Aurora Mobile (JG 7.97, -0.83, -9.41%) made its IPO debut
yesterday. It priced a downsized 9.06 mln share IPO (from 12 mln shares) at
$8.50, the low-end of the expected $8.50-10.50 range. The stock then opened for
trade at $9.00.
JG operates a mobile big data platform in China. Through its Developer Services unit, JG reaches approximately 90% of mobile device coverage in China. From these mobile devices, JG gains access to, aggregates, cleanses, structures, and encrypts vast amounts of real-time and anonymous device-level mobile behavioral data. JG uses artificial intelligence and machine learning to derive knowledge from this data, enabling customers to make better business decisions.
The company provides a comprehensive suite of services to mobile app developers in China. Its leading developer service, push notifications, which JD refers to as JPush, had a 53.8% market share of the push notification service market in 2017. Push notification is the most popular app developer service in China, accounting for 36.7% of the app developer services used by the top 100,000 mobile apps in China.
The number of mobile apps using push notification is growing rapidly. The Chinese government has adopted a "National Big Data Strategy" promoting the development of big data, propelling the construction of big data infrastructure as well as an acceleration in sharing of data resources and development of big data applications.
Its developer services easily integrate with all types of mobile apps and provide core in-app functionalities needed by developers, including push notification, instant messaging, analytics, sharing and SMS. Its services have been used by 318,000 mobile app developers in a great variety of industries, such as media, entertainment, gaming, financial services, tourism, ecommerce, education, and healthcare.
On the Data Solutions side, JG's core offerings include:
Targeted marketing (XiaoGuoTong): JG helps advertisers improve their marketing effectiveness by enabling them to target the right audience with the right content at the right time.
Financial risk management: JG assists financial institutions in making informed lending and credit decisions.
Market intelligence: JG provides investment funds and corporations with real-time market intelligence, such as its product iApp, which provides analysis and statistical results on the usage and trends of mobile apps in China.
Location-based intelligence (iZone): JG helps retailers track and analyze foot traffic, conduct targeted marketing and help with site selection.
Mobile internet penetration in China has grown substantially over the past few years. Mobile internet users in China grew from 619.8 mln in 2015 to 752.7 mln in 2017. Mobile has become the primary mode of accessing the internet for consumers in China, and consumers are embracing an increasingly digital lifestyle. As a result, there has been an increase in the number of mobile apps used in China. This proliferation of mobile apps has led to a robust third-party mobile app developer services market in China.
Taking a quick look at the financials, JG is not yet profitable but revenue is growing strongly. Revenue jumped 305% in 2017 to US$45.4 mln. In 1Q18, revenue grew 295% year/year to US$20.15 mln. JG derives revenue from both its Developer Services unit and its Data Solutions segments. On a final note, JG priced poorly but is worth keeping on the radar as this was a Goldman-led deal with a small float of 12.0 mln ADSs, which is usually a good combination. So it could attract attention in the coming weeks or months.
- OUR VIEW
- LEARNING CENTER