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Why iQiyi, Inc. Stock Popped Today

By Steve Symington – May 9, 2018 at 5:07PM

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The "Netflix of China" announced early results from its new partnership with Here's what investors need to know.

What happened

Shares of iQiyi Inc. (IQ -9.03%) jumped 11.4% on Wednesday after the Chinese streaming-video specialist announced encouraging early results from its new joint membership program with e-commerce leader (JD 1.81%). More specifically, iQiyi revealed that more than 1 million users have signed up since the program's launch on April 27, 2018.

Young people in a circle looking at their smartphones


So what

iQiyi also noted that when it revealed the exclusive partnership with JD early last week, its primary aim was "to provide high quality cross-platform services to members and explore high-value opportunities in the online paid service market."

"We are thrilled to see consumers rushing to take advantage of the many benefits of our joint membership package with JD," added iQiyi senior VP Yang Xianghua. "As Chinese consumers become more willing to pay for premium online services -- whether in entertainment or retail -- we are confident that subscription offerings that offer outstanding value will continue to increase in popularity."

Now what

iQiyi just announced its first quarterly report as a publicly traded company late last month, highlighting 67% year-over-year growth in membership revenue, to $334 million. In its press release this morning, the company revealed it already has over 61 million paying members and counting.

With the help of successful new partnerships like this one, and with China's booming middle class increasingly opting to pay for value-added services, iQiyi seems to be just getting started. It's no surprise to see the stock rallying in response.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends The Motley Fool recommends iQiyi. The Motley Fool has a disclosure policy.

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