iQIYI(US:IQ) Orient Securities·2024-03-06 16:00Investment Rating - The report maintains a "Buy" rating for iQIYI (IQ.O) with a target price of $6.80 per ADS [2][4]. Core Insights - iQIYI's revenue for Q4 2023 is projected at 7.7 billion yuan, showing a year-over-year increase of 1.5% driven primarily by membership revenue growth. The company anticipates revenue to reach 7.8 billion yuan in Q1 2024 [1]. - The gross margin for Q4 2023 is reported at 28%, with a slight year-over-year decrease of 0.65 percentage points but an increase of 1.06 percentage points quarter-over-quarter. The GAAP net profit for Q4 2023 is expected to be 467 million yuan, reflecting a year-over-year increase of 53.24% [1]. - Membership service revenue for Q4 2023 is 4.8 billion yuan, with a year-over-year growth of 1.37%. The total number of paying members is reported at 100 million, a decrease of 10.13% year-over-year but an increase of 6.7% quarter-over-quarter [1]. - The report highlights a significant increase in user engagement with the launch of six popular series, with participation in membership rewards growing nearly 50% compared to the previous quarter [1]. - Advertising revenue for Q4 2023 is 1.65 billion yuan, up 6.25% year-over-year, although a decrease of 1.42% quarter-over-quarter is expected due to the seasonal nature of advertising [1]. Summary by Sections Financial Performance - Q4 2023 revenue is 7.7 billion yuan, with a year-over-year increase of 1.5% and a quarter-over-quarter decrease of 3.85% [1]. - Q4 2023 gross margin is 28%, with a year-over-year decrease of 0.65 percentage points and a quarter-over-quarter increase of 1.06 percentage points [1]. - Q4 2023 GAAP net profit is 467 million yuan, a year-over-year increase of 53.24% [1]. - Q4 2023 membership service revenue is 4.8 billion yuan, with a year-over-year increase of 1.37% [1]. - Q4 2023 advertising revenue is 1.65 billion yuan, a year-over-year increase of 6.25% [1]. Profit Forecast and Investment Recommendations - The report forecasts GAAP net profits for 2023, 2024, and 2025 to be 1.925 billion, 2.672 billion, and 4.050 billion yuan respectively, reflecting adjustments based on paid user assumptions [2]. - The target price of $6.80 per ADS is based on a 24x P/E ratio for comparable companies [2].