IQIYI denies short-selling controversy analysis, says joint member income calculation method or defect

IQIYI denies short-selling controversy analysis, says joint member income calculation method or defect
Sauna Night News (Reporter Bai Jinlei) April 8th, bearish on the encounter with Wolfpack Research.Iqiyi responded to Sauna Night.com, “Regarding the comments published by third-party organizations today, iQIYI ‘s report, the cited data is seriously misrepresented and does not conform to the actual situation.The financial and operational data are true and meet SEC requirements. We firmly deny all false accusations and reserve the right to pursue legal actions.Gong Yu, founder of iQiyi, said in the circle of friends that the above denial statement stated that evil is not overwhelming, and it depends on who wins in the end.Iqiyi fell by more than 11% during the session due to short selling by Wolfpack Research. Since then, iQiyi has grown against the trend and increased by 3 at the close.22% to US American Depositary Receipt 17.30 dollars.Wolfpack Research said that iQIYI had fraudulent activities before it went public in 2018, and that fraud continued after it went public.Through due diligence, iQiyi is expected to increase its revenue by 8 billion to 13 billion in 2019, accounting for 27% to 44% of reported revenue, and the company has increased the number of users by approximately 42% to 60%.In addition, the muddy water of the short agency said it helped Wolfpack Research investigate iQiyi.In response to Wolfpack Research ‘s bearish report, several secondary market analysts said that the Wolfpack Research report blamed iQiyi ‘s operating data and the cost of purchasing dramas, but there are imperfections in the joint member ‘s income.The cost calculation method and other issues are also notable, especially the selected time counter is more accurate.”This short-selling report is not as solid as Ruixing’s, mainly because of accounting issues, and it is difficult to cause substantial harm to iQiyi.”One of the analysts said.The Wolfpack Research report stated that after obtaining all the Chinese credit reports of iQIYI’s VIE and WFOE, it was found that the deferred revenue reported by iQIYI to the SEC increased by 261 in 2015, 2016 and 2017 respectively.7%, 165.5% and 86.2%, these pre-IPO overestimation essentially caused iQiyi’s post-IPO income to continue to be overestimated.In response, an interviewer ‘s analyst told Sauna and Yeenet that the back-end data of domestic Internet companies, only the company clearly knows, a large amount of third-party data is crawler crawling or model estimation, and cannot be regarded as decisive.evidence.In order to support the authenticity of the short report, Wolfpack Research stated that between October and November 2019, it conducted a personal survey of 1,563 people in the Chinese target population of iQiyi and found about 31.9% of iQIYI users pass it with JD.The joint membership of iQiyi partners such as com or Xiaomi, access to VIP content TV, and iQiyi is counted as a double membership on a gross basis, which means that recording all revenue increases the cost of its partners to be allocated as expenses.For this item, the above analysts told Sauna Yee that the sample size of the more than 1,500 interviewers mentioned in the report is also relatively duplicated, which is not meaningful for statistical substitution.But for the calculation method of joint members, the above analysts believe that this may indeed be a problem that needs attention in iQiyi’s financial report.Because in general, the income of resetting joint members in the industry is directly calculated as the net value of the cost of income, and iQiyi ‘s processing method is to calculate the total income first, and then add part of the channel cost, which leads to iQiyi ‘sThe cost is also expanding.For profitable companies, the above two accounting methods are understandable, but for iQiyi, which is not yet profitable, this method will expand its income and may cause the market to make wrong judgments on the market value.In addition, Wolfpack Research believes that iQiyi is a mature company. It has been established for 10 consecutive years. Unlike the growth, iQIYI’s replacement is rapidly accelerating.In 2019, iQiyi has a potential of 10.3 billion, an increase of 1.2 billion from 2018.In fact, the estimated user growth in the fourth quarter was only zero.The lowest level of 7% in history, iQiyi’s advertising revenue fell by 15% in 2019, but the gross profit margin is still negative.On February 28, iQiyi released the financial report for the fourth quarter ended December 31, 2019 and the previously announced audit.According to the financial report data, iQiyi’s total revenue in fiscal 2019 reached 29 billion US dollars, an increase of 16% in a year, of which revenue in the fourth quarter was 7.5 billion US dollars, a year-on-year increase of 7%, exceeding company expectations.The data shows that despite the recent sharp declines in both the Nasdaq and China stocks, iQiyi has still brought investors a return of more than 30% in the past three months.CITIC Securities said that although it suffered from short-term pressure in the second quarter due to the external environment and the uncertainty of some content scheduling, iQiyi leads the industry in the field of original content.It is understood that Wolfpack Research is a global financial research and due diligence company dedicated to protecting investors by ensuring the balance of the financial ecosystem.The Wolfpike Research Company of Syria published a short-selling headline report on December 10, 2019, alleging fraud.Sauna, Ye Wang Bai Jinlei editor Zhao Ze proofreading Li Ming