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  "docId": "019dd923-622c-750b-8b9a-539b4b45e826",
  "docSlug": "9fb9cb7289b2",
  "documentTitle": "iQIYI, Inc. (IQ)",
  "authorId": "60_Wolfpack_Research",
  "authorName": "Wolfpack Research",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-04-07 00:00:00",
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  "density": "dense",
  "nDataPoints": 32,
  "notes": "The slide uses a 'fraud-exposure' framework to highlight discrepancies in financial reporting.",
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  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "This chart strongly suggests that management is lying about its purported growing average subscription period, steady ARPU, growing number of paying subscribers, or all three.",
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      "kind": "chart",
      "text": "iQIYI Deferred Revenue to Realized Revenue",
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      "kind": "chart",
      "text": "VIP Memberships vs Deferred Revenues",
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      "kind": "metric",
      "text": "deferred revenue: 17%",
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      "kind": "paragraph",
      "text": "IQ's deferred revenues declined from RMB 2,356.3 million at the end of 3Q18 to RMB 1,960.7 million at the end of 1Q19, a 17% decline during that 6-month period. This directly contradicts management's claims of growth in the number of paying subscribers and the average subscription period – it is mathematically impossible for both of those statements to be true given the corresponding decline in deferred revenues.",
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      "kind": "paragraph",
      "text": "Because IQ's management claimed it added 16.1 million net paying subscribers and that the average subscription period had increased from about 6 months to 8 months between 3Q18 and 1Q19, we expected to find significant growth in deferred revenue as the prepayments accumulated. However, we found the opposite. The chart below shows IQ's reported paying subscribers compared to its reported deferred revenue balance:",
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