UPDATE: iQIYI (IQ) PT Lowered to $4.80 at CLSA

CLSA analyst Elinor Leung lowered the price target on iQIYI (NASDAQ: IQ) to $4.80 (from $8.50) while maintaining a Outperform (2) rating.

The analyst comments "iQiYi’s 4Q21 results could disappoint. Total revenue could fall 2.3%YoY to Rmb7.3bn, of which membership revenue may grow 5%YoY, driven by price hikes, but ad revenue could fall 12%YoY given a lack of content and soft ad demand. Losses may widen on one-off severance packages. iQiYi reportedly cut more than 20% of its staff to focus on top-notch content. As content control will remain tight, we expect iQiYi’s revenue to decline in 2022 but achieve breakeven in one quarter. We lower revenue by 8%/12% for 22/23CL and adjust adj net profit by Rmb1bn/- Rmb0.5bn in 22/23CL. We lower target from US$8.50 to US$4.80. O-PF."

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