Core Viewpoint - Perfect World is re-entering the cinema business by taking over and upgrading the UME Cinema (Beijing Huaxing Store) to Perfect World Cinema (Zhongguancun IMAX Store), aiming to enhance its brand image and market competitiveness in the evolving entertainment landscape [1][5] Group 1: Cinema Operations and Adjustments - The Zhongguancun IMAX Store began trial operations on November 21, with all nine screening halls opened by December 21, including three special effect halls and three VIP halls [3] - Initial operational issues were reported, including seat management problems and customer complaints about the viewing experience, leading to adjustments in seating and hall configurations [4][3] - The cinema staff acknowledged operational challenges during the trial period, including heating issues and inadequate restroom facilities, which are constrained by the building's structure [4][6] Group 2: Corporate Structure and Business Strategy - Although the cinema is branded as "Perfect World," it operates under Perfect World Holdings, with no direct financial ties to the publicly listed Perfect World [6] - The cinema business was previously divested from Perfect World in 2018, with assets transferred to Perfect Holdings, indicating a strategic shift to reduce operational risks and improve capital efficiency [7][6] - Perfect World aims to leverage its gaming and film IPs to create a closed-loop ecosystem that integrates content production, distribution, and ancillary consumption, enhancing its competitive edge in the cinema sector [5][9] Group 3: Market Position and Future Prospects - The cinema industry is transitioning from a single screening model to a multi-functional entertainment space, with leading companies establishing high barriers to entry [13] - Perfect World Cinema is focusing on enhancing brand competitiveness through hardware upgrades and diversified service offerings, aligning with consumer trends towards experiential entertainment [9][13] - Despite the challenges, the company is exploring ways to convert its gaming IP into themed experiences within cinemas to attract core fan bases and increase customer spending [13][9]

Investment Rating - The report assigns an "Accumulate" rating for the industry [1]. Core Insights - The report highlights that the daily usage of Doubao Tokens has surpassed 50 trillion, ranking first in China and third globally. The gaming market is expected to grow steadily by 2025, with female-oriented games experiencing growth rates significantly above the industry average [2][4]. Industry Summary - The Doubao model was launched by Huoshan Engine, with significant improvements in capabilities, including enhanced agent abilities, multimodal capabilities, and context management [8][9]. - The domestic gaming market is projected to reach a revenue of 350.79 billion yuan in 2025, reflecting a year-on-year growth of 7.68%. Mobile games, PC games, and console games are expected to see growth rates of 7.92%, 14.97%, and 86.33%, respectively [13][19]. - The female-oriented gaming segment is rapidly expanding, with a market size of 8 billion yuan in 2024, marking a year-on-year increase of 124.1% [19]. - The report recommends investment in specific companies within the media sector, including Wanda Film, Perfect World, and Mango Super Media, among others, due to their potential for sustained high growth [7][21].

Core Insights - The media industry is driven by content, leading to a market evolution from "policy recovery" to "expected fundamental improvement" and then to "performance realization and valuation enhancement" [3][6] - The report is optimistic about two segments: gaming and film, highlighting the potential for long-term operations and competition against major players to reshape gaming valuations, and the recovery of the film sector post-policy changes [3][6] Gaming Sector - The gaming sector is expected to see sustained performance growth driven by new game releases in 2025, with a focus on long-term operations and a shift from "chasing hits" to "nurturing evergreen" titles [7][18] - The gaming industry's valuation is recovering, with the current price-to-earnings (P/E) ratio around 27x, indicating a return to a reasonable range after a period of low valuations [18][22] - The introduction of AI in gaming is anticipated to enhance user engagement and extend gameplay duration, contributing to long-term growth [7][28] Film Sector - The film industry is poised for recovery following the implementation of the "21 Regulations" by the broadcasting authority, which is expected to revitalize content production and performance realization starting in the second half of 2026 [8][18] - Current film sector performance is compared to the gaming sector in 2022, suggesting a similar trajectory of recovery and growth potential [8][18] AI Applications - The commercialization of AI applications is accelerating, with expectations for a significant turning point in 2026, particularly in AI comic and advertising sectors [9][18] - AI comic production is seen as advantageous due to rapid content iteration and cost control, with companies like Kuaishou positioned to benefit [9][18] - The AI+ advertising model has been successfully implemented globally, with major players like Tencent and Bilibili expected to replicate this success domestically [9][18]

Core Insights - The Chinese gaming industry is projected to achieve a remarkable sales revenue of 350.79 billion yuan and a user base of 683 million by the end of 2025, contributing positively to the emerging economy and cultural prosperity [1] - The overall economic scale of the gaming and related industries in China is estimated to exceed 1.2 trillion yuan by 2025, encompassing core economic activities as well as related sectors such as hardware, esports, and cultural tourism [1] Industry Growth - The revenue growth in the gaming market is significantly driven by the successful operation of several long-standing games, with the client game market generating a sales revenue of 78.16 billion yuan in 2025, reflecting a substantial year-on-year increase of 14.97% [2] - Classic IPs like "Perfect World," "Journey," and "Legend" have shown remarkable longevity, with "Perfect World Classic Edition" maintaining its vitality through innovative gameplay and community engagement [2] Market Trends - The gaming industry is diversifying its offerings with new game genres, particularly in the open-world category, which is shifting from wilderness to urban settings, with several new titles in development [2] - The integration of advanced technologies, such as Unreal Engine 5.6 and NVIDIA DLSS4, is enhancing user experience in upcoming games like "Yihuan," which is set to host offline community engagement events [2] Cultural Impact - Chinese self-developed games have consistently generated over 100 billion yuan in overseas sales for six consecutive years, contributing to the cultural export alongside online literature and short dramas [6] - The cultural core of Chinese games is becoming a competitive advantage on the international stage, with a focus on integrating traditional Chinese culture into game narratives and interactions [6] Technological Innovation - The gaming sector is driving advancements in AI, digital interaction engines, and graphics rendering technologies, with the EU supporting independent game development to promote cultural diversity and innovation [6] - The Chinese government has initiated plans to enhance technological innovation in online gaming, focusing on collaboration in AI, game engines, and virtual reality [6] Policy Support - The increasing recognition of the economic, cultural, and technological value of the gaming industry has led to various local governments implementing policies to support high-quality development, such as Shanghai's "Ten Measures for Gaming and Esports" [7] - The small program gaming market is expected to generate 53.54 billion yuan in revenue in 2025, marking a significant year-on-year growth of 34.39%, while the esports market is projected to reach 170.05 billion yuan, with an 18.96% increase [7]

Investment Rating - The industry investment rating is "Positive" and maintained [8] Core Insights - In November, the issuance of game licenses reached a new high, with 184 licenses granted, including 178 domestic and 6 imported games, surpassing the previous record since the resumption of license issuance in 2022 [10][11] - Major self-developed games from leading companies continue to perform well overseas, with Point Point Interactive's "Whiteout Survival" and "Kingshot" ranking first and second in the November overseas mobile game revenue chart [10][11] - A new product cycle is approaching as key new games from listed companies are set to launch, with significant titles scheduled for testing and release in December [6][10] Summary by Sections Game License Issuance - In November, a total of 184 game licenses were issued, setting a new monthly record for domestic licenses, with notable approvals for games from Perfect World, Kaixin, and Bilibili [10][11] - Year-to-date, 1,532 domestic game licenses have been issued, exceeding the total of 1,306 for the entire year of 2024 [10] Overseas Performance - The overseas performance of top self-developed games remains strong, with "Whiteout Survival" achieving over $3.8 billion in cumulative revenue and "Kingshot" exceeding $640 million [10][11] - The casual merge game "Tasty Travels: Merge Game" saw a 10% revenue increase in November, ranking fourth in the global merge game revenue chart [10] Upcoming Game Releases - Key new games from listed companies are set to launch, including Giant Network's "Famous General Kill" on December 19 and G-bits' "Nine Muxi" on December 18 [6][10] - Other notable upcoming titles include Tencent's "Counter-Strike: Future" scheduled for January 13, 2026, with over 25 million pre-registrations [6][10]

Core Insights - The article discusses the implementation of a registration management system for generative artificial intelligence applications in Beijing, allowing services to go live after registration [1] - As of December 19, 30 new generative AI services have been registered in Beijing, which must display their registration number prominently [1] Group 1: Regulatory Framework - The "Interim Measures for the Management of Generative Artificial Intelligence Services" outlines the registration process for AI applications that utilize large models via API or other means [1] - The registration system aims to ensure compliance and transparency for generative AI services operating in the region [1] Group 2: Registered AI Services - A total of 30 generative AI services have been registered, including platforms from various companies such as: - ChuXin Intelligent Platform by People's Daily [3] - LoVong Dragon Phoenix AI Platform by Higher Education Press [3] - TongDao by China Electronic Technology Standardization Institute [3] - XiaoJing Financial Intelligence by Beijing Yin Financial Technology [3] - AI Assistant by China Construction Bank [3] - Each registered service is assigned a unique registration number that must be displayed in a prominent location [1][3]

Core Insights - The "Intangible Cultural Heritage Renewal Plan" in Beijing's Dongcheng District aims to integrate traditional craftsmanship with modern aesthetics, promoting cultural products and experiences that resonate with contemporary consumers [1][2] Group 1: Project Implementation and Impact - Over the past three years, the "Intangible Cultural Heritage Renewal Plan" has invested over 5 million yuan to support 114 projects, leading to significant outcomes [2] - The plan has enhanced innovation vitality, allowing ancient techniques to find modern expressions, and increased cultural influence through digital technology and immersive experiences [2] - The development model has innovated by deeply integrating intangible heritage with various sectors such as culture, tourism, commerce, and education [2] Group 2: Collaborative Efforts and Future Directions - Dongcheng District has established an innovative development platform that fosters deep integration of intangible heritage with commercial and tourism industries [2] - A recent resource matching event led by the Dongcheng Cultural and Tourism Bureau facilitated collaboration between over 50 intangible heritage projects and demand institutions, exploring innovative applications in consumer upgrades and brand building [2] - The focus is on precise policy guidance, professional market operations, and practical innovation transformation to ensure that intangible heritage meets modern lifestyle needs [3]

Investment Rating - The report maintains a "Recommended" rating for the media and internet industry [1] Core Viewpoints - The media and internet industry is driven by performance and AI empowerment, with a focus on core assets in the Hong Kong internet sector and AI applications [3][4] - The report highlights the stable supply in the film industry and the recovery of the box office, with significant growth in ticket sales [16][20] - The gaming sector shows strong performance with an increase in both client and mobile game revenues, driven by dual-end interaction [57][58] - The advertising market is showing steady growth, with a notable increase in spending across various sectors [3][4] Market Review - In November 2025, the media industry index rose by 1.69%, outperforming the Shanghai and Shenzhen 300 index, which fell by 2.46% [5][6] - The media sector's performance varied, with advertising marketing up by 9.68% and the gaming sector down by 0.94% [10][12] Sub-industry Data Tracking Film Industry - The national box office for November 2025 reached 3.553 billion yuan, a year-on-year increase of 89.29% and a month-on-month increase of 36.03% [16][20] - The top film, "Zootopia 2," generated a box office of 1.731 billion yuan, accounting for 54.2% of the monthly total [23] Gaming Industry - The domestic gaming market's actual sales revenue in October 2025 was 31.359 billion yuan, a year-on-year increase of 7.83% [57] - Client games showed a strong performance with revenues of 7.227 billion yuan, up 29.4% year-on-year [58] Advertising Industry - The overall advertising market expenditure increased by 4.3% year-on-year in the first ten months of 2025, with a significant rise of 10.6% in October [3][4]

Investment Rating - The report maintains a "Buy" rating for the media industry, indicating a positive outlook for the sector [7]. Core Insights - The media industry (Shenwan) saw a weekly increase of 0.26%, ranking 8th among industries during the period from December 6 to December 12, 2025. Notable performers included Bona Film Group, Guangxi Radio and Television, Beijing Culture, Sanrenxing, and Huace Film & TV [11][18]. - The report highlights strong performance in AI applications and cultural exports, with a focus on sub-sectors such as gaming, intellectual property (IP), short dramas, and publishing [5][37]. Summary by Sections Market Performance - The media industry experienced a weekly increase of 0.26%, while the Shanghai Composite Index fell by 0.34%. The gaming sector saw a rise of 1.06%, and the film and television sector increased by 5.70% [11][12]. Key Industry Data AI Applications - In November, Deepseek led domestic AI web traffic with 346 million visits, despite a 2.95% month-over-month decline. Other notable AI products included Nano AI Search and Baidu AI Search, with respective monthly visits of 260 million and 52.63 million [22][23]. Gaming - The iOS gaming sales chart for December 13, 2025, was topped by "Honor of Kings," followed by "Gold Shovel Battle" and "Endless Winter." The report also noted that "Whiteout Survival" and "Kingshot" continued to perform strongly in overseas revenue [25][26]. Film - The total box office for the week of December 6-12 was 1.2 billion yuan, with "Zootopia 2" leading at 853 million yuan, accounting for 71% of the weekly total. Upcoming films include "Avatar: Fire and Ashes," set to release on December 19 [33][34]. Investment Recommendations - The report recommends focusing on themes such as AI applications and cultural exports, with specific attention to gaming, IP, short dramas, and publishing. Key companies to watch include Giant Network, Kaiying Network, Yaoji Technology, and others [5][37].

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]