Core Viewpoint - Perfect World Co., Ltd. has announced the criminal detention of three art-related personnel for corruption, focusing on issues in art outsourcing and procurement management [1][4]. Group 1: Corruption Allegations - Three employees from Qingyun Studio and Lingxiao Studio are implicated in corruption, involving collusion with suppliers to inflate procurement prices and accepting bribes [1][2]. - The involved personnel include: - Diao Zhongqi, art department leader for the "New Zhu Xian World" project, who allegedly colluded with suppliers to inflate prices and accepted bribes [2][3]. - Song Yuyang, former action group leader for the "Perfect New World" project, who allegedly misused his position to inflate prices and awarded contracts to close associates [2][3]. - Wang Xiaoliang, former art director for the "Perfect New World" project, who allegedly introduced unqualified suppliers and colluded with them to inflate prices [2][3]. Group 2: Company Response and Historical Context - Perfect World has a zero-tolerance policy towards corruption, having previously reported multiple cases of employee misconduct involving suppliers [2][5]. - The company has been actively addressing corruption issues, with previous announcements regarding investigations into employees' collusion with suppliers [5]. Group 3: Financial Performance and Shareholder Actions - In January 2025, the actual controller of Perfect World, Chi Yufeng, reduced his shareholding by 6.86 million shares, amounting to over 100 million yuan at an average price of approximately 16.7 yuan per share [5][6]. - The company's financial performance has faced challenges, with a reported revenue of 5.57 billion yuan in 2024, a 28.5% decline year-on-year, and a net loss of 1.288 billion yuan [7]. - However, the company has shown signs of recovery, with a revenue of 1.726 billion yuan in Q3 2025, a 31.45% increase year-on-year, and a net profit of 162 million yuan, marking a turnaround from previous losses [7].

Core Viewpoint - Perfect World has reported that three employees have been criminally detained for serious corruption and fraud involving collusion with suppliers, emphasizing a zero-tolerance policy towards such misconduct [1] Group 1: Corruption Cases - The company disclosed that multiple cases of employee misconduct involving collusion with suppliers and violations of conflict of interest regulations were identified in 2025 [1] - Three employees were specifically named: - An art department team leader was detained for allegedly inflating procurement prices and accepting bribes [1] - A former action group leader was detained for similar offenses, including improperly awarding contracts to close associates [1] - A former art director was detained for introducing unqualified suppliers and facilitating inflated procurement prices [1] - The art department has been identified as a major area of corruption, with multiple personnel involved facing criminal detention [1] Group 2: Company Response and Financial Performance - Perfect World has maintained open channels for reporting misconduct and has received multiple tips leading to these investigations [1] - The company previously issued anti-corruption announcements, indicating ongoing issues with employee misconduct and violations of company policies [1] - In the third quarter of 2025, the company reported revenues of 1.726 billion yuan, a year-on-year increase of 31.45%, and a net profit of 162 million yuan, up 176.59% [1] - For the first three quarters of the year, the company achieved revenues of 5.417 billion yuan, a 33% increase year-on-year, and a net profit of 666 million yuan, marking a turnaround from losses in the previous year [1]

Core Viewpoint - Perfect World has reported the detention of three art-related executives for corruption, highlighting ongoing issues with internal fraud and misconduct within the company [3][6]. Group 1: Corruption Cases - In 2025, Perfect World investigated multiple cases of employee collusion with suppliers, leading to criminal charges against certain individuals [5]. - The implicated employees include a project art lead from the Qingyun Studio and two former members from the Lingxiao Studio, all of whom are accused of inflating procurement prices and accepting bribes [5][6]. - Specific allegations include the art lead's involvement in price inflation and bribery, while the other two individuals are accused of misusing their positions to favor unqualified suppliers and accepting substantial bribes [5][6]. Group 2: Company Performance and Response - Perfect World has faced significant financial challenges, reporting a revenue of 5.57 billion yuan in 2024, a year-on-year decrease of 28.5%, and a net loss of 1.288 billion yuan [7]. - The company has initiated management changes and cost-cutting measures to address its financial situation [7]. - Recent financial reports indicate signs of recovery, with a revenue of approximately 5.4 billion yuan in the first three quarters of 2025, representing a year-on-year growth of about 33%, and a return to profitability with a net profit of 670 million yuan [7].

Group 1 - The core issue in the gaming industry involves corruption related to marketing, advertising, and art outsourcing positions, with Perfect World being a recent example of anti-corruption efforts [1][5] - Perfect World announced the detention of three art-related personnel for corruption, highlighting ongoing internal investigations and the receipt of new whistleblower reports [3][5] - The specific misconduct involved inflated procurement prices and bribery, with implicated employees from Qingyun Studio and Lingxiao Studio [4][5] Group 2 - Perfect World has faced multiple corruption cases in recent years, with a significant number of employees and former employees involved in collusion with suppliers [5] - The company reported a revenue of 5.57 billion yuan in 2024, a year-on-year decrease of 28.5%, resulting in a net loss of 1.288 billion yuan [5] - In contrast, the company's performance showed signs of recovery in the first three quarters of 2025, achieving approximately 5.4 billion yuan in revenue, a year-on-year increase of about 33%, and a net profit of 670 million yuan [5]

Group 1 - The company has disclosed serious employee misconduct involving illegal activities, emphasizing a zero-tolerance policy towards corruption and fraud [2] - Multiple cases of employee collusion with suppliers, abuse of power, and violation of conflict of interest regulations have been reported, leading to criminal charges [2][3][4] - Specific employees have been identified and detained by law enforcement for their involvement in corrupt practices, including inflated procurement prices and accepting bribes [3][4] Group 2 - The company has previously issued anti-corruption announcements, indicating ongoing investigations into serious violations of company policies and labor contracts [5] - The art department has been highlighted as a major area affected by corruption, with several individuals from various departments facing criminal charges [5] - In the third quarter of 2025, the company reported revenues of 1.726 billion yuan, a year-on-year increase of 31.45%, and a net profit of 162 million yuan, reflecting a significant turnaround from previous losses [5]

Core Viewpoint - Perfect World is intensifying its internal anti-corruption efforts by addressing serious misconduct involving employees and suppliers, reflecting a commitment to governance and accountability in the gaming industry [1][3] Group 1: Internal Actions - On January 15, 2026, Perfect World announced the criminal detention of three employees from its art department for bribery and embezzlement, following a series of investigations into corruption cases in 2025 [1] - The implicated employees were part of the core art team for major projects, including the art lead for the "New Zhu Xian World" and former leads for the "Perfect New World" project, who colluded with suppliers to inflate prices and accept bribes [1] - This action follows a previous anti-corruption initiative in July 2025, which involved a broader range of employees and resulted in the blacklisting of four suppliers [3] Group 2: Industry Context - The gaming industry's art outsourcing procurement is characterized by high costs and specialization, making it a susceptible area for corruption [3] - Perfect World's repeated public disclosures of internal anti-corruption cases indicate a shift towards refined governance practices within the industry, essential for maintaining project integrity and competitiveness [3] - As competition in the gaming sector matures, internal risk control capabilities are becoming a critical component of corporate competitiveness [3]

Core Viewpoint - Perfect World has disclosed serious employee misconduct involving illegal activities, emphasizing a zero-tolerance policy towards corruption and fraud [1][4]. Group 1: Employee Misconduct - Several employees and suppliers have been implicated in collusion, embezzlement, and violations of conflict of interest regulations, leading to criminal charges [1]. - Specific cases include: - An employee, identified as 刁某某, was detained for allegedly inflating procurement prices and accepting bribes, resulting in his dismissal [1]. - Another employee, 宋某某, was also detained for similar offenses, including awarding contracts to close associates [2]. - A former art director, 王某某, was detained for introducing unqualified suppliers and accepting large bribes [3]. Group 2: Previous Anti-Corruption Efforts - Perfect World has previously issued multiple anti-corruption announcements, indicating ongoing issues within various departments, particularly in the art department [4]. - The company reported significant financial performance in Q3 2025, with revenue of 1.726 billion yuan, a year-on-year increase of 31.45%, and a net profit of 162 million yuan, up 176.59% [4].

Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [12]. Core Insights - "鹅鸭杀" (Goose Duck Kill) has become a phenomenon in the gaming industry, particularly on the Steam platform, gaining immense popularity in China due to the influence of top gaming streamers [2][3]. - The mobile version of "鹅鸭杀," co-published by Kingsoft and Huya, saw over 5 million new registered users within 24 hours of its public launch on January 7, and surpassed 10 million new users within 6 days [3]. - The game features over 30 different roles, enhancing its gameplay beyond traditional social deduction games like Werewolf, allowing up to 16 players to participate simultaneously [4]. - The mobile version has optimized network access and connection delays, addressing issues faced by the Steam version, and introduced innovative gameplay modes to enhance user experience [5]. Company Recommendations - The report suggests focusing on several gaming companies, including Kingsoft, 37 Interactive Entertainment, Kying Network, Shenzhou Taiyue, Giant Network, G-bits, Perfect World, Yaoji Technology, and Zhangqu Technology, as potential investment opportunities in the gaming sector [5].

Investment Rating - The report maintains a "Buy" rating for the media industry, indicating a positive outlook for the sector [7][11]. Core Insights - The media industry (Shenwan) saw a significant increase of 13.10% from January 5 to January 11, 2026, outperforming the major indices [14][17]. - Key segments within the industry performed well, with advertising and marketing up 19.17%, television broadcasting up 15.15%, and gaming up 13.14% [14][17]. - The report highlights strong individual stock performances, particularly for companies like Inertia Media and BlueFocus, which saw increases of 52.62% and 49.13% respectively [17][18]. Industry Performance Summary Market Performance - The media industry outperformed the major indices, with the Shanghai Composite Index rising 3.82% and the Shenzhen Component Index rising 4.40% during the same period [14][16]. - The advertising and marketing sector led the gains, followed by television broadcasting and gaming [14][16]. Key Data and Updates AI Applications - AI product rankings showed significant growth, with Gemini and DeepSeek increasing by 28% and 30% respectively [19][20]. - OpenRouter's weekly token usage rose by 15%, indicating a growing demand for AI applications [19][20]. Gaming - The top five mobile games on iOS as of January 10, 2026, included "Honor of Kings" and "Peacekeeper Elite" [23][25]. - New game releases are anticipated, including Tencent's "Counter-Strike: Future" on January 13, 2026 [27][26]. Film and Television - Domestic box office revenue reached 362 million yuan during the week of January 5-11, 2026, with "Hidden Kill" leading the charts [29][30]. - Seven new films are set to be released from January 12 to January 18, 2026 [30][31]. Investment Recommendations - The report recommends focusing on themes such as AI applications and cultural exports, with specific attention to gaming, IP, short dramas, marketing, and publishing sectors [5][34]. - Notable companies to watch include Giant Network, Perfect World, and Kuaishou, all rated as "Buy" [5][34].

Core Insights - The domestic leading film and television companies serve as a barometer for the entire industry, reflecting market dynamics through their project activities [1] Industry Trends - Long video content remains resilient despite competition from short videos and short dramas, as evidenced by the stable production frequency and project reserves of leading companies [2] - Content is increasingly distributed across multiple platforms, with collaborations among major companies and significant platforms like Douyin and Red Fruit for micro-short dramas [3] - A majority of traditional film and television companies, approximately 80%, have entered the short drama sector, establishing dedicated brands or subsidiaries for short dramas [3] - Companies are building comprehensive industry chains, with examples like Huace Film & TV expanding into film education and AI technology applications in production [3] Project Dynamics - Huace Group has several upcoming projects, including long dramas like "Guose Fanghua" and "Jinxiu Fanghua," and films such as "Assassination Novelist 2" scheduled for 2025 [5][9] - Zhengwu Sunshine will release dramas like "Cuihuo Niandai" and "Cherry Amber" in 2025, along with its first theatrical film "De Xian Jin Zhi" [13][14] - Lingmeng Film will present long dramas like "Shujuan Yimeng" and "Ziyue Gui" in 2025, and has international collaborations for "Thirty Only: Bangkok Edition" [16][20] - Newli Media plans to air several dramas in 2025, including "Saodu Fengbao" and "Yashe," along with the film "Qingsheng 3" [24][26] - Perfect World Film will showcase a variety of long dramas and micro-short dramas in 2025, including "Qian Duo Tao Hua Yi Shi Kai" and "Fuqi De Chun Jie" [30][32] - Huanyu Film will release dramas like "Wufu Linmen" and "Linjing Xian" in 2025, along with micro-short dramas [36][38] - Baiana Qiancheng will present multiple dramas and films in 2026, including "Xiao Cheng Da Shi" and "Xian Yu Fei Sheng" [42][44] - Xixi Film will air dramas like "Liu Zimei" and "Xiao Fang Chujia" in 2026 [46][48] - Yaoke Culture will release several dramas in 2026, including "Bing Hu Chong Sheng" and "Hua Kai Jin Xiu" [50][51] - Shengxi Huashi is focusing on original scripts and has established a subsidiary for short drama production, with projects like "Zhangxin" and "Yulan Huakai Jun Zai Lai" [54][57] - Daocaoxiong Entertainment will present a range of dramas in 2026, including "Liangjing Shiwur" and "Zai Qing Chun" [60][64] - Changxin Media is set to release various dramas in 2026, including "Wo De Shan Yu Hai" and "Yanyu Shen You Ji" [66][71]