Industry Overview - The gaming industry continues to show a growth trend, with significant performance from leading companies. In Q3 2025, industry revenue reached 30.362 billion yuan, representing a year-on-year increase of 28.6% and a quarter-on-quarter increase of 9.48%. The industry's profit also saw a substantial year-on-year growth of 112%, reaching 5.777 billion yuan, with a profit margin of 19% [1][2]. Key Companies Performance - Leading companies such as ST Huatuo, Sanqi Interactive, Giant Network, Kaiying Network, and G-bits reported quarterly net profits exceeding 500 million yuan, all demonstrating growth rates above 35% [1][2]. - Kaiying Network achieved a net profit of 630 million yuan in Q3 2025, marking a record high for a single quarter and a year-on-year increase of 34.5%. The company's gross profit margin improved to 84.2%, indicating a higher proportion of high-margin business [3]. - Giant Network reported a revenue of 2.15 billion yuan in Q3 2025, a 101.5% increase from Q2 2025, driven by the performance of its key product "Supernatural Action Group" [3]. - G-bits recorded a net profit of 569 million yuan in a single quarter, a remarkable year-on-year increase of 307.7%. The game "Staff Sword Legend" generated a total revenue of 1.166 billion yuan in the first three quarters of 2025 [4]. - ST Huatuo's successful overseas product "Whiteout Survival" has shown stable performance in both domestic and international markets, while its new product "Kingshot" has validated the feasibility of the "casual + SLG" model [4]. Market Dynamics - The issuance of game licenses has stabilized, with a record number of domestic licenses issued in 2025, totaling 1,354, surpassing the entire year of 2024 [2]. - The actual sales revenue of the Chinese gaming market from January to September 2025 increased by 7.11% year-on-year, with a continuous quarter-on-quarter growth, driven by excellent product performance [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][12] Core Insights - The company's Q3 performance fell within the upper range of its forecast, with a significant year-on-year net profit growth of 307.70% driven by new game releases [7] - The company is focusing on the global launch of its self-developed products, with new regions for "Wanjian Changsheng" and "Zhangjian Chuanqi" expected to contribute to profit growth in 2025 and 2026 [11] - The company has a robust product pipeline, with anticipated revenue growth and profitability improvements due to new product launches and existing product performance [11] Financial Performance Summary - For the first three quarters of 2025, the company achieved a total revenue of 44.86 billion yuan, representing a year-on-year increase of 59.17%, and a net profit of 12.14 billion yuan, up 84.66% [8] - In Q3 2025, the company reported a revenue of 19.68 billion yuan, a year-on-year increase of 129.19%, and a net profit of 5.69 billion yuan, reflecting a year-on-year growth of 307.70% [8] - The company plans to distribute a cash dividend of 6 yuan per share, totaling 4.31 billion yuan, which accounts for 75.67% of the net profit for the period [8] Future Projections - The company is projected to achieve revenues of 61.87 billion yuan in 2025, 68.05 billion yuan in 2026, and 72.14 billion yuan in 2027, with corresponding net profits of 16.95 billion yuan, 20.28 billion yuan, and 22.87 billion yuan [11][12] - The expected growth rates for revenue and net profit are 67% and 79% respectively for 2025, with a gradual decline in growth rates in subsequent years [10][11]

Investment Rating - The report indicates a positive investment outlook for the gaming sector, highlighting its strong performance compared to other sub-industries within the media sector [3][4]. Core Insights - The A-share media sector reported an 8.2% year-on-year revenue growth and a 59.8% increase in net profit attributable to shareholders in Q3 2025, with significant differentiation among sub-industries [3][4]. - The gaming industry showed remarkable growth, with a 28.6% year-on-year revenue increase, marking six consecutive quarters of accelerating revenue growth and achieving a profit margin of 19.0%, the highest quarterly level since 2022 [3][4]. - The external environment for gaming continues to improve, with an increase in the average monthly number of domestic game approvals and relaxed third-party payment policies from platforms like Google and Apple, which are expected to enhance channel cost efficiency [3][6][10]. - The advertising sector, particularly focusing on Focus Media, has seen substantial growth in internet advertising spending, leading to improved profit margins and a return to historical highs in gross margins [3][4]. - The publishing sector has shown mixed results, with some state-owned publishing groups experiencing significant profit growth while others face challenges due to changes in educational material subscription methods [3][4]. Summary by Sections Gaming Sector - The gaming sector's revenue in Q3 2025 grew by 28.6% year-on-year, with a profit margin of 19.0%, the best performance since 2022 [3][4]. - Domestic PC game sales increased by 20% year-on-year, driven by titles like "Dream" and "Delta" [11]. - Key companies to watch include ST Huatuo, Giant Network, and Jiubite, which have shown significant growth [3][4][19]. Advertising Sector - Focus Media has optimized its cost structure, leading to a gross margin that has reached historical highs [3][4]. - Future observations will focus on the elasticity of internet advertising spending and the impact of new partnerships and acquisitions [3][4]. Publishing Sector - The performance of state-owned publishing groups varies, with some recovering from previous declines while others continue to face challenges [3][4]. - The overall trend indicates a need for adaptation to changing market conditions and consumer demands [3][4]. Long Video Sector - Mango TV is at a critical juncture, with expectations for operational improvements as policy support strengthens [3][4]. - The focus will be on innovative IP operations and product cycles in the coming years [3][4].

Core Viewpoint - G-bits has seen a significant increase in stock price this year, with a year-to-date rise of 121.05%, despite recent declines in the last five and twenty trading days [1] Group 1: Stock Performance - As of November 5, G-bits' stock price reached 461.50 CNY per share, with a trading volume of 688 million CNY and a turnover rate of 2.10%, resulting in a total market capitalization of 33.247 billion CNY [1] - The stock has experienced a decline of 8.42% over the last five trading days and 18.75% over the last twenty trading days, while it has increased by 26.85% over the last sixty days [1] Group 2: Financial Performance - For the period from January to September 2025, G-bits reported a revenue of 4.486 billion CNY, representing a year-on-year growth of 59.17%, and a net profit attributable to shareholders of 1.214 billion CNY, which is an increase of 84.66% year-on-year [1] Group 3: Shareholder Information - As of September 30, 2025, the number of G-bits shareholders was 16,500, a decrease of 8.04% from the previous period, with an average of 4,368 circulating shares per person, which is an increase of 8.74% [1] - G-bits has distributed a total of 6.489 billion CNY in dividends since its A-share listing, with 2.918 billion CNY distributed over the past three years [2] Group 4: Institutional Holdings - As of September 30, 2025, the top ten circulating shareholders of G-bits include Hong Kong Central Clearing Limited as the third-largest shareholder with 6.9038 million shares, a decrease of 70,000 shares from the previous period [2] - The Huaxia CSI Animation Game ETF is the sixth-largest shareholder with 1.2456 million shares, an increase of 241,700 shares, while the China Europe Internet Mixed A fund has decreased its holdings by 338,600 shares [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [3][6]. Core Insights - The company reported a strong Q3 performance with total revenue of 1.97 billion yuan, a year-on-year increase of 129%, and a net profit attributable to shareholders of 570 million yuan, up 308% year-on-year, exceeding market expectations [6]. - The new game "杖剑" (Zhang Jian) has shown better-than-expected sustainability in both domestic and overseas markets, contributing significantly to revenue growth [6]. - The company has raised its earnings forecast based on the strong performance of new titles, projecting revenues of 6.27 billion yuan, 7.16 billion yuan, and 7.78 billion yuan for 2025, 2026, and 2027 respectively [6]. Financial Data and Profit Forecast - Total revenue (million yuan): - 2024: 3,696 - 2025E: 6,265 - 2026E: 7,156 - 2027E: 7,788 - Year-on-year growth rates (%): - 2025E: 69.5 - 2026E: 14.2 - 2027E: 8.8 - Net profit attributable to shareholders (million yuan): - 2025E: 1,779 - 2026E: 2,008 - 2027E: 2,310 - Gross margin (%): - 2025E: 93.4 - 2026E: 88.2 - 2027E: 89.9 - Return on equity (ROE %): - 2025E: 29.8 - 2026E: 30.2 - 2027E: 31.0 [2][6][8]. Market Data - Closing price (yuan): 452.01 - Market capitalization (million yuan): 32,563 - Dividend yield (%): 2.68 - Price-to-earnings ratio (PE): - 2026E: 16 - 2027E: 14 [3][6].

Market Overview - The gaming sector experienced a decline of 1.23% on November 4, with Jibite leading the drop [1] - The Shanghai Composite Index closed at 3960.19, down 0.41%, while the Shenzhen Component Index closed at 13175.22, down 1.71% [1] Individual Stock Performance - Notable gainers included: - 37 Interactive Entertainment (code: 002555) with a closing price of 23.44, up 2.58% [1] - ST Huaton (code: 002602) with a closing price of 18.67, up 1.19% [1] - Significant decliners included: - Jibite (code: 603444) with a closing price of 452.01, down 5.24% [2] - Kaiying Network (code: 002517) with a closing price of 23.90, down 3.55% [2] Capital Flow Analysis - The gaming sector saw a net outflow of 1.228 billion yuan from major funds, while retail investors contributed a net inflow of 827 million yuan [2][3] - Major funds showed a net inflow in stocks like Kaiying Network and Perfect World, while experiencing outflows in stocks like ST Kevin and Electric Soul Network [3] ETF Performance - The gaming ETF (code: 159869) tracking the China Animation and Gaming Index saw a decline of 3.05% over the past five days, with a net inflow of 150 million yuan [5] - The food and beverage ETF (code: 515170) had a slight increase of 0.34% over the past five days, with a net outflow of 577,800 yuan [5]

Core Insights - A total of 217 A-share listed companies have announced or implemented their third-quarter dividend plans as of November 3, with a total dividend amount of approximately 3.2 billion yuan from five listed companies in Hunan [1] Company Summaries - **吉比特 (Gigabit)**: The company has the highest cash dividend ratio, proposing a cash dividend of 60 yuan for every 10 shares. For the third quarter of 2025, it reported earnings per share of 16.85 yuan and a net profit of 121.41 million yuan, with a year-on-year growth rate of 84.66%. The company focuses on game development and operations, utilizing AI technology to enhance efficiency [1] - **五粮液 (Wuliangye)**: The company reported earnings per share of 5.54 yuan and a net profit of approximately 2.15 billion yuan, with a year-on-year decline of 13.72%. It aims to enhance brand value and market share, launching cocktails in Europe and sparkling wines in South Korea. The company plans to increase its dividend rate in line with stable growth [2] - **老百姓 (Laobaixing)**: The company achieved third-quarter revenue of 5.296 billion yuan, a slight increase of 0.07% year-on-year, and a net profit of 1.31 billion yuan, up 2.62%. It plans to distribute a cash dividend of 0.14 yuan per share, totaling 1.06 billion yuan [3] - **克明食品 (Keming Food)**: The company reported a net profit of approximately 123.71 million yuan for the first three quarters of 2025, while the parent company recorded a net loss of about 18.08 million yuan. It proposes a cash dividend of 1.5 yuan per 10 shares, totaling around 50 million yuan [3] - **盐津铺子 (Yanjinpuzi)**: The company reported a net profit of approximately 604.61 million yuan for the first three quarters, with a proposed cash dividend of 4 yuan per 10 shares, totaling about 109.11 million yuan [3] - **和顺石油 (Heshun Petroleum)**: The company achieved a net profit of approximately 21.81 million yuan for the first three quarters and plans to distribute a cash dividend of 0.1 yuan per share, totaling about 17.19 million yuan [4]

Core Insights - A-share companies have disclosed their Q3 2025 reports, with 5437 companies reporting, and 89 companies achieving revenue exceeding 100 billion yuan [1] Revenue Performance - The highest revenue companies include: - China Petroleum: 21692.6 million yuan, down 3.92% year-on-year - China Sinopec: 21134.4 million yuan, down 10.69% year-on-year - China Construction: 15582.2 million yuan, down 4.20% year-on-year [3] - The lowest revenue companies include: - Kang Le Wei Shi: 127.6 thousand yuan - Shou Yao Holdings-U: 200.0 thousand yuan [3] Profitability Analysis - Over 50% of companies reported positive net profit growth, with Industrial and Commercial Bank of China being the "profit king" with a net profit exceeding 269.9 billion yuan [6] - The highest net profit companies include: - Industrial and Commercial Bank of China: 2699.1 million yuan, up 0.33% year-on-year - China Construction Bank: 2573.6 million yuan, up 0.62% year-on-year [8] - The largest net profit declines were seen in: - Vanke A: -280.2 million yuan, down 56.14% year-on-year - ST Jinke: -107.8 million yuan, down 102.12% year-on-year [8] Sector Performance - The steel and non-ferrous metals industries showed significant recovery, with the steel industry net profit increasing nearly 750% year-on-year [10] Dividend Trends - There is an increase in dividend announcements, with 218 companies disclosing dividend plans totaling 46.6 billion yuan [14] - The largest dividend payouts include: - Wuliangye: 100.1 million yuan - Gree Electric: 55.9 million yuan [17]

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 602.00 CNY, while the current price is 472.98 CNY [6][19]. Core Insights - The company's products such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" have shown outstanding performance and sustainability, expected to continue contributing to revenue in 2026. The expansion of "Zhang Jian" and "Wen Jian" in overseas markets, along with the launch of "Jiu Mu Zhi Ye," will further drive growth [2][11]. - The third quarter results are at the upper end of forecasts, with a cash dividend of 6 CNY per share announced. For the first three quarters of 2025, the net profit attributable to the parent company reached 1.214 billion CNY, a year-on-year increase of 84.66%, with a single-quarter net profit of 569 million CNY, up 307.7% [11][12]. Financial Summary - Total revenue is projected to increase from 4,185 million CNY in 2023 to 9,257 million CNY in 2027, reflecting a compound annual growth rate (CAGR) of approximately 29.5% [4][12]. - Net profit attributable to the parent company is expected to rise from 1,125 million CNY in 2023 to 2,476 million CNY in 2027, indicating a CAGR of about 30.5% [4][12]. - Earnings per share (EPS) are forecasted to grow from 15.62 CNY in 2023 to 34.36 CNY in 2027 [4][12]. Product Performance - "Zhang Jian Chuan Shuo" generated a total revenue of 1.166 billion CNY in the mainland market for the first three quarters, maintaining a position within the top 40 of the iOS game sales chart. "Dao You Lai Wa Bao," launched in May, has contributed 316 million CNY by the end of September [11][12]. - The overseas revenue for the first nine months reached 588 million CNY, a year-on-year increase of 59.46%, with "Zhang Jian Chuan Shuo (Overseas Version)" contributing 478 million CNY since its launch on July 15, 2025 [11][12]. Future Expectations - Anticipation for the launch of "Wen Jian Chang Sheng" and "Zhang Jian Chuan Shuo" in overseas markets, as well as the strategic reserve of the SLG mobile game "Jiu Mu Zhi Ye," which is expected to contribute to 2026's performance [11][12].

Core Insights - The company's products such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" have shown strong performance and sustainability, expected to continue contributing to revenue in 2026 [1] - The company maintains an "Overweight" rating due to the promising performance of new products and an upward revision of EPS forecasts for 2025-2027 [2] Financial Performance - For the first three quarters of 2025, the company's net profit attributable to shareholders reached 1.214 billion yuan, a year-on-year increase of 84.66%, with a single-quarter net profit of 569 million yuan, up 307.7% [2] - Total revenue for the first three quarters was 4.486 billion yuan, reflecting a year-on-year growth of 59.17%, with a single-quarter revenue of 1.968 billion yuan, up 129.19% [2] - The company announced a cash dividend of 6 yuan per share, with total dividends amounting to 904 million yuan for the first three quarters of 2025 [2] Product Performance - "Zhang Jian Chuan Shuo" generated a total revenue of 1.166 billion yuan in the mainland for the first three quarters, maintaining a position in the top 40 of the iOS game sales chart [3] - "Dao You Lai Wa Bao," launched in May, has generated 316 million yuan in revenue by the end of September, contributing positively to the company's performance [3] - The company's overseas revenue for the first nine months reached 588 million yuan, a year-on-year increase of 59.46%, with "Zhang Jian Chuan Shuo (Overseas Version)" contributing 478 million yuan since its launch [3] Future Outlook - Upcoming product launches such as "Wen Jian Chang Sheng" and the overseas release of "Zhang Jian Chuan Shuo" are anticipated to further drive growth [3] - The company is preparing to launch the SLG mobile game "Jiu Mu Zhi Ye," which is expected to contribute to 2026 performance, with offline trials already commenced [3]