat official account and so on. By working with strategic partners and third parties, we also broaden our access to our channels. At present, the search search is Tencent Mobile QQ browser and Tencent website default search engine. We are also exploring a variety of potential opportunities to strengthen cooperation with Tencent. In October this year, Tencent began testing Sogou search and WeChat integration, so that WeChat users can use Sogou as a search function, access to WeChat external information. After product testing and optimization, we will discuss the business arrangements related to Tencent.
We are at the forefront of artificial intelligence development and have a clear roadmap. By focusing on natural interactions and knowledge calculations, we have made significant breakthroughs in voice and imaging technology, machine translation and Q & A solutions. In addition to deploying machine translations in cross-language search services, we also provide users with a more natural search experience through artificial intelligence-based voice and imaging technology. Q & A technology allows us to provide a direct answer to the user's question, rather than to provide users with a list of network links. Our tested AI technology will help us to introduce more disruptive products and services, such as virtual personal assistants, to provide users with anytime, anywhere.
Our revenue grew at a fast pace, from $ 386.4 million in 2014 to $ 591.8 million in 2015 and $ 644 million last year. As of June 30, 2017, our first half of this year's revenue reached $ 373.2 million, higher than the same period last year, $ 329.9 million. Our revenue comes mainly from search and search related advertising services. Last year, the business revenue accounted for 90.4% of the company's total revenue; the first half of this year accounted for 88.1% of total revenue.
China has a large, fast-growing online search market. The total online search market in China in 2016 was Rmb765bn ($ 11.5bn), which is expected to reach Rmb204.3bn (about US $ 30.7bn) by 2021, Rate of 21.7%. China's online search market growth thanks to the huge and highly potential user base. According to iResearch, the average revenue per search user in China in 2016 was RMB127.1 million (US $ 19.1). Market research firm IDC data showed that the average revenue per search user in the United States in 2016 was $ 152.8. In addition, the growth of advertising budgets from line to offline, as well as key vertical areas such as education, e-commerce, online games, financial services, and health care, will also boost the monetization of China's online search market.
Online search is one of the most significant applications of artificial intelligence. The core competencies needed to develop online search, including large-scale data processing, computing power and advanced algorithms, are also the cornerstones of artificial intelligence development. Search engines can efficiently process continuously updated mass data, the use of advanced algorithms to determine the user needs the query content, these capabilities are necessary for the development of artificial intelligence. As a result, online search companies are best suited for developing and commercializing new artificial intelligence products and services.
Artificial intelligence will also lead to further breakthroughs in search. For example, Q & A techniques allow us to provide a direct answer to a user's question. Other artificial intelligence technologies, such as voice recognition, but also to provide users with a more natural search experience. Predictive and interactive capabilities of artificial intelligence and large data enablement will provide search engine with more profitable opportunities such as personalized content for Internet financial credit analysis. Artificial intelligence is also a key driver of smart hardware, providing consumers with new Internet entrances and extending search cases to extend PCs and mobile devices to homes, cars and other environments.
To provide users with online information and content of the process, from the gateway to the interactive and information transmission, is evolving. Online search and Web directory has always been the main way to provide online information to users. The development of artificial intelligence and large data will support additional methods of information delivery, such as virtual personal assistants and dynamic messages, that can provide targeted data and content to users.
Our competitive advantage:
Sogou business consists of four major components: Sogou search, Sogou input method, intelligent hardware and other products. Sogou search, including WeChat search, Tomorrow search, knowledge search and other 10 products, Sogou input method, including PC input method, mobile input method, voice input method and image input method 4 products. Other products are mainly Sogou browser, Sogou map, etc .; intelligent hardware mainly for the sugar cat series.
We believe that the following competitive advantages will ensure that we become innovators in the search field, the leader of the Chinese Internet industry:
- China search and Internet market leader;
- personalized online search service;
- Advanced large data capabilities;
- proven sophisticated artificial intelligence technology;
- proven performance growth capacity;
- Strong strategic cooperation with shareholders
- a visionary management team and a technology-driven culture.
We intend to develop our business through the implementation of the following strategies to enhance operational capacity:
- continue to expand search market share;
- Develop next generation man - machine interface;
- release large data values;
- continue to pursue the innovation of artificial intelligence technology;
- continue to strengthen the ability to monetize;
Seeking selective strategic investment and alliances.
While having a range of competitive advantages, we are also expected to face a variety of challenges, including:
--Fierce competition in the market;
- We need to maintain and expand the base of users and advertisers;
- the importance of innovation and the introduction of new products and services;
- maintain cooperation with shareholders and third parties;
- to maintain the rapid growth of business;
- pending or future potential legal disputes that may have a negative impact on our financial and operational results;
- Our search results may contain information that is inaccurate or harmful to the user and may be considered inappropriate or illegal;
- Regulatory regulations may affect our ability to operate current or future business.
Prior to the initial public offering, Sogou executives and directors jointly held the company's 570.95 million A-level common stock, accounting for 16.5% of the company's total share capital. Among them, Zhang Chaoyang holds 32 million shares of A-class common stock, accounting for 9.2% of the total share capital; Sogou chief executive Wang Xiaochuan holds 19.2 million shares of A-class common stock, accounting for 5.5% of the total share capital.
Sogou currently the largest shareholder of Tencent, holding the company 151,557,875 shares of B-class common stock, accounting for 43.7% of the total share capital; Sohu for the second largest shareholder, holding company 3,720,250 shares of A-class common stock, and 127.2 million shares of B Ordinary shares, representing 37.8% of the total share capital.
Sogou as of June 30, 2017 in the first half of the total revenue of 373 million US dollars, higher than the same period last year, 323 million US dollars. Among them, search and search related advertising revenue of $ 329 million, higher than the previous year's $ 294 million; other revenue of 44.4 million US dollars, higher than the same period last year 28.9 million US dollars. Sogou 2016, 2015 and 2014 total revenue of $ 660 million, $ 592 million and $ 386 million; of which search and search related advertising revenue were $ 597 million, $ 540 million and $ 358 million, the other Revenues were $ 63.2 million, $ 52.3 million and $ 28.5 million respectively.
Sogou in the first half of 2017 revenue costs $ 193 million, higher than the same period last year 140 million US dollars. Sogou 2016, 2015 and 2014 revenue costs were $ 303 million, $ 248 million and $ 166 million.
Sogou in the first half of 2017 gross profit of 180 million US dollars, lower than the same period last year 183 million US dollars. Sogou 2016, 2015 and 2014 gross profit were $ 358 million, $ 344 million and $ 221 million.
Sogou's operating expenses for the first half of 2017 were $ 143 million, up from $ 132 million in the same period last year. Excluding R & D spending of $ 71.3 million, up from $ 66.4 million in the previous year; sales and marketing expenses of $ 61.4 million, up from $ 56.7 million in the previous year; general and administrative expenses of $ 9.9 million, higher than the previous year $ 8.7 million. Sogou 2016, 2015 and 2014 operating expenses were $ 286 million, $ 242 million and $ 253 million. Sales and marketing expenditures were $ 123 million, $ 94 million and $ 78 million respectively, and general and administrative expenses were $ 24.6 million, $ 16.7 million and $ 16.7 million, respectively, and $ 113 million $ 5.1 million.
Sogou in the first half of 2017 operating profit of 37.7 million US dollars, lower than the same period last year 51.5 million US dollars. Sogou 2016, 2015 and 2014 operating profit were $ 71.6 million, $ 102 million and operating loss of $ 31.9 million.
Sogou in the first half of 2017 pre-tax profit of 38.8 million US dollars, higher than the same period last year 27.7 million US dollars. Sogou 2016, 2015 and 2014 pre-tax profits were 56.1 million US dollars, 109 million US dollars and a loss of 26.8 million US dollars.
Sogou in the first half of 2017 net profit of 35.8 million US dollars, higher than the same period last year 27.7 million US dollars. Sogou 2016, 2015 and 2014 net profit of 56.1 million US dollars, respectively, 99.5 million US dollars and a net loss of 26.8 million US dollars.
As of June 30, 2017, the total amount of cash and cash equivalents held by Sogou was $ 310.9 million, which was higher than the $ 286.1 million as at 31 December 2016.