Only profitable companies are allowed to be listed in China's stock markets, a challenge that Youku Tudou faces as it aims to have itself listed in the mainland bourse. (Photo : Reuters)
Chinese online video service provider Youku Tudou Inc. is set to have itself included in the domestic stock listing within three years to promote its presence in the lucrative video sector, China Daily reported.
E-commerce giant Alibaba Group Holding Ltd. made the announcement on Wednesday, April 6, after completing the buyout of Youku Tudou, making it as a subsidiary wholly owned by Alibaba.
"China is entering into a golden era for the entertainment industry. The flexible domestic stock market will help Youku Tudou quickly execute strategies and expand presence," Victor Koo, CEO and chairman of the company, said on Wednesday.
Details about the listing were not disclosed.
Youku Tudou said in a statement that it has ended the company's six-year stint on the U.S. bourse when it sent request to the New York Stock Exchange asking for the suspension of its shares.
In October, Alibaba offered to buy all outstanding shares of Youku which it didn't yet own, the report said.
As only profitable companies are allowed to be listed in China's major stock markets, it is unclear how Youku Tudou would manage to go public in China since it is not performing well now, according to analysts.
The company's financial reports showed that Youku Tudou lost more than $200 million in the first three quarters of 2015.
However, as more Chinese consumers would like to pay for Internet video content, the company could still break even within three years, according to Shen Meng, director of Chanson & Co., a boutique investment bank in China.
But Youku Tudou's rivals, such as Baidu Inc.-backed iQiyi, and Tencent Video, a streaming site managed by Tencent Holdings Ltd., are also interested to attract more users and they are willing to pay big amounts for the copyrights of popular dramas and entertainment shows.
A former leader of China's video sector, Youku Tudou is currently losing out to its major rivals, Pang Yiming, a senior analyst at Beijing-based Internet consultancy Analysys International, said.
"Due to its conservative strategies in the past years, Youku Tudou has been falling behind iQiyi and Tencent Video in efforts such as purchasing quality content and migrating its services to smartphones," Pang noted.
