Video streaming website iQiyi posted its first-quarter profits on Friday, owing to booming paid-user bases and high-quality programs.
The Nasdaq-listed company's net profit is 169.1 million yuan (US$26.7 million), compared to a loss of 1.3 billion yuan in the same period in 2021. It was the first profitable quarter for iQiyi, founded 12 years ago.
The company's gross margin consistently expanded in the last three quarters and reached "a historical high" in the first quarter, with improving operational efficiency, said iQiyi officials.
The series "A Lifelong Journey" gained widespread appreciation from reviewers and audiences when it aired on iQiyi. The website posted its first profitability in the 12-year company history.
The revenue in the quarter was 7.3 billion yuan, a nine percent decrease from a year ago.
In the quarter, its paid-member base reached 101 million, contributing to revenue of 4.5 billion yuan, a four percent increase from a year ago.
Early in May, JP Morgan analysts rated iQiyi shares "Buy" and lifted the company's share price target to US$8 from US$2, as it aims to improve profitability rather than undertake business expansion, according to JP Morgan analyst Alex Yao.
The coronavirus pandemic has fueled online video demands, as people spend more time on digital entertainment platforms when they stay at home.
This quarter, the series "A Lifelong Journey" has been widely lauded on iQiyi, among the top three highest-rated programs in the company's history, according to iQiyi.