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Summary of iQIYI, Inc. ROADSHOW Presentation (March 2018)

Core Content

This ROADSHOW presentation outlines iQIYI, Inc.'s Initial Public Offering (IPO), business model, growth strategies, and financial performance. The presentation emphasizes the company's leadership in the Chinese internet streaming market, its innovative content and advertising strategies, and its strong corporate culture and management team.

Offering Summary

• Issuer: iQIYI, Inc.
• Listing / Ticker: NASDAQ / IQ
• Offering Type: Initial Public Offering
• Shares Offered: 125 MM ADSs / 875 MM Class A shares (100% primary offering)
• Over-Allotment: 15%
• Filing Range: $17.00 – $19.00 per ADS
• Expected Pricing: Week of March 26, 2018
• Use of Proceeds: Content acquisition and production, research and development, working capital and other general corporate purposes

Each ADS represents 7 Class A ordinary shares.

Business Model

iQIYI's business model is based on the ability to monetize one IP in multiple ways. The company offers:

• PPC (Professionally Produced Content): Original and licensed premium content
• PGC (Partner Generated Content): Revenue-sharing mechanism through iQIYI Partner Accounts
• UGC (User Generated Content): Free uploads by users

The company has a robust content ecosystem, with over 533 content providers in China and more than 1,300 internet films distributed.

User Base and Engagement

• Total Mobile App MAUs: ~421M
• Total Mobile App DAUs: ~126M
• Total PC MAUs: ~424M
• Total PC DAUs: ~54M
• Average Daily Time Spent Per User: ~1.7 hours
• Total User Time Spent: ~9.2B hours

iQIYI is one of the largest mobile applications in China, with a strong user base and high engagement. The company's social engagement features, such as iQIYI Paopao, enhance user stickiness by allowing users to interact with content through feeds, group chats, and comments.

Content and Production Capabilities

• Content Selection and Production: Powered by AI and big data, enabling precise forecasting of video views and box office performance with over 80% accuracy.
• Production Scale: Utilizes up to 100+ cameras simultaneously and 200+ professionals in post-editing.
• Notable Content: iQIYI has pioneered the delivery of blockbuster content, including "The Rap of China," which generated significant national attention.

Advertising and Monetization

• Advertising Solutions: Includes pre-video, pop-up, in-feed, and content-integrated ads.
• Innovative Ad Formats: Examples include "Brand Day" and "Soft-Product Placement."
• Monetization Channels: Membership services, content distribution, online games, paid reading, online advertising, AD virtual tipping, IP licensing, and e-commerce.

Financial Highlights

• Revenue Growth: Rapid and diversified, with significant year-on-year growth.
• Cost of Revenues: As a percentage of total revenue, it has declined from 2015 to 2017 due to efficiency improvements in bandwidth and other costs.
• Operating Expenses: As a percentage of total revenue, the company has managed to reduce expenses through strong operating leverage, leading to improved margins.

Growth Strategies

• Original Content: Focus on recruiting top talent, systematically producing original content, and strengthening relationships with upstream industry participants.
• Technological Innovations: Utilize AI and big data for content production, entertainment experience, content recommendation, and service to advertisers and content partners.
• Content Offering Ecosystem: Expand long-tail content, especially popular among young users, and develop new media formats.
• Userbase: Increase attractiveness to different age groups and provide personalized experiences.
• Monetization: Enhance paying user penetration, develop a multi-layer paying user system, and expand in-feed advertising and other monetization channels.

Management Team

The company is led by a visionary and persevering management team, including:

• Dr. Yu GONG: Founder & CEO
• Xiaodong WANG: CFO
• Dr. Xiaohui WANG: Chief Content Officer
• Dr. Xing TANG: CTO
• Xiangjun WANG: CMO
• Xianghua YANG: Senior Vice President
• Youqiao DUAN: Senior Vice President

Corporate Culture

iQIYI has a unique corporate culture that integrates the DNA of engineers and creatives, fostering innovation and creativity in its operations.

Legal and Confidentiality Disclaimer

• The presentation is confidential and not to be disclosed to third parties.
• It does not constitute a prospectus and is qualified in its entirety by reference to the detailed information in the prospectus.
• Forward-looking statements are made based on current information and are subject to risks and uncertainties.