Core Viewpoint - The stock of 贪玩 (09890) has seen a significant increase, rising over 7% in the afternoon trading session, with a current price of 15.17 HKD and a trading volume of 75.5 million HKD [1] Company Actions - 贪玩 announced a share buyback of 228,200 shares on October 20, totaling 3.1305 million HKD [1] - Since October 14, 贪玩 has conducted share buybacks for five consecutive days [1] - Year-to-date, 贪玩 has completed 30 buyback transactions, acquiring a total of 7.3672 million shares for a cumulative amount of 10.2 million HKD [1] Business Developments - In August, 中旭未来, the parent company of 贪玩, deepened its business cooperation with 杭州天穹互动网络科技有限公司, securing licenses for the classic IPs 《热血传奇》 and 《传奇世界》 [1] - 贪玩 has signed a cooperation agreement with 浙江闲趣互娱网络科技有限公司, a subsidiary of 恺英网络, to officially enter the gaming box section operated by 恺英网络 [1] - This collaboration represents an extension of the long-term partnership between 中旭未来 (贪玩) and 恺英网络, marking a comprehensive upgrade of the legendary IP ecosystem [1]

Market Overview - The gaming sector increased by 2.84% on October 21, with Youzu Interactive leading the gains [1] - The Shanghai Composite Index closed at 3916.33, up 1.36%, while the Shenzhen Component Index closed at 13077.32, up 2.06% [1] Individual Stock Performance - Youzu Interactive (002174) closed at 12.41, up 6.43%, with a trading volume of 953,200 shares and a turnover of 1.17 billion [1] - ST Huaton (002602) closed at 18.19, up 5.02%, with a trading volume of 1,414,900 shares and a turnover of 2.54 billion [1] - Giant Network (002558) closed at 40.10, up 4.02%, with a trading volume of 420,600 shares and a turnover of 1.66 billion [1] - Other notable performers include Kying Network (002517) up 4.00%, WenTou Holdings (600715) up 3.63%, and Jibite (603444) up 2.58% [1] Capital Flow Analysis - The gaming sector saw a net inflow of 965 million from institutional investors, while retail investors experienced a net outflow of 739 million [2] - Major stocks with significant net inflows include ST Huaton with 487 million and Giant Network with 135 million [3] - Conversely, Youzu Interactive experienced a net outflow of 645 million from retail investors [3]

Group 1 - OpenAI has tightened regulations on its AI video generation application Sora to prevent deepfake content, collaborating with actor Bryan Cranston and the SAG-AFTRA union [1] - As of October 20, 2025, the CSI Online Consumption Theme Index (931481) rose by 1.47%, with notable increases in stocks such as Bilibili-W (6.88%) and Kuaishou-W (3.04%) [1] - The CSI Online Consumption ETF (159793) increased by 1.60%, reaching a latest price of 1.08 yuan, and has seen a cumulative rise of 10.95% over the past three months [1] Group 2 - As of September 30, 2025, the top ten weighted stocks in the CSI Online Consumption Theme Index accounted for 55.76% of the index, including Alibaba-W, Tencent Holdings, and Kuaishou-W [2] - The weight and performance of key stocks in the index include Tencent Holdings (1.35%), Alibaba-W (3.03%), and Meituan-W (1.60%) [4]

Investment Rating - The report maintains an "Outperform the Market" rating for the media industry [4][38]. Core Views - The report expresses a positive outlook on the gaming sector's new product cycle and the potential for a turnaround in the film and television industry, alongside opportunities in AI applications [3][38]. - It highlights the recent updates in AI technologies, including Sora2's new features, the release of Doubao model 1.6, and Google's Gemini 3.0 Pro, indicating a growing trend in AI applications across various sectors [3][38]. Summary by Sections Industry Performance - The media sector experienced a decline of 6.28% from October 13 to October 17, underperforming against the CSI 300 index, which fell by 2.22%, and the ChiNext index, which dropped by 5.71% [11][12]. - The media sector ranked 28th in terms of performance among all sectors during this period [11][13]. Key Updates - Sora2 introduced new features, including a "storyboard" function and an increase in video generation length to 25 seconds for Pro users [15][16]. - The Doubao model 1.6 was released, allowing users to adjust the depth of thought in its responses, significantly reducing token consumption and response time [16]. - Google's Gemini 3.0 Pro model began a limited rollout, enhancing reasoning capabilities and multimodal processing [16]. Box Office and Content Performance - The total box office for the week of October 13 to October 19 was 241 million yuan, with the top three films being "The Life of Langlang" and "The Volunteer Army: Blood and Peace," each earning 44 million yuan [2][17]. - The report notes the performance of various TV shows and variety programs, with "Flowers and Youth" and "The Ninth Season of Ace vs. Ace" leading in viewership [22][23]. Investment Recommendations - The report recommends focusing on gaming and IP trends, suggesting stocks like Giant Network, Kaiying Network, and Jibite for potential growth [3][38]. - It also advises monitoring the film and television sector for signs of recovery, recommending companies like Mango TV and Bilibili, as well as content producers like Light Media and Huace Film [3][38].

Market Overview - The gaming sector experienced a decline of 0.27% on October 20, with ST Huatuo leading the drop [1] - The Shanghai Composite Index closed at 3863.89, up 0.63%, while the Shenzhen Component Index closed at 12813.21, up 0.98% [1] Top Gainers in Gaming Sector - The top gainers included: - Youzu Network (002174) with a closing price of 11.66, up 5.42% and a trading volume of 645,700 shares, totaling 741 million yuan [1] - ST Dazheng (600892) at 4.14, up 5.08% with a trading volume of 106,800 shares, totaling 43.65 million yuan [1] - Kaiying Network (002517) at 23.74, up 4.12% with a trading volume of 526,800 shares, totaling 1.258 billion yuan [1] Top Losers in Gaming Sector - The top losers included: - ST Huadao (002602) at 17.32, down 4.94% with a trading volume of 2,259,200 shares, totaling 3.996 billion yuan [2] - Yaoji Technology (002605) at 25.21, down 2.17% with a trading volume of 85,200 shares, totaling 21.7 million yuan [2] - Shunwang Technology (300113) at 23.75, down 1.86% with a trading volume of 231,900 shares, totaling 559 million yuan [2] Capital Flow in Gaming Sector - The gaming sector saw a net outflow of 421 million yuan from main funds, while retail investors contributed a net inflow of 492 million yuan [2][3] - Notable capital flows included: - Kaiying Network (002517) with a main fund net outflow of 64.59 million yuan [3] - Youzu Network (002174) with a main fund net inflow of 46.51 million yuan [3] - Perfect World (002624) with a main fund net inflow of 24.05 million yuan [3] ETF Performance - The Gaming ETF (159869) tracking the China Animation and Gaming Index saw a decline of 7.55% over the past five days, with a net outflow of 64.67 million yuan [5]

Group 1: Company Updates - Gibit (603444) expects net profit for the first three quarters to exceed 1 billion yuan, with a projected increase of 57% to 86% year-on-year [4] - Kaiying Network (002517) showcased its AI toy brand "Warm Star Valley Dream Journey" at the 2025 China Toy Expo, targeting the emotional companionship market for ages 12-35 [5] - Korean game developer 111% and Chinese publisher Habby announced plans to establish a joint venture in Singapore to enhance their presence in the global mobile gaming market [6] Group 2: Regulatory Developments - South Korea's domestic agent system for games is set to be implemented on October 23, aiming to improve regulatory communication and compliance for foreign companies [7] Group 3: Industry News - Renowned game creator Tomonobu Itagaki, known for titles like "Ninja Gaiden" and "Dead or Alive," has passed away [9] - Elon Musk announced that his AI company xAI will enter the gaming industry, focusing on developing interactive 3D virtual game environments using advanced "world models" technology [10] - Web3 game studio Mythical Games secured strategic investment from Eightco Holdings to accelerate its mission in the entertainment ecosystem [11] Group 4: Esports Events - The 2025 League of Legends World Championship (S15) commenced in Beijing, featuring 17 top teams competing for the global championship title [12] - The 2025 CFS (CrossFire World Championship) China regional qualifiers began in Chongqing, attracting many top teams [13] - The CAC2025 (CS Asia Invitational) kicked off in Shanghai, with a total prize pool of 1 million USD and participation from 16 top teams [14]

Group 1: Company Updates - Gibit expects net profit for the first three quarters to exceed 1 billion yuan, with a year-on-year increase of 57% to 86% [4] - Haier Network's "Warm Star Valley Dream Journey" was showcased at the 2025 China Toy Expo, targeting the emotional companionship market for ages 12-35 [5] - Korean game developer 111% and Chinese publisher Habby plan to establish a joint venture in Singapore to enhance their presence in the global mobile gaming market [6] Group 2: Regulatory Developments - South Korea's domestic agent system for games will be implemented on October 23, aiming to improve compliance and communication efficiency for foreign companies [7] Group 3: Industry News - Renowned game creator Tomonobu Itagaki has passed away, known for his work on the "Ninja Gaiden" and "Dead or Alive" series [8] - Elon Musk announced that his AI company xAI will enter the gaming industry, focusing on creating interactive 3D virtual game environments [9][10] - Web3 game studio Mythical Games has secured strategic investment from Eightco Holdings to accelerate its mission in the entertainment ecosystem [11] Group 4: Esports Events - The 2025 League of Legends World Championship officially commenced in Beijing, featuring 17 top teams competing for the championship title [12] - The 2025 CFS China Regional Qualifiers are taking place in Chongqing, attracting many top teams [13] - CAC 2025, hosted by Perfect World, has started in Shanghai with a total prize pool of 1 million USD [14]

Investment Rating - The investment rating for the media industry is "Positive (Maintain)" [1] Core Insights - The rapid increase in the user penetration rate of generative AI, reaching 36.5% with 515 million users as of June 2025, provides a solid foundation for the commercialization of AI applications [33] - The gaming sector is experiencing a new game cycle, with significant anticipation for upcoming titles like "Kara Bichu," which has already achieved 10 million pre-registrations [34] - The report emphasizes the importance of continuous investment in AI applications and gaming, recommending companies such as Huya Technology, Kuaishou, NetEase Cloud Music, and others as key beneficiaries [33][34] Industry Data Overview - "Delta Action" ranked first in the iOS free game chart in mainland China, while "Honor of Kings" topped the iOS revenue chart [9] - The film "The Volunteer Army: Blood and Peace" achieved the highest box office for the week, grossing 0.53 billion [24] Industry News Summary - The report highlights ongoing advancements in AI applications across various sectors, including gaming, music, and education, with companies actively expanding their IP derivative businesses [29] - Notable developments include the launch of the AI model Ring-1T by Ant Group, which boasts a trillion parameters and excels in mathematical capabilities [29] - The collaboration between NetDragon and Volcano Engine aims to cultivate AI ecosystem talents, enhancing the integration of AI technology in education [29] Market Performance Overview - The A-share media sector performed at the lower end of the market in the 42nd week of 2025, while the publishing sector showed better performance [4] - The gaming sector's valuation has become more attractive following recent adjustments, with a positive outlook for both mobile and PC games [34]

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the sector compared to the overall market performance [10]. Core Insights - The report highlights the rising trend of "small happiness" self-consumption as a relative safe haven amid increasing risk aversion, with specific companies like Pop Mart and Damai Entertainment showing strong growth potential through innovative product offerings and expansion strategies [3][5]. - The gaming sector is experiencing significant adjustments, with major companies like Tencent and Century Huatong expected to maintain strong performance despite market volatility, while the AI video segment is emerging as a key area for growth [3][5]. Summary by Relevant Sections Consumer Sector - Pop Mart is ramping up production capacity and expanding product categories, with successful new IP launches and international expansion, achieving rapid sales growth during peak seasons [3]. - Damai Entertainment's core IP Chiikawa has seen high demand in mainland China, indicating strong market interest and potential for future growth [3]. Gaming Sector - Tencent Holdings is projected to have a market cap of 50,823 million RMB with a revenue growth of 13% year-on-year, while its PE ratio is expected to be 20 for 2025 [5]. - Century Huatong is also highlighted with a projected revenue increase of 21% year-on-year, indicating a positive outlook for its gaming products [5]. Cloud Computing and Entertainment - Alibaba's cloud computing segment is expected to grow at a rate of 11% year-on-year, with a market cap of 26,914 million RMB [5]. - Mango TV is anticipated to see a turnaround in its operations, benefiting from favorable policy changes in the long video sector [3]. AI and Technology - The report emphasizes the importance of AI in video production, with companies like Bilibili and Kuaishou positioned to leverage AI advancements for monetization [3]. - The technology sector has faced a 14% adjustment since October 2, but the report suggests that the fundamentals remain strong, driven by advancements in domestic models and chips [3].

Core Viewpoint - The article highlights the sustainable development path of Kaiying Network, emphasizing its commitment to AI innovation, cultural empowerment for overseas expansion, and shareholder returns amidst the transformation of the gaming industry during the "14th Five-Year Plan" period [1]. Group 1: Innovation and Product Development - Kaiying Network has increased its R&D investment, totaling 1.976 billion yuan from 2021 to 2024, focusing on a diverse product matrix including RPG, SLG, and anime genres [3]. - The company has revitalized its classic IP "Legend" and launched new titles like "Dragon Valley World," which quickly gained user popularity [3]. - Kaiying Network has multiple upcoming projects and has successfully obtained several game licenses, laying a solid foundation for future growth [3]. Group 2: AI and Cross-Industry Integration - The company has developed an AI tool platform "SOON" that significantly shortens game development cycles and enhances production efficiency [5]. - AI applications such as "Warm Star Valley Dream Journey" and "EVE," along with AI+hardware products like DPVR AI Glasses, have expanded new consumer scenarios beyond traditional gaming [5]. Group 3: Cultural Expansion and Revenue Growth - Kaiying Network has actively engaged in cultural trade, with overseas revenue accounting for an increasing share of total revenue, reaching 202 million yuan in the first half of 2025, a year-on-year increase of 59.57% [6]. - The company’s RPG title "MU Immortal" and strategy game "Nobunaga's Ambition: Path to the World" have been well-received by overseas users [6]. Group 4: IP Value and Cultural Promotion - The company leverages traditional Chinese culture for its overseas business, with projects like "Seasonal Customs" and adaptations of original IPs into various media formats [7]. - Kaiying Network's digital asset platform "Shiyuan Cube" utilizes digital and blockchain technology to promote traditional cultural IPs globally [7]. Group 5: Corporate Responsibility and Governance - Kaiying Network emphasizes the balance between economic performance and social responsibility, investing over 800 million yuan in share buybacks since 2019 and distributing a total of 1.212 billion yuan in cash dividends [8]. - The company has contributed over 15 million yuan to support education in underdeveloped areas and has logged over 7,000 hours of volunteer service [9]. - Kaiying Network has reduced carbon emissions by 10.22 tons over the past five years and actively participates in industry standard-setting for sustainable development [9].