Shares of iQiyi Inc. (NASDAQ: IQ) skyrocketed 26.88% in Monday's pre-market trading session, as the Chinese streaming giant rode a wave of positive news and market sentiment. The dramatic surge was fueled by the explosive success of its new drama series and reports of potential regulatory easing in China's content production industry.

iQiyi's latest offering, "Sheng Wan Wu," which premiered on August 13, has become an instant hit across both streaming and traditional broadcast platforms. The series topped multiple rankings on third-party data platforms, including Kuyun, Dengta, and Maoyan. According to Kuyun Entertainment data, "Sheng Wan Wu" recorded an impressive 57.24 million total platform views on its premiere day, followed by 77.42 million views on the second day. The show's success extended to traditional television, consistently achieving peak real-time ratings above 3.0 on CCTV-8 for consecutive days.

Adding to the positive momentum, reports have emerged suggesting a potential easing of restrictions on local drama production in China. This regulatory shift, if implemented, could significantly benefit content producers and long-form video platforms like iQiyi. Investors appear to be betting on iQiyi's ability to capitalize on a more favorable regulatory environment, potentially leading to an expanded content pipeline and improved business outlook. The stock's dramatic rise also aligns with a broader trend of Chinese ADRs gaining ground in pre-market trading, reflecting growing investor confidence in the Chinese market amidst easing trade tensions with the US.