iQIYI(US:IQ) Soochow Securities·2024-08-05 10:01Investment Rating - The report maintains a "Buy" rating for iQIYI (IQ) [1] Core Views - The competition in the long video supply side is intense, leading to a slight decline in iQIYI's market share in the first half of 2024. The company is expected to benefit from a rich lineup of dramas in the second half of the year [1][9] - iQIYI's revenue for Q2 2024 is projected to be 7.39 billion yuan, a year-on-year decrease of 5%. The non-GAAP net profit is expected to be 250 million yuan [1][19] - The report highlights the strong performance of upcoming dramas and the company's content production capabilities as key drivers for future revenue growth [1][19] Summary by Sections 1. Competition and Market Share - In H1 2024, the competition in the long video supply side is fierce, with iQIYI's market share slightly declining. The number of dramas released remained stable, with 63 dramas launched in Q2 2024 [1][14] - iQIYI had 5 dramas in the top 20 by viewership, while Tencent Video and Youku had 6 each, and Mango TV had 1. The overall market share of the top 20 dramas accounted for 22.8% of the total market, with iQIYI's share decreasing [1][18] 2. Upcoming Content - iQIYI has a rich lineup of dramas scheduled for release in the second half of 2024, including several high-profile works. The summer release "Tang Dynasty Ghost Stories" is expected to perform strongly, with over 5.5 million reservations and a Douban rating of 8.2 [1][19] - The company plans to launch approximately 59 dramas from H2 2024 to 2025, with many adaptations from well-known authors [1][19] 3. Financial Forecast and Investment Rating - The report forecasts a revenue of 73.9 billion yuan for Q2 2024, with a non-GAAP operating profit of 500 million yuan and a non-GAAP net profit of 250 million yuan. The non-GAAP net profit for 2024 is revised down from 3.1 billion yuan to 2.9 billion yuan [1][19] - The current stock price corresponds to a non-GAAP P/E ratio of 7, 6, and 5 for 2024, 2025, and 2026 respectively, indicating a favorable valuation given the expected content-driven revenue growth [1][19]