Company Overview - iQIYI, Inc. (IQ) is expected to report disappointing results for the third quarter of 2025 [1] - There is potential for improvement in the intermediate term due to new policies in the Chinese media sector [1] Industry Insights - The article reflects a mixed view on the performance of iQIYI within the broader context of the Asian equity market [2] - The author emphasizes a focus on value investing opportunities in Asia, particularly in the Hong Kong market, which may influence investor sentiment towards companies like iQIYI [2]

Group 1 - iQIYI, Inc. (IQ) is expected to report disappointing results for the third quarter of 2025 [1] - There is potential for improvement in the intermediate term due to new policies in the Chinese media sector [1] Group 2 - The Value Pendulum specializes in Asian equity markets, focusing on value investment opportunities, particularly in Hong Kong [2] - The author provides insights on deep value balance sheet bargains and wide moat stocks, along with monthly updates for investors [2]

Core Insights - iQIYI is focusing on practical and simplified virtual production technology, aiming to enhance efficiency rather than pursuing complexity and scale [1][3] - The number of iQIYI's virtual production projects is expected to grow by 125% year-on-year by 2025, with full-process participation in major film projects [3][5] - The company has developed proprietary algorithms and technologies, including a virtual production platform called IQStage, which integrates over 20 patents and software copyrights [5][19] Virtual Production Development - Virtual production is gaining traction among creators, with significant interest from both domestic and international markets [5][10] - iQIYI has completed over ten virtual production projects since 2021, showcasing advancements in color and lighting matching, as well as virtual depth of field [5][10] - The company has introduced innovative technologies such as a waterproof scenic turntable and a quick-release LED screen structure, enhancing shooting capabilities [5][19] Creator Perspectives - Industry professionals, including producers and directors, shared insights on how virtual production has transformed content creation, allowing for greater aesthetic freedom and solving practical challenges [7][10][12] - Notable projects like "Tang Dynasty Ghost Stories" utilized virtual production to create complex scenes that were previously difficult to visualize [10][12] - Creators emphasized the importance of having a strong creative idea and cost-effective design when considering virtual production [15][18] AI Integration and Future Prospects - AI advancements are expected to significantly reduce the production cycle of virtual projects, with iQIYI's digital asset library containing over 30,000 proprietary digital assets [19][21] - The integration of AI in virtual production allows for rapid 3D model reconstruction, enhancing the efficiency of the production process [19] - iQIYI's efforts in virtual production are seen as a gateway to the metaverse, with plans for immersive experiences based on high-precision digital assets [19][21] Cost and Accessibility - iQIYI has reduced the cost of using its virtual photography studio to 35,000 yuan per day, making it more accessible for creators [18] - The company offers comprehensive support throughout the production process, including design, asset creation, and on-site filming [18][19]

Group 1 - iQIYI and Xpeng Motors saw an increase of over 1% [1] - Bilibili, NetEase, Baidu, and NIO experienced a rise of nearly 1% [1] - JD.com increased by 0.06% and Pinduoduo by 0.03% [1] Group 2 - Alibaba experienced a decline of nearly 1% [1]

Core Insights - iQIYI hosted its first virtual production flagship studio open day, emphasizing practical and simplified technology for virtual production rather than complex systems [1] - As of now, the number of iQIYI's virtual production projects for 2025 has increased by 125% year-on-year, and the company has fully participated in headliner film projects [1] - AI has been fully integrated into the production process, enabling applications such as AI concept design, model generation, and rapid 3D scene scanning [1] Group 1 - iQIYI has been a pioneer in applying virtual production technology in commercial series since 2021, completing over ten projects that have been broadcast [2] - The company has developed several patented algorithms for color and lighting matching, virtual depth of field, and created innovative structures for virtual and real scene integration [2] - Virtual production has entered a mass production phase, with AI expected to significantly shorten production cycles [2] Group 2 - The successful application of virtual production relies on understanding and action, with the choice of appropriate scenes being crucial [2] - Early understanding of virtual production can inspire creativity during the script phase, while hands-on experience allows creators to grasp the technology's capabilities [2]

Core Insights - iQIYI is hosting a Virtual Photography Flagship Studio Open Day on November 2 at the Hengdian Film Industry Park, showcasing advancements in virtual production technology [1][3] - The event will feature industry leaders sharing insights on the latest cases and trends in virtual production, highlighting the collaboration between iQIYI and notable creators [1] Group 1: Virtual Production Technology - The upgraded IQStage virtual production system will be demonstrated in real-time, showcasing the entire process from camera tracking to real-time rendering and compositing [3] - The flagship studio spans over 500 square meters with high-quality LED walls, supporting high-speed shooting with 200 flawless frames [3] Group 2: Production Achievements - Since its establishment in Hengdian in 2022, iQIYI's virtual studio has produced several visually impressive series, including "Fox Demon Little Red Daughter" and "Cloud Feather" [3] - The virtual production technology platform has entered mass production in 2023, with plans for a comprehensive upgrade of hardware and software by the end of 2024 [3]

Macro Dynamics - The Ministry of Finance and the State Administration of Taxation announced a tax policy regarding gold transactions, exempting value-added tax for members or clients trading standard gold through the Shanghai Gold Exchange and Shanghai Futures Exchange, effective from November 1, 2025, to December 31, 2027 [2] - A nationwide 1% population sampling survey has commenced, targeting approximately 5 million households and 14 million individuals to gather data on demographics, employment, migration, marriage, fertility, and housing conditions [3] Energy Sector - In September 2025, 7,218 new renewable energy projects were registered, including 32 wind power projects and 7,184 solar power projects, with a significant focus on distributed solar energy [6] - The completion of China's thorium-based molten salt experimental reactor in Gansu represents a significant advancement in nuclear energy technology, aiming to reduce reliance on imported uranium and enhance energy security [7] Financial Institutions - Zhejiang Wangshang Bank reported a total asset scale of 521.46 billion yuan as of the end of September 2025, marking a 10.7% increase from the beginning of the year, with a slight decrease in operating income but a 30.2% increase in net profit [9] Market Data - On October 31, U.S. stock indices collectively rose, with the Nasdaq up 0.61%, marking a 2.24% increase for the week and a 4.7% increase for October [11] - The Nasdaq China Golden Dragon Index rose by 0.53% on October 31, ending a five-month decline [12] Company Dynamics - Novo Nordisk's CEO announced that the company is nearing completion of its plan to lay off 9,000 employees as part of a global restructuring effort [14] - Meituan's flash sale reported significant sales growth on the first day of its Double 11 promotion, with nearly 800 brands seeing sales double compared to the previous year [15] - A land dispute involving Hainan Natural Rubber Industry Group's subsidiary has been reported, with local authorities intervening to maintain order following a conflict over land rights [16]

Group 1 - The Nasdaq China Golden Dragon Index rose by 0.53% on November 1, ending a five-month streak of gains with a cumulative decline of 4.19% in October [1] - NIO saw an increase of over 3%, while XPeng Motors rose by over 2%, and iQIYI increased by nearly 2% [1] - Alibaba experienced a decline of over 2%, and JD.com fell by nearly 1% [1]

Core Viewpoint - The emergence of generative AI is creating a disruptive impact on the film and television industry, necessitating timely adaptation to avoid falling behind [1][3]. Group 1: Impact of AI on the Industry - Generative AI has rapidly developed, capable of producing content that surpasses human imagination, posing a significant challenge to the traditional film industry [1][3]. - The industry has experienced previous disruptions from short video platforms, and now AI is reshaping industry rules at an even faster pace [3]. - The current attitude towards AI in the industry can be summarized in four stages: "invisible, undervalued, misunderstood, and unable to catch up" [3]. Group 2: Opportunities and Challenges - AI presents a critical opportunity for the Chinese film industry to "overtake on a bend," similar to past technological innovations that have driven growth [3][4]. - Recent advancements in AI models have addressed previous issues related to content controllability, stability, and consistency in the film industry [3]. Group 3: The "112 Law" - The "112 Law" suggests that when a technology reduces content production costs to below 10% of the original, the number of creators can increase by over 10 times, and the number of works can increase by 100 times [4]. - This transformation will lead to a complete restructuring of the industry, affecting the demand for on-site shooting, studio sizes, and the number of roles in art, acting, and screenwriting [4]. Group 4: Talent Structure Changes - The current talent distribution in the film industry resembles a "pyramid," with top creators at the peak and numerous entry-level workers at the base [5]. - AI is expected to shift this structure towards a "dumbbell" model, where top creators enhance their efficiency and value through AI, while entry-level positions face significant challenges [5]. - The industry is encouraged to recognize the opportunities presented by AI and actively embrace the integration of "AI + film" to avoid falling behind in technological advancements [5].

Group 1: Amazon - Amazon's stock price surged by 12.2% at opening, with market capitalization increasing by $274.2 billion (approximately ¥1.95 trillion) [2] - In Q3, Amazon reported net sales of $180.2 billion, a 13% year-over-year increase, surpassing market expectations of $177.8 billion; net profit reached $21.2 billion, up nearly 40% [4] - AWS cloud business revenue grew by 20% year-over-year to $33 billion, exceeding analyst expectations and marking the strongest growth since 2022, alleviating concerns about AWS lagging in the AI competition [4] Group 2: Apple - Apple reached a historical high in stock price before a short-term decline; Q4 revenue was $102.47 billion, exceeding $100 billion and marking a year-over-year increase of 8% [5] - Net profit for Q4 was $27.47 billion, a significant year-over-year increase of 86%, with diluted earnings per share rising by 91% to $1.85 [5] - Despite overall strong performance, revenue from Greater China declined by 3.6%, becoming the only region with negative growth [5] Group 3: Cryptocurrency - Most cryptocurrencies saw an increase, with Bitcoin returning to the $110,000 mark, up 2.81%, Ethereum at $3,874, up 2.39%, and Dogecoin rising over 3% [7] Group 4: Gold Market - The World Gold Council noted that geopolitical tensions, persistent inflation, and uncertainty in global trade policies have driven demand for gold as a safe-haven asset [6] - The outlook for the gold market remains optimistic, supported by a weakening dollar, expectations of rate cuts, and the risk of stagflation, indicating further potential for gold price increases [6]