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iQIYI, Inc.

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iQIYI Achieves Steady but Slow Growth in Q2 2021China's online entertainment service company iQIYI released its unaudited Q2 2021 financial results on August 12. The revenue growth was rather unimpressive, while the company has been implementing strategies around expanding market presence, diversifying content, and securing a larger user base in light of future growth. iQiyi (IQ:NASDAQ) is an online entertainment company in China, providing a variety of video streaming services and premium content to worldwide users. The company's deep-learning-based predictive algorithms utilize third-party content to build content libraries catering to the diverse tastes of its users. A glance at the Q2 2021 financials According to iQIYI's unaudited financial results, the company's revenues reached CNY 7.6 billion in the second quarter of 2021, a 3% YoY increase. In contrast, Tencent's total revenue achieved a year-over-year increase of 23% during the same quarter. Total subscribing members reflected a slow growth as well, increasing 106.2 million by June 30, 2021, up only 1.2% year-over-year. However, the company's operating loss and diluted net loss showed a decline from the previous year. Specifically, during this quarter, iQIYI's operating loss was CNY 1.1 billion and its operating loss margin was 15%, compared to CNY 1.3 billion and 17% in 2020, respectively. The decreased net loss partially resulted from iQIYI's diversified content and latest movie series, including theatrical, S-rated network, and original movies under the Premium Video On Demand (PVOD) model. For PVOD movies distributed through a paid subscription, the company earned 42% of revenue share despite other content providers. The content distribution revenue did not have positive financials compared to the other two revenue streams, this part dragged down 20% from the same period in 2020 due to fewer barter transactions and increased cash transactions that caused offsets. Barter transactions determine the value of content revenue estimated by the company's internal management. iQIYI's expenses also played a critical role in balancing the second quarter's financials. Specifically, the costs were flat compared with the same period in 2020. Unlike the first quarter of 2021, when the company's content costs had an 8% increase from the same period in 2020 due to the decline of licensed content cost, the second quarter returned to the flat level. The R&D and general expenses also had a slight year-over-year increase of approximately one-to-two percent in this quarter. The total other expenses were also driven higher by the increased interest expenses in various financing activities. Equipped with core competitiveness in the online entertainment industry, iQIYI is also empowered by proprietary technologies to curate captivating content for users and stimulate a large-scale paid content subscription business in China. In January 2021, iQIYI's VR division announced the completion of a Series B funding round led by Yitang Changhou Fund and Fresh Capital, setting the record for the largest single round of funding in China's VC sector since 2020. iQIYI's disciplined strategies Yu Gong, the Chief Executive Officer of iQIYI, explained that the second-quarter results were largely in line with the company's expectations. Although the growth was not significant, he stated that the increased number of subscribed members was driven by the hit original dramas launched during this second quarter, providing some positive operating metrics. Meanwhile, iQIYI launched its Lite app targeting lower-tier cities in China and overseas markets, including Southeast Asia. Overviewing China's Internet demographics, the emergence of live streaming and short-to-medium video platforms, like Douyin and Kuaishou, have cut a big share of the long video market. To encounter this challenge, the long-video streaming service, iQIYI, decided to increase the penetration rate of suburban users to develop new markets. In this way, the company aims to improve user retention by securing users with low-cost phones. Since launching this app in 2019, the company has seen rapid user growth. By the second quarter of 2021, this app's peak DAU exceeded 1.3 million, with over 1 million average weekly daily active users. The company's strategies have placed membership, online advertising, and content distribution services as three primary revenue streams. In that regard, member services revenue was CNY 4 billion, flat compared with the last year. Online advertising, on the other hand, had shown a 15% increase from the same period last year, driven by the sustained rebound of brand-advertising budgets amid the macroeconomic recovery after the coronavirus pandemic in China. With the increasing penetration rate of digital technology among Gen X and Gen Z populations in the country, the company is expected to see new consumers using its subscription services. In a nutshell iQIYI's 2021 Q2 financial results showed the company's ability to carry on growth momentum in attracting more users based on an expanded content portfolio and enlarging user base. The company's revenue growth and reduced year-over-year net loss have displayed a trend of slowly improving business performance.
NASDAQ:IQ
by EqualOcean
iQIYI Earns CNY 7.6 Bn in Q2 2021Owing to the success of original TV dramas, the large Internet content company still maintains remarkable revenue in the off-season. On August 12, 2021, iQIYI published the unaudited financial report for the second quarter of 2021. In the second quarter of 2021, its total revenue reached CNY 7.6 billion, up 3% year over year. Among them, the revenue from member services reached CNY 4 billion, accounting for 52% of the total revenue, while the revenue of online advertising services reached CNY 1.8 billion, accounting for 23%. Meanwhile, in the second quarter, iQiyi's revenue cost reached CNY 6.9 billion, of which the content cost was CNY 5.1 billion, basically the same as the same period in 2020. It is worth mentioning that the company's net loss was reduced to CNY 1.4 billion, which has narrowed year-on-year for five consecutive quarters. The company also announced that, as of June 30, 2021, the company had 106.2 million subscribers. Yu Gong, CEO of iQIYI, said that although the second quarter was an off-season, driven by the company's continuous launch of original TV dramas, its subscription members increased significantly and continued to lead the market in a number of operational indicators. At the same time, iQIYI Extreme App for users in sub-tier cities in China and the company's overseas business have shown a strong development momentum.
NASDAQ:IQ
by EqualOcean
IQ Apparently in Wycoffian Terminal Shake Out (compare Silver)Introduction Bitcoin's recent markdown has put Wycoff and Distribution on a lot of new traders radar as well as investors who have not had to deal with this kind of pattern recognition. There were a lot of people that thought that it looked too picture perfect so disregarded it, Guess what? They were taken the most by surprise and I know what it is like to be there because I was there 3-4 years ago when I had problems believing in TA because so much of it so so bad. That leads to good news on IQ as IQ appears to be in Terminal Shake out and it is looking picture perfect. I have marked out the lower end of the action and have left the top alone because I think the indicators have done a good job showing that resistance. The volume on the final stage of the shake out is lower than what took us edge to edge on the bollinger band and value VPVR value area and this low volume helps us see that sellers are approximately exhausted. Another way to confirm the fact that the selling was relatively low volume is the Value Area did not move down. Much like a slow but persistent sell off can slowly bend a bollinger band lower and lower it can also drag the value area down. I have been watching IQ for a couple of years now and have a couple of posts. My last post was bullish and I was going to update it when I bought some calls and I never pulled the trigger. This time is a bit difference. I have the stock and I have some OTM calls already on the books. It might go lower somehow but my entry this week is pretty solid for a long term hold and I hope to trade the options like a degenerate. Indicators I have put the monthly bollinger band on the weekly chart to show that price actin has gone below the monthly bollinger band. That is a very solid entry point if you generally have any faith in the long term outcome of an asset. Price has also gone below the Volume Profile Value area which contains +/-1 standard deviation of volume by price. When price goes out of the Value Area to the downside when it recovers you often see price actin go coast to coast and end up at the top of the value area. If price action is as bullish as I expect price can hop out of the limits of the BB and VPVR Value area as you can see in silver. From there price would enter into a multi-month re-accumulation. The On Balance Volume with EMAs also has a bollinger band that I often don't show in my posts because if it isn't needed it just adds visual distractions. But the circles have shown times were a green week after a massive sell off has kinked the OBV at the bollinger band and price action has recovered. If you look at the second blue circle you can see how above the Volume Profile Visible Range moved down. That means the sell off hit a tipping point and was significant to move the whole visible range down roughly $5. That VPVR has not moved down in such a serious way with this dump. Silver Below is silver with the bollinger band and VPVR during the "Covid crash" and we can clearly see that buying with price action below both was a fantastic entry for a trade or investment. You should have the tools from the main chart to see all the key points of Accumulation. And I roughly expect something similar to happen with IQ. A rather quick move to or above the Point of Control and then a massive spike in price. I have not used the On Balance Volume because silver futures are a different beast with a different history. Fundamentals and Conclusion I think IQ has a very strong chance of behaving like silver did after its dump, so I bought some. Silver sold off for no good reason, as it didn't lose its industrial or intrinsic value and it is not like you can spread a virus by contaminating a silver mine and IQ sold off because some over-leveraged hedge fund degenerate couldn't answer his margin call, his stuff got liquidated and the momentum traders took this way too low. There was earnings a couple of days ago and it seems that the company can turn a profit within like, 5 years. Look at Facebook and Netflix below and how long it took these companies to have their stock clear the high of their first month of public trading. There is going to be a shake out off the weak hands. My only concern is a rout in tech stocks could take this lower but so far it is doing well.
NASDAQ:IQLong
by This_Guhy
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