Group 1 - Shanghai Tianqi Lingguang Technology Co., Ltd. has been established, focusing on artificial intelligence software development and wearable smart device sales [1] - The company is wholly owned by Century Huatong (002602) through indirect shareholding [1] Group 2 - Food and Beverage ETF (Product Code: 515170) has seen a recent decline of 0.35% over the past five days, with a price-to-earnings ratio of 20.24 times and a net redemption of 20.687 million yuan [3] - Gaming ETF (Product Code: 159869) has increased by 1.44% over the past five days, with a price-to-earnings ratio of 35.98 times and a net redemption of 47.555 million yuan [3] - Sci-Tech 50 ETF (Product Code: 588000) has decreased by 2.18% over the past five days, with a price-to-earnings ratio of 156.32 times and a net redemption of 580 million yuan [4] - Cloud Computing 50 ETF (Product Code: 516630) has decreased by 1.43% over the past five days, with a price-to-earnings ratio of 96.95 times and a net redemption of 11.138 million yuan [5]

Investment Rating - The report maintains an "Outperform" rating for the media industry [3] Core Insights - The media sector outperformed the market in November, with the Shenwan Media Index rising by 1.69%, surpassing the CSI 300 Index by 4.14 percentage points, ranking 7th among 31 industries [4][20] - The number of game approvals reached a new high, with 178 domestic games and 6 imported games approved in November, contributing to a total of 1,625 game approvals from January to November, a year-on-year increase of 26.8% [4][28] - The gaming market revenue in October was 31.4 billion yuan, a year-on-year growth of 7.8%, driven by strong product cycles from leading companies [4][32] Summary by Sections Market and Industry Review - The media sector's performance in November was strong, with a 1.69% increase in the Shenwan Media Index, outperforming the CSI 300 Index [4][20] - The current TTM-PE for the Shenwan Media Index is 42.6x, positioned at the 82.2% percentile over the past five years [20][26] Gaming - The number of game approvals in November was the highest in three years, with a total of 178 domestic and 6 imported games approved [28] - The gaming market revenue in October was 31.4 billion yuan, with mobile gaming revenue at 22.6 billion yuan, reflecting a year-on-year growth of 2.4% [32] - The overseas revenue for Chinese self-developed games reached 1.799 billion USD in October, marking an 11.9% year-on-year increase [41] Film and Television - The total box office in November reached 3.553 billion yuan, a year-on-year increase of 89.3%, primarily due to the success of "Zootopia 2" [49] - The top five films in November included "Zootopia 2," which grossed over 2.2 billion yuan within nine days of release [60] - The drama market saw high viewership, with "The Tang Dynasty Mysteries" leading with 1.5 billion views [67] AI Applications - The report highlights advancements in AI video models, including the launch of the O1 video model by Keling AI, which allows users to generate videos from text prompts [79] - PixVerse V5.5 was released, enabling the creation of multi-angle narrative videos [84] - Google's Gemini 3 Pro and Nano Banana Pro were launched, showcasing significant improvements in AI capabilities [91] Investment Recommendations - The report suggests focusing on the gaming sector's new product cycles and AI applications, recommending companies such as Giant Network, G-bits, and K-Game Network [96] - The December investment portfolio includes Giant Network, K-Game Network, Bilibili, and HuiLiang Technology [7]

Market Overview - The Shanghai Composite Index fell by 0.55% on December 15, with 13 sectors rising, led by non-bank financials and retail, which increased by 1.59% and 1.49% respectively. The sectors with the largest declines were electronics and communications, down by 2.42% and 1.89% respectively [2] Capital Flow Analysis - The net outflow of capital from the two markets was 47.184 billion yuan, with 8 sectors experiencing net inflows. The defense and military industry saw the largest net inflow of 2.287 billion yuan, rising by 0.83%, followed by the food and beverage sector, which increased by 0.67% with a net inflow of 1.124 billion yuan [2] - A total of 23 sectors experienced net capital outflows, with the electronics sector leading with a net outflow of 16.331 billion yuan, followed by the power equipment sector with a net outflow of 5.919 billion yuan. Other sectors with significant outflows included non-ferrous metals, machinery, and communications [2] Media Industry Performance - The media industry declined by 1.63%, with a total net outflow of 2.678 billion yuan. Out of 129 stocks in this sector, 27 rose, including one hitting the daily limit, while 97 fell, with two hitting the lower limit [3] - The stocks with the highest net inflows included Focus Media, with a net inflow of 101 million yuan, followed by Beijing Culture and Jiubite, with net inflows of 61.9825 million yuan and 55.9307 million yuan respectively [3] - The stocks with the largest net outflows included Century Huatong, with a net outflow of 454.499 million yuan, followed by Bona Film Group and BlueFocus Communication Group, with net outflows of 444.611 million yuan and 346.265 million yuan respectively [5]

Core Points - The gaming sector experienced a decline of 1.57% on December 15, with Century Huatong leading the drop [1] - The Shanghai Composite Index closed at 3867.92, down 0.55%, while the Shenzhen Component Index closed at 13112.09, down 1.1% [1] Fund Flow Analysis - On the same day, the gaming sector saw a net outflow of 771 million yuan from major funds, while retail investors contributed a net inflow of 749 million yuan [2] - Speculative funds recorded a net inflow of 22.06 million yuan into the gaming sector [2]

Investment Rating - The report maintains a "Positive" investment rating for the media industry [1] Core Insights - The gaming sector is expected to see a significant increase in revenue due to the upcoming holiday season and the launch of new games, with notable titles like "Nine Muses of the Wild" and "Goose Duck Kill" generating high anticipation [3] - The film industry is highlighted by the upcoming release of "Avatar 3," which has already garnered significant pre-sale interest, indicating strong potential for box office performance [3] - The emotional economy in China is projected to grow substantially, with the market expected to reach 8.1 trillion yuan by 2030, driven by online platforms and AI technology [11][12] Summary by Sections 1. Soul: Leading Immersive Social Platform - Soul is positioned as a leading platform in the immersive social space, leveraging AI to enhance user engagement and emotional value [11][17] - The emotional economy in China is projected to grow from 2.4 trillion yuan in 2024 to 8.1 trillion yuan by 2030, with a CAGR of 22.2% [12] - The platform reported a revenue of 16.83 billion yuan in the first eight months of 2025, reflecting a year-on-year growth of 17.82% [21][26] 2. Industry Data Overview - "Delta Action" topped the iOS free game chart, while "Honor of Kings" led the iOS revenue chart as of December 13, 2025 [27][31] - The film "Zootopia 2" achieved the highest weekly box office, indicating strong audience interest [41] 3. Industry News Summary - The release of GPT-5.2 is expected to enhance AI capabilities in the industry, while Disney's investment in OpenAI emphasizes the growing value of content IP [3] - The gaming sector is experiencing a surge, with "Delta Action" achieving record daily revenue following a new season launch [3] 4. Announcement Summary - Recent changes in leadership at various media companies and the successful "hat removal" of Caesar Culture highlight ongoing developments in the industry [3] 5. Sector Performance Overview - The A-share media sector performed moderately in the market, with the gaming sector showing strong performance [3]

Core Viewpoint - Century Huatong, the largest gaming company by market capitalization in A-shares, announced that its indirect investment in Moer Thread is expected to contribute a net profit of 640 million yuan in Q4 of this year, accounting for approximately 53% of the company's audited net profit for 2024 [1][4]. Investment Impact - The successful cross-industry investment is projected to contribute significantly to Century Huatong's profits, with the investment expected to account for less than 20% of the company's net profit for the first three quarters of 2025, estimated at 4.36 billion yuan [3][9]. - Century Huatong's wholly-owned subsidiary, Shengqu Shumeng, holds about 7.3% of the shares in Guosheng Capital, which in turn holds approximately 19.589 million shares of Moer Thread, representing about 4.9% of the total share capital before the IPO and about 4.2% after the IPO [3][9]. Moer Thread IPO Performance - Moer Thread, known as the "first domestic GPU stock," was listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board on December 5, with an initial price of 114.28 yuan per share. On its first trading day, the stock opened at 650 yuan, more than quadrupling its issue price [3][9]. - As of December 10, Moer Thread's stock closed at 735 yuan, with a total market capitalization of 345.5 billion yuan, reflecting a significant increase of 16.98% on that day [4][10]. Century Huatong's Financial Performance - Century Huatong's stock price has seen substantial growth, rising from around 5 yuan at the beginning of the year to a peak of 22.49 yuan in September, with an overall increase of over 250% year-to-date [4][10]. - The company reported a record quarterly revenue of 10.02 billion yuan in Q3, marking a year-on-year growth of 60.2%, and a net profit of 1.7 billion yuan, up 163.8% year-on-year. For the first three quarters, total revenue reached 27.22 billion yuan, surpassing the previous year's total, with a net profit of 4.36 billion yuan, a year-on-year increase of 141.6% [4][10]. Game Performance - Century Huatong's subsidiary, Diandian Interactive, has achieved significant success with its game "Whiteout Survival," which has topped the overseas revenue charts for Chinese mobile games for 15 consecutive months, with global revenue exceeding 3.8 billion USD (approximately 26.8 billion yuan) as of November [5][11]. - Another successful title, "Kingshot," has also performed well, ranking second in overseas revenue for September and October, with total global revenue exceeding 640 million USD (approximately 4.5 billion yuan) since its launch in February [5][11].

Core Insights - The article highlights the ongoing trend of Chinese gaming companies successfully expanding into overseas markets, with large firms optimizing classic titles and smaller firms innovating to break through [2][10] - The "Evergreen List" and "Potential Evergreen List" are introduced, showcasing games that have maintained strong performance in international markets [2][10] Group 1: Evergreen Games - In November, 26 games made it to the "Evergreen List," an increase of 3 titles from October, with notable entries including "Gossip Harbor," "PUBG MOBILE," and "Puzzles & Survival" [2][9] - The total estimated revenue for these 26 games in November reached approximately $299 million, equivalent to about 2.11 billion yuan, with 9 games exceeding $10 million in revenue [2][9][10] Group 2: Potential Evergreen Games - The "Potential Evergreen List" features 14 games, with a decrease of 4 titles from October, indicating a competitive landscape [2][10] - "Whiteout Survival" led the list with an estimated revenue of $86.21 million (approximately 609 million yuan) in November, followed by "崩坏:星穹铁道" and "Top Heroes," each surpassing $20 million [10][11] Group 3: Industry Trends and Support - The gaming industry faces challenges due to global economic pressures, but there are supportive policies from various cities in China aimed at facilitating game exports [11] - The adoption of AI technologies is helping to reduce costs and improve efficiency in game development and marketing strategies, providing a more sustainable path for Chinese games in international markets [11]

Core Viewpoint - Century Huatong's investment in the technology company Moore Threads is expected to significantly impact its net profit for the fourth quarter of 2025, with an estimated contribution of 640 million yuan, representing approximately 53% of the company's audited net profit for 2024 [1][5]. Group 1: Investment Details - Century Huatong's wholly-owned subsidiary, Shanghai Shengqu Shuming Enterprise Management Co., Ltd., holds a 7.3121% stake in Guosheng Capital, which owns approximately 19.59 million shares of Moore Threads [3]. - Moore Threads, known as the "first domestic GPU stock," saw its share price increase by 468.78% on its debut, reaching 650 yuan per share, with a market capitalization exceeding 300 billion yuan [3]. - As of December 10, Moore Threads' share price rose to 735 yuan, resulting in a total market capitalization of 345.5 billion yuan [3]. Group 2: Market Context - The capital market has shown a strong enthusiasm for technology companies this year, with many tech IPOs experiencing significant price increases post-listing [1]. - Several A-share listed companies have engaged in direct investments or indirect holdings in technology startups, marking a trend of investment in technological innovation [1][6]. - The investment in Moore Threads is part of a broader trend where listed companies are increasingly investing in technology firms to enhance their growth and market valuation [7]. Group 3: Company Background - Century Huatong was established in 2005 and listed on the Shenzhen Stock Exchange in July 2011, initially focusing on automotive parts before transitioning to the internet gaming industry in 2014 [5]. - The company has diversified its operations to include internet gaming, automotive parts manufacturing, artificial intelligence cloud data, and brain science research, among other fields [5]. - Tencent is noted as a significant shareholder in Century Huatong, indicating strong backing from major industry players [5].

Core Viewpoint - Century Huatong is facing legal actions due to false statements made in their financial reports, leading to investor claims and penalties from regulatory authorities [2][6]. Group 1: Legal Proceedings and Investor Claims - The law firm Shanghai Jiucheng is actively pursuing claims for investors affected by Century Huatong's false statements, with some investors already receiving compensation [1][5]. - On December 8, 2025, the law firm submitted another case to the court regarding investor claims against Century Huatong [1]. - The firm is continuing to accept claims from other investors and is working on subsequent cases [1][5]. Group 2: Regulatory Findings - On November 6, 2024, Century Huatong received an administrative penalty from the China Securities Regulatory Commission (CSRC) for false records in their financial reports from 2018 to 2022 [2][6]. - The company failed to conduct goodwill impairment tests as required, resulting in an understatement of goodwill impairment provisions by 62.363 million yuan in 2018 [6]. - There were errors in the disclosure of goodwill values and segment reporting from 2019 to 2022, which did not comply with accounting standards [7]. - Century Huatong was found to have fabricated software copyright transfer transactions, leading to inflated revenues in 2020 and misreported performance commitments [7].

Market Overview - On December 11, A-shares showed mixed performance with the Shanghai Composite Index declining by 0.46% to below 3900 points, while the ChiNext Index rose by 0.3% [1][2] - The total trading volume in the Shanghai and Shenzhen markets reached 1.17 trillion yuan, with over 4200 stocks declining [1] Sector Performance - Active sectors included commercial aerospace, superconductors, nuclear fusion, ultra-high voltage, wind power, and CRO concept stocks, while retail and real estate sectors faced adjustments [4] - Notable stocks included Zhiye Technology, which achieved a four-day consecutive rise, and several stocks in the precious metals sector, such as Shanjin International, which rose nearly 6% [4] Company Highlights - Moer Thread's stock price surged nearly 17%, reaching a market capitalization of 403.1 billion yuan, with a peak market cap exceeding 410 billion yuan [6] - Century Huatong reported a floating profit of over 600 million yuan from its investment in Moer Thread, which is expected to significantly impact its net profit for the fourth quarter of 2025 [8] ZTE Corporation - ZTE Corporation's A-shares fell over 7%, while H-shares dropped more than 9%, amid significant sell-offs by major shareholders, including BlackRock and UBS [9][11] - The recent launch of the AI phone Nubia M153 by ZTE has garnered market attention, despite the stock's decline [10] Economic Outlook - The World Bank raised its 2025 economic growth forecast for China by 0.4 percentage points, citing supportive fiscal and monetary policies as well as a more diversified export market [12]