When will the world War II Himalaya biggest “life gate” of HKEX be solved?
Source: Bo Wang finance original title: “World War II” Hong Kong Stock Exchange, himalaya’s biggest “life gate” when can solve?Article | moneypenny jun recently, online audio platform Himalayan in hkex website updated prospectus.The update is a new move after the second ipo prospectus was filed in Hong Kong last September.Data disclosed in the latest prospectus shows that ximalaya’s income does not increase the phenomenon of profit still exists, in the final analysis, or its own “hematopoietic” ability to be improved.Ximalaya, an online audio platform, was founded in 2012 and has developed so far. The platform covers audio books, live broadcasting, education, intelligent hardware, audio creator ecology and so on, which are relatively rich.Ximalaya is China’s largest online audio platform in terms of total listening time on mobile devices and total online audio revenue in 2021, according to Searing.In addition, its market share in China’s online audio industry in terms of online audio revenue was 28 percent in 2021.The update of the prospectus, the author noticed an obvious feature is that ximalaya’s revenue and gross margin rose year after year, but it suffered losses year after year.According to the prospectus, Ximalaya’s operating revenue from 2019 to 2021 is 2.69 billion yuan, 4.08 billion yuan and 5.86 billion yuan respectively.The adjusted losses from 2019 to 2021 were 749 million yuan, 539 million yuan and 759 million yuan respectively.In terms of composition, subscription, advertising and live broadcasting are the main sources of Ximalaya’s revenue. In 2021, subscription revenue was 2.99 billion yuan, up 49.0% year on year.Advertising revenue was 1.49 billion yuan, up 38.8% year on year;Livestreaming revenue was 1 billion yuan, up 39.6 percent year-on-year.The latest prospectus shows that Ximalaya’s gross margin is not low, and a substantial increase in succession.From 2019 to 2021, the gross margin is 44.5%, 49.1% and 54.0% respectively.By contrast, litchi FM, another online audio platform already listed in the US stock market, has yet to achieve a gross margin of more than 30% by 2021.The company made more money but lost money. The problem is that costs are too high.Ximalaya’s costs are mainly composed of content purchase, marketing investment and R&D activities, among which content purchase accounts for the largest part.There are three types of creators providing content on Himalaya, PGC (professionally produced content), PUGC (professionally produced content) and UGC (user-produced content).According to the prospectus, Himalayan PGC, PUGC and UGC content active creators in 2021 were 2,300, 7,700 and 4.38 million, respectively.PGC, PUGC and UGC accounted for 4.9%, 4.8% and 90.3% of the total content duration respectively.In the three years from 2019 to 2021, excluding revenue-sharing costs, Himalaya will pay 167 million, 256 million and 333 million for content alone, with high content costs.In addition to the external to spend money to buy content, internal Himalayas also need to spend money to maintain content.Of the 3,074 employees, 175 work in content production, 495 in platform and content operations, and 295 in content screening and review, making content-related teams more than 31% of the total team, according to the prospectus.Compared with the vertical audio APP “De Dao”, the main basic attraction of Ximalaya to retain users is the rich and varied content, and the content expenditure will only increase. It may not be easy to reduce the cost. Moreover, in order to maintain the attraction of users, Ximalaya has spent a lot of money on marketing.In 2021, Ximalaya’s sales and marketing expenses amounted to 2.63 billion yuan, accounting for 45 percent of its total revenue, according to the prospectus.In my opinion, for a content platform, the growth of revenue is mainly driven by channel marketing, which is not a long-term solution.Users “hematopoietic difficult” with marketing to obtain customers, itself beyond reproach.But a good company needs to focus not only on customer acquisition, but also on customer retention and revenue contribution. Otherwise, it’s a nightmare to spend a lot of money to attract new customers and not be able to keep them or get the revenue from them.For Ximalaya, all the costs paid in content are to enable users at different levels to meet their favorite choices as much as possible, and to serve users.The number of Ximalaya users has increased somewhat, but there are two problems. One is that the APP’s own users’ hematopoietic ability is not strong, and the other is that the paying users’ hematopoietic contribution is not much.In 2021, Ximalaya had more than 268 million monthly active users, according to the prospectus.These users come from two sources: the APP itself and third-party partner platforms.Generally, the monthly activity of the APP itself is the basic disk, and the healthiest state is to realize the continuous growth of active users on the APP platform.The authors note that more than half of The Monthly active users in Himalaya are from third-party open platforms (Internet of Things and vehicle-mounted scenarios or third-party applications).If you look further back:In 2019, the monthly active users of Ximalaya APP were 82.3 million, and those from third-party open platforms were 57.7 million. By the end of 2020, the two numbers had changed to 102 million and 113 million respectively. In two years, the monthly active users of Ximalaya’s own platform only increased by less than 20 million, while those from third-party channels increased by more than 55 million.In other words, the growth of ximalaya’s user market is mainly driven by third-party channels, and the user growth capacity of its own APP is limited.On the other hand, the user base expanded, but the user payment situation was not as optimistic as described in the prospectus.From 2019 to 2021, ximalaya’s monthly average revenue per paying user dropped from 11.6 yuan to 10.8 yuan and then to 11.2 yuan, and the “hematology” ability of the main paying member users was not stable.How will the Himalayan experiment work?Compared with video and live broadcast, audio makes great use of fragmented time. For example, users can listen to it at any time when they are commuting in the morning, eating at lunch, doing housework or driving, making consumption scenes more extensive.Ximalaya firmly grasped this feature and made various attempts from accompanying scenes.In the use of hardware scene, Himalayan tried AI sound.As early as June 2017, the Himalayan just launch the full content of intelligent AI speakers lesser series products, including lesser nano speakers and lesser AI really wireless headset, but technology companies such as huawei, ali, baidu, millet on AI intelligent hardware power frequently, the intelligence of the Himalayan acoustics product presence is not so strong.In terms of geography, it will provide more targeted services for users in third-tier cities and below, and achieve full coverage of content for users of different ages.On the product itself usage scenarios, Himalayan and smart phones, smart car, smart home, such as Internet platform for cooperation, through the development of the Internet of things and on-board scenario provides its users with different usage scenarios of audio service, the author believes that through these scenarios, the Himalayan can further broken pieces of the user integration time, prolong the listening time, improve permeability.But how to improve the user’s payment rate, Himalaya seems to have its own confusion.Prospectus said only that the future will continue to be through more rich, high quality content and services, and constantly consolidate the members’ rights and interests to achieve the value proposition, using AI algorithms and big data at the same time, plans to more accurately match the effect advertising with audio content and the end user, thus improve advertisers advertising efficiency and return on investment.Ximalaya has repeatedly stressed the need to expand the user base and improve user activity, but the ultimate goal of increasing activity is to transform the consumption of paid items on the platform, including subscription, pay-per-view and so on.At present, It seems that Ximalaya has found no effective link between active user scale and paid behavior.Conclusion: In 2020, the online audio penetration rate in the United States is 47%, while that in China is only 16.1%. The track where Ximalaya is located still has a lot of space, but it also faces the challenge of user-paid education and content realization.But the premise is to continue to do good content.High-quality, wide-ranging content takes a long time to develop and many difficult issues need to be solved (like copyright issues).The Himalayas still have a long way to go.