BAIDU Inc.’s iQiyi is targeting a U.S. initial public offering (IPO) as soon as 2018 that could value China’s most popular Netflix-style video streaming service at more than US$8 billion, two sources familiar with the matter said.

The company, controlled by search giant Baidu, is about to kick off negotiations with banks and deal arrangers and is shooting for a valuation of as much as US$10 billion, the sources said.

Baidu wants to continue holding a controlling stake in iQiyi upon the IPO via dual-class shares, the sources said. The IPO process however is in its early stages and the final valuation could change.

IQiyi, the only Chinese service that licenses shows from Netflix Inc., needs to build up its war chest as it battles rival platforms run by Alibaba and Tencent. Baidu, which is also investing heavily in artificial intelligence and autonomous vehicles, needs to buy and create more content to sustain its lead as most-watched among online video platforms.

Quality video is key to keeping users and raising advertising revenue from some 30 million-plus paying subscribers. Tencent and Alibaba have both said they’re committed to spending more for content.

At US$10 billion, iQiyi will be valued at a fraction of Netflix’s but surpass listed Chinese rival Leshi Internet Information and Technology Corp.

Its IPO would come after Baidu founder and chairman Robin Li scrapped plans last year to buy control of iQiyi at an estimated US$2.8 billion enterprise value. (SD-Agencies)