IQ: Easing Content Production Rules Could Further Improve Visibility on LF Video
What’s New: Shares of IQ have been up 36% since Aug 18 when the National Radio and Television Administration (NRTA) held a meeting to communicate measures to improve drama content production rules and promote sustainability of the long-form video content industry. While financial impact remains limited in the near term, longer-term implications including shortening of content production cycle could strengthen content supply – benefitting the recovery of membership and ads segment. The shortened production cycle could also strengthen the company’s cash flow – freeing up more capital to repay part of its debt obligations and fund other new initiatives including micro drama.We up our PT from US$2.60 to US$3.20 partly due to a favorable regulatory environment. Our updated PT of US$3.20 implies 1.1x FY26E EV/Revs. We maintain our BUY rating.
Analysts:
Jin Yoon
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