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424B4
IQIYI, INC. filed this Form 424B4 on 03/29/2018
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Table of Contents

Beijing QIYI Century, Beijing iQIYI, and Shanghai Zhong Yuan obtained High and New Technology Enterprises, or HNTE, status to enjoy a preferential tax rate of 15% from 2013 to 2018, from 2015 to 2017 and from 2013 to 2018, respectively, to the extent it has taxable income under the Enterprise Income Tax Law of the PRC, or EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority.

Our PRC subsidiaries, our consolidated affiliated entities and their subsidiaries are subject to VAT at a rate of 3%, 6%, or 17% on the services we provide and related surcharges.

If our holding company in the Cayman Islands or our subsidiary outside of the PRC were deemed to be a “resident enterprise” under the EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.”

Results of Operations

The following table summarizes our consolidated results of operations and as percentages of our total revenues for the years presented.

 

    For the Year Ended December 31,  
    2015     2016     2017  
    RMB     %     RMB     %     RMB     US$     %  
    (in thousands, except for percentages)  

Revenues:

             

Membership services

    996,682       18.7       3,762,183       33.5       6,536,028       1,004,569       37.6  

Online advertising services

    3,399,935       63.9       5,650,366       50.3       8,158,924       1,254,004       46.9  

Content distribution

    387,687       7.4       500,952       4.4       1,191,816       183,179       6.9  

Others

    534,280       10.0       1,323,906       11.8       1,491,582       229,251       8.6  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    5,318,584       100.0       11,237,407       100.0       17,378,350       2,671,003       100.0  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

             

Cost of revenues(1)

    (6,041,764     (113.6     (11,436,595     (101.8     (17,386,563     (2,672,266     (100.0

Selling, general and administrative(1)

    (1,204,464     (22.6     (1,765,824     (15.7     (2,674,990     (411,138     (15.4

Research and development(1)

    (499,957     (9.4     (824,482     (7.3     (1,269,806     (195,166     (7.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

    (7,746,185     (145.6     (14,026,901     (124.8     (21,331,359     (3,278,570     (122.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

    (2,427,601     (45.6     (2,789,494     (24.8     (3,953,009     (607,567     (22.7

Total other (expenses)/income, net

    (136,345     (2.6     (271,440     (2.4     208,512       32,047       1.2  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax

    (2,563,946     (48.2     (3,060,934     (27.2     (3,744,497     (575,520 )       (21.5

Income tax (expense)/benefit

    (11,166     (0.2     (13,088     (0.1     7,565       1,163       0.0  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

    (2,575,112     (48.4     (3,074,022     (27.4     (3,736,932     (574,357 )       (21.5
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Note:

(1) Share-based compensation expense was allocated as follows:

 

     For the Year Ended December 31,  
     2015      2016      2017  
     RMB      RMB      RMB      US$  
     (in thousands)  

Cost of revenues

     5,837        9,479        34,895        5,363  

Selling, general and administrative

     21,330        30,447        130,994        20,133  

Research and development

     17,027        22,466        67,535        10,380  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     44,194        62,392        233,424        35,876  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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