According to foreign reports, Baidu (NASDAQ: BIDU) revealed in its Q4 2017 earnings report on Tuesday that its online video subsidiary, IQI, had submitted a prospectus to the Securities and Exchange Commission (SEC) Manual Form F-1, planned for initial public offering on the U.S. securities market. Baidu is expected to remain the controlling shareholder of iQIYI following the completion of its IPO.
While making iQiyi an independent public company, Baidu will step up its investment in mobile and artificial intelligence. IQIYI in 2016 revenues have exceeded 1 billion US dollars. Netflix, a U.S. video streaming service, agreed last year to offer IKeYi some homemade content, such as "Strange Words," to enter the Chinese market. Aiqiyi currently competes in China's online video market including Alibaba Group's Youku Tudou, Tencent's Tencent video and more.
Founded in 2000, Baidu's business mainly focuses on online search. However, as core search businesses become more saturated, Baidu has placed artificial intelligence at the heart of its business plan. Baidu had previously promised to launch driverless cars by the end of this year and will achieve mass production of driverless cars by 2021. Huge investment led to R & D spending Baidu growing. For the fourth quarter ended December 31, 2017, Baidu's R & D expenditures reached RMB3.7 billion (about US $ 569 million), an increase of 25% over the same period of last year. At the same time, Baidu's content costs rose to 3.75 billion yuan (about 577 million U.S. dollars), an increase of 46% over the same period last year. The year-over-year increase of Baidu's content costs was mainly due to the increase in the content cost of Baidu's content.
Baidu fourth quarter total revenue of 23.6 billion yuan (about 3.62 billion US dollars), an increase of 29%. Baidu mobile revenue in the fourth quarter accounted for 76% of total revenue, compared with 65% a year earlier; operating profit of 4.8 billion yuan (about 734 million U.S. dollars), an increase of 118%; Operating profit margin was 20%, higher than the same period last year 12%. Baidu fourth quarter net profit of 4.2 billion yuan (about 639 million US dollars), an increase of 1%. Baidu fourth quarter diluted earnings per ADS of 12 yuan (about 1.90 US dollars). Excluding share-based compensation expenses (excluding GAAP), Baidu's fourth-quarter net profit was RMB5.2 billion (about US $ 804 million), an increase of 14% over the same period of last year. Excluding share-based compensation expense (not in accordance with GAAP), fourth-quarter diluted ADS diluted earnings per share were RMB15 (US $ 2.29).
Baidu fourth-quarter net profit exceeded market expectations, but revenue fell short of expectations. According to Thomson Reuters data provided, not in accordance with GAAP calculations, Baidu fourth quarter earnings per share of 2.10 US dollars, revenue of 3.64 billion US dollars. Baidu earnings report shows that, in accordance with the US GAAP, Baidu fourth quarter diluted earnings per ADS of 15 yuan (about 2.29 US dollars), higher than analysts expected.
Baidu's American depositary receipts trend stronger than the overall market trend. In the past 12 months, Baidu shares have risen 22%. Shares in Baidu rose 3.96 U.S. dollars, or 1.79 percent, in regular trading on the Nasdaq Stock Market Tuesday to close at 225.60 U.S. dollars. In the subsequent after-hours trading, Baidu shares rose 11.78 US dollars, or 5.22%, the stock price was 237.38 US dollars. In the past 52 weeks, Baidu lowest stock price is 166.00 dollars, the highest stock price is 274.97 dollars. According to Tuesday's closing price calculation, Baidu's market value of about 78.334 billion US dollars.