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Lizhi’s average mobile MAUs for the app has nearly doubled over 3Q17-19. At the same time, its audio entertainment mobile MAUs too have nearly doubled and the average audio entertainment paying users increased by 154%.
However, its revenue has not been able to keep pace with the growth in paying users as the ARPU has been volatile. Moreover, while the company showed some signs of moving towards profitability in 2018, those have now disappeared as it had to ramp-up its sales and marketing expenses once again due to the flagging revenue growth in 2019.
Furthermore, it has been unable to monetise around 90% of its MAUs, and has instead been relying on audio entertainment for growth. Thus, it's unclear if the company deserves to be given credit for the entire MAU base when it hasn’t been able to monetise most of them.
Lizhi FM Pre-IPO - Strong MAU growth hasn’t been accompanied by anything else of significant strength
Lizhi plans to raise around US$100m in its US IPO. It offers a mobile app to create, store, share, discover and enjoy audio, and interact through it. As per iResearch, it is the largest audio user generated content (UGC) community in China with 160.6m podcasts uploaded since inception and 3.4bn hours spent listening to these podcasts.Lizhi’s average mobile MAUs for the app has nearly doubled over 3Q17-19. At the same time, its audio entertainment mobile MAUs too have nearly doubled and the average audio entertainment paying users increased by 154%.
However, its revenue has not been able to keep pace with the growth in paying users as the ARPU has been volatile. Moreover, while the company showed some signs of moving towards profitability in 2018, those have now disappeared as it had to ramp-up its sales and marketing expenses once again due to the flagging revenue growth in 2019.
Furthermore, it has been unable to monetise around 90% of its MAUs, and has instead been relying on audio entertainment for growth. Thus, it's unclear if the company deserves to be given credit for the entire MAU base when it hasn’t been able to monetise most of them.
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Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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