text | Duyu, author | Zhao Erduidao
Himalaya is about to hit the IPO again!
Although both Hong Kong stocks and A-shares are still in a precarious stage, the "unicorn" Himalaya, which was once the leader of the "ear economy" and was sought after by capital, quickly achieved initial results in its "cost reduction and efficiency increase". IPO is on the agenda and a prospectus has been submitted to the Hong Kong Stock Exchange a few days ago - Ximalaya's repeated impact on IPO has been extremely tortuous. However, as a typical case of the traditional Internet entrepreneurial economy, Ximalaya must take "listing" as its phased goal. .
The traditional Internet entrepreneurial economy relies on models to attract investment, use financing to expand the market, and then use the investment listed to various institutions to exit as cash. This is also an important model for the prosperity of the domestic Internet economy in the past 20 years.
For Himalaya, its failure to hit the IPO success in 2019 also means that the "ear economy" it represents is actually difficult to become a mainstream existence.
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Himalaya was established in 2012. The number of users exceeded 10 million at the end of the second year, and the number of users exceeded 200 million at the end of 2016. In one fell swoop, it gathered thousands of favors from capital and raised 9 rounds of financing in 10 years. The cumulative financing exceeded 9 billion yuan, and its valuation once approached 30 billion yuan.
Indeed, the ear economy represented by Himalaya once became the focus of the center stage of the Internet industry. According to the prospectus, Tencent, China Literature, Xiaomi, TAL, and Sony Music are strategic investors in Himalaya. Major financial investors include General Atlantic Investment Group, Zhixin Capital, Goldman Sachs, Xingwang Investment, Creation Partners Capital, and China Internet Investment Fund, Shanghai Cultural Industry Development Investment Fund, Jiaxing Xiuzhou Financial Holdings, etc.
From 2016 to 2019, it can be said that the entire "ear economy" was the most prosperous years of the online audio industry.
In addition to Himalaya, Dragonfly FM was also the darling of the capital market at that time. According to data, Dragonfly FM has had nearly 10 rounds of financing since its establishment in 2011. The list of investors includes well-known institutions such as Baidu, Xiaomi, Sinovation Ventures, Zhidu Shares, and Chinese Online.
Himalaya, Dragonfly FM and Lychee, also known as the top three online audio companies, are considered to have the potential to change the Internet economic landscape. However, from the perspective of 2024, if the listing is successful in the most prosperous year, Himalaya may It will really become the overlord of the Internet economy. Unfortunately, this didn't really happen.
After 2019, the development of online audio began to slow down, and online audio platforms such as Himalaya also encountered development bottlenecks. According to the "2019-2020 China Online Audio Special Research Report" released by iiMedia Consulting, the number of users in China's online audio industry has increased year by year from 267 million in 2016 to 425 million in 2018, but the growth rate has increased from 267 million in 2016 to 425 million in 2018. dropped from 36.9% to 22.1% in 2018.
The good days have passed, but there are still more days to come. Both Himalaya and Dragonfly FM have also embarked on the path of cost reduction and efficiency improvement.
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From the data point of view, Himalaya’s “cost reduction and efficiency increase” is effective.
According to the latest prospectus, Himalaya’s revenue in 2023 will be 6.16 billion yuan, and its adjusted net profit will be 224 million yuan. The latest prospectus discloses Himalaya’s full-year operations in 2023. Himalaya's revenue in 2021, 2022 and 2023 will be 5.86 billion yuan, 6.06 billion yuan and 6.16 billion yuan respectively; gross profit margins will be 54%, 51.9% and 56.3% respectively. The adjusted net profits in 2021, 2022 and 2023 are -718 million yuan, -296 million yuan and 224 million yuan respectively.
Prior to this, from 2019 to 2021, Himalaya's losses during the year increased year by year, from 1.925 billion yuan and 2.882 billion yuan to 5.106 billion yuan respectively. The adjusted losses during the year were 749 million yuan, 539 million yuan, and 759 million yuan respectively. , the cumulative net loss in three years exceeded 2 billion yuan. Its executives have said that for Himalaya, it is still in a period of strategic losses at this stage, with continuous investment in exchange for more shares, larger scale and stronger user stickiness. Once these advantages are consolidated, monetization on this basis will be It's logical.
In August 2022, Himalaya founder and CEO Yu Jianjun stated at an internal employee meeting that he would achieve a single-quarter profit in the fourth quarter of 2022, reverse the long-term loss situation, and achieve full-year profits in 2023, 5 In the next year, it will achieve annual revenue of 20 billion yuan and profit of 4 billion yuan. At present, Himalaya has achieved a profit of tens of millions in a single quarter for the first time in the fourth quarter of 2022. This is also the first time that Himalaya has achieved profitability in ten years of entrepreneurship.
Regarding the improvement in profitability in 2023, Himalaya stated in the prospectus that it is mainly due to the improvement of gross profit margin and improvement of operating efficiency brought about by the expansion of user base, enhanced liquidity and optimization of cost structure. The data in the
prospectus also verifies this. From 2021 to 2023, Himalaya's sales and marketing expenses accounted for a continuous decline as a percentage of total revenue, falling to 44.9% in 2021, 34.9% in 2022, and 33.6% in 2023. R&D expenditures as a percentage of total revenue will drop from 17.5% in 2021 to 15.4% in 2022, and further drop to 15.1% in 2023. In 2023, its R&D expenditures will be approximately 930 million yuan.
In addition, administrative expenses excluding share-based payment expenses (mainly including employee benefits) as a percentage of total revenue decreased from 10.7% in 2021 to 9.2% in 2022 and 7% in 2023. How does
understand these data in the prospectus?
To put it simply, Himalaya's revenue growth has been very slow - development has encountered a bottleneck;
costs have continued to decline, and the proportion of R&D and administrative expenses has declined - the outside world interprets that the effects of layoffs and other actions are immediate.
In other words, Ximalaya and the independent online audio track it is located in are already a very stable market. If you want to make a profit, you can only tap the internal potential.
As the industry leader, Himalaya has encountered problems that Dragonfly FM has always existed. Dragonfly FM has always faced common problems in the industry, that is, the industry has a narrow audience and the public’s awareness of paying is weak. It has also been unable to make a breakthrough in profit exploration. In addition, in the fields of audio books and other fields, Dragonfly FM’s exploration has not been able to produce impressive results. It can be said that Dragonfly FM, like Himalaya, is subject to the shackles of the industry and is difficult to break through.
Lychee FM, which successfully went public in the United States through a tipping model, is also having a hard time. The financial report for the third quarter of 2023 released in November last year showed that Lizhi’s third quarter revenue was 425.1 million, with a net loss of 62 million, 42.1 million monthly active users, and 400,000 monthly paying users. In terms of revenue, Litchi is about a quarter of Ximalaya; in terms of user scale, Ximalaya is also "far ahead". According to the prospectus, in 2023, the average monthly active users of Ximalaya in all scenarios will reach 303 million, and the mobile terminal The average monthly active users reached 133 million.
It should be said that after the launch of Lychee FM, it will not have any impact on Himalaya’s status. So, if Himalaya can successfully land on the Hong Kong stock market this time, will it usher in a new spring for the ear economy?
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According to the prospectus, Himalaya’s revenue sources are paid subscriptions, advertising, live broadcasts and other innovative products and services as its four pillars. In 2023, its revenue will be 3.189 billion yuan, 1.423 billion yuan, 1.13 billion yuan and 418 million yuan respectively. The revenue share ratios were 51.7%, 23.1%, 18.4%, and 6.8% respectively.
Paid subscription services are Himalaya’s main source of revenue, including membership subscriptions and paid on-demand listening services. From 2021 to 2023, the revenue will account for more than 50%. Advertising revenue is Himalaya’s second largest source of revenue. In the past three years, advertising revenue accounted for 25.4%, 24.2% and 23.1% of total revenue respectively. The revenue from Ximalaya’s live streaming service mainly comes from the sale of consumable virtual gifts and items. In 2021, 2022 and 2023, the proportion of this part of the total revenue will be 17.1%, 19.1% and 18.4% respectively.
In addition, the podcast track is becoming the focus of Ximalaya’s efforts in the past two years. Its executives once introduced that Ximalaya currently has nearly 6 million podcast users in a single day.
But whether it is membership subscriptions, advertising, or podcasts, Ximalaya must face the fact that user growth is slowing down or even losing, as well as the inherent industry difficulties of online audio, such as the loading form of advertisements, etc.
However, for Ximalaya and Dragonfly FM, two independent online audio manufacturers, the intensified competition in the large market is also a threshold that is difficult to overcome if they want to achieve a second spring:
short videos and live broadcasts are still eating away at a large number of In user time, it is difficult for Himalaya and Dragonfly FM to withstand this general trend of user preferences alone; in the field of
audio, it has already become the hardest hit area for giants to compete for land. Tencent Music, Bilibili, Douyin, NetEase Cloud Music, etc. have already made plans in the audio field. After Tencent Music acquired Lanren Tingshu, it launched Lanren Changdu. With Tencent Music’s huge user scale, the long-term audio business has gained resources. The growth potential should not be underestimated; Bilibili has previously fully acquired Maoer FM, and in September last year invested in the dubbing company Yinxiong Lianmeng. China Literature Group appears on the latter’s shareholder list, and Byte also launched Tomato Chang Listen, NetEase Cloud Music has added audiobook and podcast entrances - the competition in the audio market is already very strong, and users have already been divided.
WeChat has also added a "listen" function to the discovery page, and the user growth rate is amazing. In addition, in the field of podcasts, Xiaoyuosi has also formed a brand influence similar to Zhihu and Douban.
It’s difficult for Himalaya to lead every track! Limited by the limitations of the entire industry, Ximalaya's growth space has indeed peaked in the eyes of the outside world.
But as an industry observer, Duyujun also hopes that Himalaya’s IPO will go smoothly. After all, it can give various investors a possibility to exit, and it can also give Himalaya better financing channels to continue to strive in the audio field. What Duyujun wrote about the audio field in 2021 still holds true at this time, "Duyujun is still looking forward to Himalaya's successful IPO in Hong Kong, and even going further to be listed in China. On the one hand, it is because audio does have a unique charm, and on the other hand, it is because audio does have a unique charm. On the one hand, through the listing of Himalaya and its popularity in the capital market, we can see how far the ear economy can go and what kind of surprises it can bring to users..."
