China's Online Video Giant Youku Narrows Q1 Loss
The company plans additional NYSE share listing to raise investment capital.
BEIJING – China’s leading online video sharing website Youku reported a narrower net loss in the first quarter and announced it would sell more shares on the New York Stock Exchange to raise money to invest in technology, infrastructure and content acquisition.
Beijing-based Youku, which had a 24 percent share of the revenue in China's online-video market in the fourth quarter of last year, up from 23% in the third quarter, according to research firm Analysys International, listed on the NYSE in December. Its IPO raised $203 million and posted the strongest first-day gain of any U.S. IPO in five years.
For the three months ending March 31, Youku posted a net loss of 46.9 million yuan ($7.2 million), compared with a year-earlier net loss of 51.2 million yuan, the company said in a statement.
Chief executive Victor Koo hasn’t said when he expects Youku to turn a profit and discounted concerns about a bubble in China's Internet sector, which continues to draw strong investor demand.
The reported loss was less than expected by five analysts polled by Thomson Reuters.
Youku’s revenue more than doubled in the first quarter to 128 million yuan ($19.5 million) from 48.6 million yuan a year earlier, beating analysts’ forecasts.
The cost of content to share with China’s 457 million Internet users is going up on the short term with the cost of bandwidth, but CFO Liu Dele said costs would stabilize in the long term as the sector consolidates.
Koo has said the company is considering acquisitions but has made no targets clear.
Rival Tudou's market share fell to 18 percent from 19 percent, according to Analysys.