China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

IQIYI (IQ US): Embracing Moderate yet Stable Growth

[iQIYI, Lnc. (IQ US, BUY, TP US$6.25) Review]: Ads Revenue Will Continue to Have Fair Growth

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We raise iQIYI’s membership/ads growth in 2Q23 from 12.9%/10.6% to 15.7%/22.4% YoY because of high quality content and recovery of major advertisers.</li>
<li>We upgrade iQIYI’s rating to BUY because:1) iQIYI exhibits advantages in content quality and production capabilities. 2) Major advertisers are expected to increase their advertising budgets continuously.</li>
<li>Emergency of mini drama is another variable for the Chinese online video industry. However, we anticipate the impact on iQIYI is relatively limited currently.</li>
</ul>


We raise iQIYI’s membership/ads growth in 2Q23 from 12.9%/10.6% to 15.7%/22.4% YoY because of high quality content and recovery of major advertisers.
We upgrade iQIYI’s rating to BUY because:1) iQIYI exhibits advantages in content quality and production capabilities. 2) Major advertisers are expected to increase their advertising budgets continuously.
Emergency of mini drama is another variable for the Chinese online video industry. However, we anticipate the impact on iQIYI is relatively limited currently.


[iQIYI (IQ US, BUY, TP US$6.25) Rating Change]: Competitive Advantage Is Established, Raise to BUY

iQIYI Inc

[iQIYI (IQ US, BUY, TP US$6.25) Rating Change]: Competitive Advantage Is Established, Raise to BUY