Never made a profit? Don’t worry. Here are 5 US-listed Chinese tech companies that haven’t, either

Prioritizing profits over traction has become a rule of thumb for most startups these days, especially in freemium-obsessed Asia. But what about when businesses aren’t startups anymore? How far are they willing to take that reasoning? In China, some of the biggest listed tech companies still aren’t turning profits, instead emphasizing investments, R&D, marketing, and, of course, user acquisition. Here are five of China’s biggest listed tech companies that, to date, haven’t made a dime.


youku logo Youku (NYSE:YOKU) is China’s most popular online video portal with 400 million video views per day, and its mobile video app is behind only WeChat and QQ Mobile in terms of the time users spend on it. Despite that, it’s still never made a profit since it listed on the NYSE in 2010.

The site’s main source of revenue comes from advertising. In April, China’s ecommerce leader Alibaba invested US$1.22 billion into Youku. The first step of their new partnership is allowing vendors on Alibaba’s Taobao marketplace to run preroll video ads on Youku clips.


qunar logoQunar‘s (NASDAQ:QUNR) most recent earnings report showed the company beat expectations, with revenues up 83.6 percent year-on-year with mobile revenues driving the trend. Still, the Baidu- and GGV Capital-backed travel booking site still lives in the shadow of market leader Ctrip (NASDAQ:CTRP). Where Ctrip has raked in the profits for several consecutive quarters, Qunar has never made it out of the red.


jd dogChina’a biggest ecommerce IPO to date actually broke even in the latest reported quarter, but just barely, according to its SEC prospectus. JD (NASDAQ:JD) made a modest US$10 million profit in the first nine months of 2013, compared to losing US$208 million and US$272 million in 2011 and 2012, respectively. That’s the price you pay when you’re up against Alibaba.

The CEOs of both Qunar and JD have stated “short-term earnings” are unimportant. Instead, the key focus for JD is on gross merchandise value (GMV), or in other words, how much stuff it sells. However, with its recent IPO and tie-up with Tencent’s WeChat, things are looking up for JD.


tuniu logoWhen Tuniu (NASDAQ:TOUR) filed for its initial public offering, it was widely looked upon with some suspicion. Tuniu operates much in the same vein as Qunar, but with a heavier focus on travel and tour packages. As a result, its profit margins are far lower than other travel booking sites, and business blog Huxiu even implied its IPO was a Ponzi scheme. In 2011, 2012, and 2013, the company ran net losses of US$14.7 million, US$17.2 million, and US$12.7 million, respectively.


ku6 logoKu6 (NASDAQ:KUTV) is probably the least-famous name on this list – and a little-known video site in China – but the company actually listed on the NASDAQ before Youku. Afterward, Youku and other Chinese streaming media sites proceeded to pummel Ku6 into the ground. It deserves a special place here for no other reason than the alarmingly disproportionate rate at which the company is able to hemorrhage money. Not only has it never made a profit, the company reported losing eight dollars for every one dollar earned in the last quarter of 2013.

Ku6 is one of the worst-performing Chinese tech stocks in history, and it’s only a matter of time before it delists and either gets acquired or fades into obscurity.

So should profits be a priority? According to this list, they certainly don’t seem to be a true indicator of success.

Four out of five of these companies are listed on the NASDAQ rather than the NYSE. That’s likely because the NASDAQ is more open to listing younger, more volatile tech stocks.

All data was sourced from the respective companies’ quarterly reports, SEC prospectuses, earnings call transcripts via SeekingAlpha, and YCharts. Note some past figures converted from RMB use current conversion rates.

Editing by Steven Millward; top image via Flickr user Simon Cunningham

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