Investment Rating - The report maintains an "Overweight" rating for the internet media industry, indicating a positive outlook for the sector's performance relative to the overall market [2]. Core Insights - The report highlights four key growth drivers for the gaming sector: 1. Demand from younger generations (post-90s and post-00s) and overseas markets, with AI potentially creating new gameplay experiences. 2. Companies that have focused on project development and improved their R&D capabilities over the past five years are now better positioned to create high-quality products. 3. Competition in gaming is shifting towards differentiation rather than price competition. 4. Despite product cycles, improvements in industrial processes can lead to sustained growth [2]. Summary by Sections Gaming Sector - The report identifies several companies with promising new products that could drive mid-term growth, including: - Giant Network's "Supernatural Action" and Century Huatong's "Whiteout Survival" and "Kingshot" [2]. - Companies like 37 Interactive Entertainment and Kying Network are noted for their strong new game reserves and AI strategies [2]. AI Applications - The report emphasizes the commercial potential of AI applications, citing successful products like Kuaishou's AI video tools and Meitu's consumer-focused AI offerings [2]. - AI's impact on advertising revenue for companies like Tencent and Bilibili is highlighted as an area of growth [2]. Entertainment and Consumer Trends - The report recommends companies involved in trendy consumer products, music, and live events, such as Pop Mart and NetEase Cloud Music, which are benefiting from increased engagement from younger audiences [2]. - The integration of media networks with platforms like Alipay is expected to enhance the value of companies like Focus Media [2]. Valuation Metrics - A detailed valuation table is provided, showing projected revenues and profits for key companies in the gaming and entertainment sectors, with Tencent's market cap at 41,505 million RMB and a projected PE ratio of 16 for 2025 [4].

Investment Rating - The industry maintains a "Recommended" rating, indicating a positive outlook for the gaming sector with expectations of outperforming the benchmark index [4]. Core Insights - In June 2025, the National Press and Publication Administration approved 147 domestic game licenses and 11 imported game licenses, showing a significant increase compared to the same period in 2024, which is expected to boost market confidence in the gaming industry [4]. - Key games approved include titles from major companies such as Tencent, NetEase, and Giant Network, which are anticipated to contribute positively to their financial performance [4]. - The report highlights the strong performance of several companies, including Tencent's long-standing games, Giant Network's new releases, and the proactive measures taken by companies like Kaiying Network in AI gaming [4]. Company Summaries - **Kaiying Network**: Market cap of 37.5 billion, with a 2025 EPS forecast of 0.98 and a strong recommendation rating [2]. - **Giant Network**: Market cap of 41.4 billion, with a 2025 EPS forecast of 0.84 and a strong recommendation rating [2]. - **Yaoji Technology**: Market cap of 11.2 billion, with a 2025 EPS forecast of 1.79 and a strong recommendation rating [2]. - **Shenzhou Taiyue**: Market cap of 22.1 billion, with a 2025 EPS forecast of 0.65 and a strong recommendation rating [2]. - **G-bits**: Market cap of 19.8 billion, with a 2025 EPS forecast of 14.80 and a strong recommendation rating [2]. Industry Scale - The gaming industry consists of 161 listed companies, with a total market capitalization of 1,740.9 billion and a circulating market capitalization of 1,580.9 billion [2]. Industry Index Performance - The absolute performance of the industry over the last 12 months is 42.6%, indicating strong growth [3]. - Relative performance metrics show positive trends, with expectations of continued growth in the coming months [3]. Related Reports - The report references several related analyses that discuss ongoing trends and performance in the gaming sector, highlighting the continuous improvement in revenue and the emergence of new gaming titles [3].

Group 1: Market Performance - On June 30, the gaming sector saw significant gains, leading the A-share market, with Xunyou Technology rising over 13%, and Kyeing Network, Gigabit, and Giant Network hitting the daily limit with a 10% increase [1][2] - Other companies such as Ice Glacier Network, 37 Interactive Entertainment, Star Shine Entertainment, and Perfect World also experienced gains exceeding 5% [1] Group 2: Industry Data - According to Gamma Data's report, the Chinese gaming market reached a scale of 28.051 billion yuan in May, marking a year-on-year growth of 9.86% and a month-on-month increase of 2.56% [4] - The client game market in China was valued at 5.819 billion yuan, with a year-on-year growth of 1.58% and a month-on-month growth of 0.34% [4] - The actual sales revenue of domestically developed games in overseas markets was $1.577 billion, reflecting a year-on-year increase of 6.93% and a month-on-month increase of 1.50% [4] Group 3: Regulatory Environment - The National Press and Publication Administration approved 158 new games in June, including 147 domestic and 11 imported games, setting a record for the highest number of new approvals in a single month this year [4] - As of now, a total of 812 game licenses have been issued in 2025, with domestic online game licenses consistently exceeding 110 per month [4] Group 4: Policy Support - Various local policies continue to support the international expansion of gaming companies, with Zhejiang Province's recent measures aimed at fostering the overseas gaming market [4] - Beijing's support measures for the gaming and esports industry include 11 specific initiatives to promote high-quality development, offering up to 30 million yuan in rewards for companies enhancing R&D efficiency through technological upgrades [5] - Guangzhou's Nansha District has also introduced support measures for the gaming and micro-drama industries [5]

Core Insights - The report emphasizes the importance of AI and the overall positive sentiment in the media industry, highlighting the need to focus on certainty assets and optimistic outlooks for 2025 [2][3]. Game Industry - The game industry has shown significant growth, with a year-on-year increase in revenue of 17% in the first five months of 2025, totaling 1411.06 billion yuan [30]. - Mobile games have particularly thrived, generating 1052.28 billion yuan, reflecting a 20% increase year-on-year [30]. - The report suggests that the competitive landscape is easing, with major companies like Tencent and NetEase reducing their sales expenses significantly in Q1 2025, indicating a potential for improved profitability [32][39]. IP Derivatives - The domestic IP derivatives market is rapidly growing, driven by structural opportunities from consumer transitions, with companies like Pop Mart expanding successfully in international markets [7][30]. - The report highlights the differentiated competition among leading players in various segments of the IP derivatives market [30]. Publishing - The publishing sector is advised to focus on high-dividend and certainty assets, with recommendations for companies that show strong cash dividend capabilities or potential changes in AI/IP business margins [7][30]. Advertising and Marketing - The advertising sector is witnessing resilience in offline media, particularly with companies like Focus Media, which is expected to see improved profitability due to a better competitive landscape [7][30]. - The report notes that AI is likely to enhance the performance of marketing companies, with a focus on basic fundamentals improving as the macro environment stabilizes [7][30]. Film and Television - The film industry is currently facing challenges with a lack of major new releases post-Spring Festival, leading to a low box office outlook for the summer season [7][30]. - There are potential opportunities for bottom-fishing in stocks with favorable odds for summer releases, with recommendations for companies like Maoyan Entertainment and Wanda Film [7][30]. Education - The education sector is experiencing heightened demand for quality training, particularly in K12 education, with a focus on major training institutions that are expected to see high revenue growth [7][30]. - The report mentions the competitive landscape in the public examination sector, where leading companies are maintaining strategic focus and delivering quality products [7][30]. Valuation and Financial Analysis - The report provides a detailed valuation analysis of key companies in the media sector, with recommendations for stocks like Mango Excellent Media and Wanda Film, indicating their potential for growth based on current and projected earnings [8][30].

Group 1 - The China Securities Media Index (399971) has seen a strong increase of 2.34%, with notable gains from stocks such as Kyeing Network (002517) up 10.03%, Giant Network (002558) up 9.39%, and G-bits (603444) up 6.19% [1] - The Media ETF (159805) rose by 2.48%, with the latest price reported at 1.2 yuan [1] - In May, the total revenue of the Chinese gaming market reached 28.051 billion yuan, indicating a clear positive trend in the industry fundamentals [1] Group 2 - The China Securities Media Index tracks 50 large-cap listed companies from sectors including marketing and advertising, cultural entertainment, and digital media [2] - As of May 30, 2025, the top ten weighted stocks in the index accounted for 48.11% of the total index, with companies like Focus Media (002027) and Giant Network (002558) among the leaders [2]

A股游戏股盘中震荡走高，恺英网络封涨停，巨人网络、迅游科技、冰川网络、三七互娱、吉比特均涨 逾4%。 ...

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Viewpoints - The report emphasizes the potential of AI applications in video understanding and generation, particularly through the launch of Kwai Keye-VL by Kuaishou, which showcases advanced multimodal capabilities [5] - The report suggests continued investment in the gaming sector, particularly with the recent approval of numerous domestic game licenses, indicating a favorable environment for new game launches [6] - The upcoming summer season is expected to boost consumption in various IP sectors, including games, animated films, concerts, and trendy toys, with specific recommendations for companies in these areas [6] Summary by Sections Industry Data Overview - "Delta Action" ranked first in the iOS free chart, while "Honor of Kings" topped the iOS revenue chart as of June 28, 2025 [13][17] - The film "Sauce Garden Case" achieved the highest box office for the week, grossing 1.64 billion [28] Industry News Overview - AI advancements in embodied intelligence and brain-computer interfaces are highlighted, with ongoing releases in gaming and film sectors [35] - The report notes the launch of Gemini, the first model capable of running locally on robots, enhancing task adaptability and efficiency [35] Company Recommendations - For AI video applications, key recommendations include Kuaishou-W, Shanghai Film, and Tencent Holdings, with beneficiaries like Alibaba-W and Kunlun Wanwei [5] - In the gaming sector, companies such as Xindong Company, Giant Network, and Perfect World are recommended, with beneficiaries including Youyi Time and Kingsoft [6] - For animated films, Shanghai Film is highlighted, while beneficiaries include Zhongwen Online [6] - In the concert and performance sector, Fengshang Culture is recommended, with beneficiaries like Alibaba Pictures and Maoyan Entertainment [6] - The trendy toy sector recommends Blukoo and Aofei Entertainment, with beneficiaries including Pop Mart and Quantum Song [6]

Group 1 - The game "Dragon City" by Century Huatong has risen to the 4th position in the sales ranking, while "Treasure Hunter" by Thunder Game has reached the 7th position [1][4][9] - "Dragon City" is currently the highest-ranked legendary game on the WeChat mini-game sales list, indicating a potential collaboration between leading mini-game manufacturers and legendary game developers to create a top-tier product [7][9] - The mini-game market has seen a slight increase in new entries, with 1 new product entering the top 50 and 11 new products entering the bottom 50 compared to the previous week [5][6] Group 2 - "Treasure Hunter" incorporates various mini-game elements and has been steadily rising in the rankings since its debut, suggesting a strategy to recapture users from previous titles [9][4] - The top ten mini-games include "Dragon City," "Treasure Hunter," and others, reflecting a competitive landscape in the mini-game sector [2][3] - The collaboration between Century Huatong and other game developers may signal a trend towards creating blockbuster legendary games on mini-game platforms [7][9]

Investment Rating - The report maintains a positive outlook on the industry, particularly on consumer sectors supported by fundamentals, indicating an "Overweight" rating for the internet media sector [3][4]. Core Insights - The report emphasizes the importance of focusing on core targets with fundamental support amidst market fluctuations in new consumption trends. Key companies highlighted include Pop Mart, NetEase Cloud Music, and various gaming companies [4]. - The gaming sector is approaching a price-to-earnings ratio of 20x for 2025, with market sentiment divided on sustainability. The report suggests that the rebound in the gaming sector is based on policy easing and better-than-expected performance [4]. - AI applications are noted for their rapid commercialization, with companies like Meitu and Kuaishou showing promising results in this area [4]. - The report also discusses the resilience of advertising companies like Focus Media, which is expected to maintain high dividend ratios despite market concerns [4]. Summary by Sections Consumer Sector - Pop Mart's recent product restocking has led to a temporary decline in second-hand market prices but is expected to enhance brand image and core customer loyalty. The company is expanding its product categories with the opening of its first global store in Shanghai [4]. - NetEase Cloud Music continues to see growth in paid users, particularly among the younger demographic, indicating a strong market position and pricing power [4]. Gaming Sector - Companies like Giant Network and ST Huatuo are highlighted for their innovative game releases and revenue growth, with specific titles expected to drive future performance [4]. - The report notes that the gaming sector's growth is supported by new product launches and improved profit margins [4]. AI Applications - The report identifies significant growth in AI applications, particularly in programming and creative tools, with Cursor's annual recurring revenue exceeding $500 million [4]. - Kuaishou and Meitu are recognized for their successful monetization strategies in AI, with Kuaishou's monthly revenue surpassing 100 million RMB [4]. Advertising Sector - Focus Media is expected to benefit from its high dividend yield and plans for strategic acquisitions to improve market positioning [4].

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Views - The gaming industry is entering a recovery phase, with a 9.9% year-on-year growth in the Chinese gaming market as of May 2025, driven by new game releases and upcoming summer titles [5] - AI applications are accelerating in various sectors, including content creation, entertainment, education, and e-commerce, with significant advancements in AI models and tools [4][5] - The report emphasizes the importance of focusing on mid-year performance and new content releases to capitalize on emerging consumer trends in IP [5] Summary by Sections Industry Data Overview - "Delta Action" ranked first in the iOS free chart, while "Honor of Kings" topped the iOS revenue chart as of June 21, 2025 [12][16] - The film "Sauce Garden Case" achieved a weekly box office of 1.37 billion [28] AI Evolution Driving Industry Change - Multiple large AI models have been released or upgraded, enhancing capabilities in various applications [35] - The introduction of the MiniMax-M1 model signifies a shift towards efficient, low-cost AI solutions with strong reasoning capabilities [38] Gaming Sector Insights - The mobile gaming market saw a 12.0% year-on-year growth, with self-developed games generating overseas revenue increasing by 6.9% [5] - New game launches and summer releases are expected to boost the gaming sector's performance in Q2 and Q3 [5] Recommendations for Investment - Key recommendations include Tencent Holdings and Kuaishou-W for large models/agents, with Alibaba-W and SenseTime-W as beneficiaries [4] - The report suggests focusing on mid-year earnings and new content to drive investment in IP new consumption sectors, including gaming, short dramas, films, and trendy toys [5]