Investment Ratings - The report maintains an "Overweight" (OW) rating on 37IE, an "Equal Weight" (EW) rating on G-bits, and an "Equal Weight" (EW) rating on Perfect World [1][3][4]. Core Insights - China's game industry has experienced high-teens percentage revenue growth year-to-date, surpassing the previous year's growth of 8%, indicating improved demand despite macroeconomic challenges [2]. - The report highlights successful new game releases and the stabilization of evergreen games as key factors driving the rebound in performance for 37IE, G-bits, and Perfect World [2][10]. Summary by Company 37IE - The price target is set at Rmb23.00, reflecting a 15x 2026 estimated P/E ratio, with an attractive 6% dividend yield [3][17]. - Anticipated revenue growth is supported by new titles such as "Soul Land," expected to generate Rmb300-500 million in its first month and Rmb1.5-2 billion overall in 2025 [16][17]. - The company has a robust pipeline with over 40 self-developed and licensed games, indicating sustained growth momentum [16][34]. Perfect World - The price target is raised to Rmb16.30, based on an 18x 2026 estimated P/E ratio, reflecting strong growth expectations driven by the anticipated title "Neverness to Everness" [4][29]. - The company is expected to see an 18% year-over-year revenue growth in 2025, with significant contributions from new titles [28][32]. - The release of "Zhuxian 2" on August 7 is also expected to be a key growth driver [4][31]. G-bits - The price target is increased to Rmb330, derived from a 15x 2026 estimated P/E ratio, reflecting a busy 2025 but a slower 2026 due to a weaker pipeline [5][22]. - Revenue growth is projected at 22% and 29% quarter-over-quarter and year-over-year in 2Q25, driven by new titles [20][22]. - The company is expected to experience alternating busy and slow product years, with 2025 being particularly strong [18][22].

Macro News - The Central Committee of the Communist Party of China emphasizes strict punishment for financial crimes such as market manipulation, insider trading, illegal fundraising, loan fraud, and money laundering to promote healthy financial market development [1][5] - The People's Bank of China (PBOC) will conduct a 14 trillion yuan reverse repurchase operation on July 15, 2025, to maintain ample liquidity in the banking system, with 8 trillion yuan for 3-month operations and 6 trillion yuan for 6-month operations [3][6] - In the first half of 2025, the total social financing increased by 22.83 trillion yuan, with new loans amounting to 12.92 trillion yuan, and M2 growth of 8.3% year-on-year [4][6] Company News - China Eastern Airlines expects a net loss of 12 billion to 16 billion yuan for the first half of 2025 [12] - Greenland Holdings anticipates a net loss of 30 billion to 35 billion yuan for the first half of 2025 [13] - Longi Green Energy expects a net loss of 24 billion to 28 billion yuan for the first half of 2025, although it represents a reduction in losses compared to the previous year [13] - Perfect World anticipates a net profit of 4.8 billion to 5.2 billion yuan for the first half of 2025, marking a turnaround from losses [17] - Wen Tai Technology expects a net profit increase of 178% to 317% year-on-year for the first half of 2025 [18] - China Rare Earth anticipates a net profit of 136 million to 176 million yuan for the first half of 2025, indicating a return to profitability [21] Investment Opportunities - The Robotaxi industry is expected to experience rapid growth due to technological advancements and supportive policies, with 2025 projected as a year of mass production [29] - The solid-state battery market is anticipated to see significant growth, with expectations for small-scale production by 2027 and larger-scale shipments by 2030, driven by increasing demand for high-performance batteries [30] - The humanoid robot market is projected to grow significantly, with a record order of 124 million yuan for humanoid robot manufacturing services, indicating strong market potential [31] - The successful production of the first barrel of uranium from China's largest natural uranium production project is expected to enhance the country's energy resource security and influence in uranium resource development [32]

Major Events - Zhonghua Equipment plans to acquire 100% equity of Yiyang Rubber and Plastic Machinery Group and Beihua Machinery, with stock suspension starting July 15, 2025 [3] - Suzhou Planning intends to purchase 100% equity of Dongjin Aerospace through a combination of cash and stock issuance, with stock resuming trading on July 15, 2025 [4] - Aerospace Development's independent director was detained for personal reasons unrelated to the company's operations, which remain stable [5][6] - *ST Tianmao issued a risk warning regarding potential delisting due to failure to disclose annual reports in time [7] - ST Shuntian will suspend trading for one day on July 15, 2025, and will remove other risk warnings, changing its stock name to Jiangsu Shuntian [8] - Xinghui Entertainment plans to transfer 99.66% equity of Espanyol Football Club for €130 million, focusing on core business areas [9] Performance Reports - China Salt Chemical reported a 5.76% decrease in revenue to ¥5.998 billion and an 88.04% drop in net profit to ¥52.71 million for the first half of 2025 [10] - Jiu Gui Jiu expects a net profit of ¥8 million to ¥12 million, down 90.08% to 93.39% year-on-year, with revenue around ¥560 million, a 43% decline [11] - Suli Co. anticipates a net profit of ¥72 million to ¥86 million, up 1008.39% to 1223.91% year-on-year, driven by increased sales and prices [12] - Te Yi Pharmaceutical expects a net profit of ¥34 million to ¥38 million, a growth of 1164.22% to 1312.95% year-on-year, due to strong sales of its core product [13] - Huahong Technology forecasts a net profit of ¥70 million to ¥85 million, up 3047.48% to 3721.94% year-on-year, benefiting from improved market conditions [14] - Qianfang Technology expects a net profit of ¥150 million to ¥200 million, an increase of 1125.99% to 1534.65% year-on-year, influenced by fair value changes of equity instruments [15] - Huaxia Airlines anticipates a net profit of ¥220 million to ¥290 million, up 741.26% to 1008.93% year-on-year, due to improved flight demand [16] - Xianfeng Holdings expects a net profit of ¥34 million to ¥42 million, a growth of 524.58% to 671.53% year-on-year, mainly from non-recurring gains [17] - Xinyi Sheng expects a net profit of ¥370 million to ¥420 million, up 327.68% to 385.47% year-on-year, driven by AI-related investments [18] - Haili Co. anticipates a net profit of ¥30.5 million to ¥36 million, a growth of 625.83% to 756.71% year-on-year, due to improved sales [19] - Hengsheng Electronics expects a net profit of approximately ¥251 million, an increase of about 740.95% year-on-year, due to significant non-recurring gains [20] - Tianqi Lithium expects a net profit of ¥0 to ¥155 million, recovering from a loss of ¥5.206 billion in the previous year [21] - Shui Jing Fang forecasts revenue of ¥1.498 billion, down 12.84%, and a net profit of ¥105 million, down 56.52% [22] - CICC expects a net profit of ¥3.453 billion to ¥3.966 billion, an increase of 55% to 78% year-on-year [23] - Shenwan Hongyuan anticipates a net profit of ¥4.1 billion to ¥4.5 billion, a growth of 92.66% to 111.46% year-on-year [24] - Xinda Securities expects a net profit of ¥921 million to ¥1.044 billion, an increase of 50% to 70% year-on-year [25] - Shanxi Securities anticipates a net profit of ¥504 million to ¥544 million, a growth of 58.17% to 70.72% year-on-year [26] - Guohai Securities expects a net profit of ¥370 million, a growth of 159.26% year-on-year [27] - Guocheng Mining anticipates a net profit of ¥493 million to ¥548 million, a growth of 1046.75% to 1174.69% year-on-year [28] - China Rare Earth expects a net profit of ¥136 million to ¥176 million, recovering from a loss of ¥244 million [29] - Perfect World anticipates a net profit of ¥480 million to ¥520 million, recovering from a loss of ¥177 million [30] - Fangda Carbon expects a net profit of ¥50 million to ¥60 million, down 65.13% to 70.93% year-on-year [31] - Huanghe Xuanfeng expects a net loss of ¥285 million [32] - JA Solar anticipates a net loss of ¥2.5 billion to ¥3 billion, worsening from a loss of ¥874 million [33] - Shanxi Black Cat expects a net loss of ¥490 million to ¥540 million [34] - Ganfeng Lithium anticipates a net loss of ¥300 million to ¥550 million, improving from a loss of ¥760 million [35] - Xinda Real Estate expects a net loss of ¥3.5 billion to ¥3.9 billion [36] - Greenland Holdings anticipates a net loss of ¥3 billion to ¥3.5 billion [37] - Air China expects a net loss of ¥1.7 billion to ¥2.2 billion [39] - OFILM expects a net loss of ¥85 million to ¥115 million [40] - Vanke A expects a net loss of ¥10 billion to ¥12 billion [41] Major Contracts - Zhongchen Co. won a project from Southern Power Grid worth ¥379 million, accounting for 12.26% of its 2024 audited revenue [42] - Gaode Infrared signed a procurement agreement worth ¥879 million, representing 32.84% of its 2024 audited revenue [43]

Core Insights - The 2025 BiliBili World Digital Entertainment Anime Culture Expo (BW2025) took place from July 11 to July 13 at the National Exhibition and Convention Center in Shanghai, attracting 400,000 attendees, a 60% increase from the previous year [1][3] - The event featured 167 global exhibitors and showcased a variety of popular games and anime culture, drawing significant international participation from 20 countries and regions, with 13% of ticket buyers being passport holders [1][3] Group 1: Event Overview - BW2025 is the largest ACGN comprehensive exhibition in Asia, covering all 8 exhibition halls of the venue [1] - The event saw a notable increase in attendance, with 150,000 more visitors compared to 2024 [1] Group 2: International Participation - The expo attracted international fans, including attendees from countries such as Japan, South Korea, Russia, Brazil, Saudi Arabia, and Egypt [3] - Attendees expressed excitement about the event, highlighting the rarity of such large-scale anime activities in Europe [5] Group 3: Game Exhibitions - The gaming area occupied three halls, featuring popular titles like miHoYo's "Honkai: Star Rail" and Tencent's "Delta Action" [5][7] - The PlayStation experience area was particularly popular, with notable appearances from renowned game designers [7] Group 4: Cross-Industry Engagement - Non-ACGN exhibitors, such as the Macau Tourism Board and various food brands, participated in the event, engaging with the anime community through cross-industry collaborations [8] - Chow Tai Fook Jewelry Group highlighted the emerging opportunities in traditional industries due to the rise of the ACGN economy, showcasing their IP collaboration products [8][11] Group 5: Sales Performance - Chow Tai Fook's collaboration with the Palace Museum is projected to generate retail sales of approximately HKD 4 billion for the fiscal year 2025 [11] - The collaboration with the game "Black Myth: Wukong" has already surpassed RMB 150 million in retail sales within six months of launch [11]

Core Viewpoint - Multiple listed companies in the Shanghai and Shenzhen markets have announced significant changes in their financial forecasts and strategic decisions, indicating varied performance across different sectors in the first half of 2025 [1][3]. Company Announcements - Zhonghua Equipment plans to acquire 100% stakes in Yiyang Rubber and Plastic Machinery Group and Beihua Machinery, with stock suspension starting July 15, 2025, for up to 10 trading days [3]. - Jiugui Liquor expects a net profit decline of 90.08% to 93.39% in the first half of 2025, with projected revenue around 560 million yuan, a decrease of approximately 43% year-on-year [5]. - Suli Co. anticipates a net profit increase of 1008.39% to 1223.91%, with expected profits between 72 million and 86 million yuan, driven by improved market conditions [6]. - Te Yi Pharmaceutical forecasts a net profit growth of 1164.22% to 1312.95%, with profits expected between 34 million and 38 million yuan, supported by strong sales of its core product [7]. - Huahong Technology predicts a net profit increase of 3047.48% to 3721.94%, with expected profits between 70 million and 85 million yuan, benefiting from rising rare earth product prices [8]. - Huaxia Airlines expects a net profit increase of 741.26% to 1008.93%, with profits projected between 220 million and 290 million yuan, due to improved demand for air travel [9]. - Xianfeng Holdings anticipates a net profit increase of 524.58% to 671.53%, with expected profits between 34 million and 42 million yuan, largely due to non-recurring gains [10]. - Xinyisheng expects a net profit increase of 327.68% to 385.47%, with profits projected between 370 million and 420 million yuan, driven by growth in AI-related investments [12]. - Hengsheng Electronics forecasts a net profit increase of approximately 740.95%, with expected profits around 251 million yuan, aided by significant non-recurring gains [13]. - CICC anticipates a net profit increase of 55% to 78%, with expected profits between 3.453 billion and 3.966 billion yuan, driven by growth in investment banking and wealth management [14]. - Xinda Securities expects a net profit increase of 50% to 70%, with profits projected between 921 million and 1.044 billion yuan, supported by improved asset management [15]. - Shanxi Securities forecasts a net profit increase of 58.17% to 70.72%, with expected profits between 504 million and 544 million yuan, driven by growth in wealth management and international business [16]. - Guocheng Mining anticipates a net profit increase of 1046.75% to 1174.69%, with expected profits between 493 million and 548 million yuan, primarily due to non-recurring gains from asset sales [17]. - China Rare Earth expects a net profit of 136 million to 176 million yuan, recovering from a loss of 244 million yuan in the previous year, aided by improved market conditions [18]. - Perfect World anticipates a net profit of 480 million to 520 million yuan, recovering from a loss of 177 million yuan, driven by successful game launches and esports growth [19]. - Huanghe Xuanfeng expects a net loss of 285 million yuan, impacted by intense competition and weak demand in the superhard materials sector [20][21]. - JA Solar forecasts a net loss of 2.5 billion to 3 billion yuan, worsening from a loss of 874 million yuan, due to industry-wide supply-demand imbalances [22]. - Shanxi Black Cat anticipates a net loss of 490 million to 540 million yuan, driven by declining sales and prices of its main products [23]. - Xinda Real Estate expects a net loss of 3.5 billion to 3.9 billion yuan, transitioning from profit to loss due to reduced project deliveries and impairment provisions [24]. Major Contracts - Zhongchen Co. won a project from Southern Power Grid worth 379 million yuan, representing 12.26% of its audited revenue for 2024 [26]. - Gaode Infrared signed a procurement agreement for a complete equipment system worth 879 million yuan, accounting for 32.84% of its 2024 audited revenue, expected to positively impact this year's performance [27].

Market Performance - The short drama game concept declined by 1.89%, ranking among the top declines in the concept sector, with stocks like Yuanlong Yatu hitting the limit down, and *ST Zitian, Huanrui Century, and Zhongke Jincai also experiencing significant declines [1] - In contrast, the PEEK materials concept saw an increase of 3.87%, leading the gains among concept sectors [1] Fund Flow - The short drama game concept experienced a net outflow of 1.241 billion yuan, with 44 stocks seeing net outflows, and 8 stocks having outflows exceeding 50 million yuan [1] - Zhongke Jincai led the outflows with a net outflow of 184.43 million yuan, followed by Zhongwen Online and Zhejiang Wenlian with outflows of 131 million yuan and 125.8 million yuan respectively [1] Notable Stocks - Stocks with the highest gains included Huayang International, which rose by 4.73%, *ST Tianze by 1.69%, and Yinsai Group by 1.54% [1][3] - Stocks with the highest net outflows included Zhongke Jincai, which fell by 8.70%, and Zhongwen Online, which decreased by 3.68% [1][2]

Core Viewpoint - Perfect World Co., Ltd. has reported a turnaround in its financial performance for the first half of 2025, projecting a net profit of between 480 million to 520 million yuan, compared to a loss in the same period last year [1][2]. Financial Performance - The company expects to achieve a net profit attributable to shareholders of 480 million to 520 million yuan and a net profit excluding non-recurring items of 290 million to 330 million yuan for the first half of 2025, marking a significant recovery from last year's losses of 177.86 million yuan and 235.40 million yuan respectively [2][3]. - Basic earnings per share are projected to be between 0.25 yuan and 0.27 yuan, a recovery from a loss of 0.09 yuan per share in the previous year [3]. Key Drivers of Performance - The turnaround is primarily attributed to the successful launch of the self-developed MMORPG "Zhu Xian World," which was released in December 2024, contributing positively to the company's revenue in the first half of 2025 [2][3]. - The esports segment has shown steady growth, supported by high-quality and frequent events, continuing to contribute stable revenue [3]. - Cost reduction and efficiency improvement measures implemented by the company have begun to yield positive results [3]. Future Prospects - Upcoming game releases include the supernatural urban open-world RPG "Yihuan," which has begun testing in both domestic and overseas markets, and the JRPG "Persona: Nightshade," which has received positive feedback in various international markets [6][8]. - The MMORPG sequel "Zhu Xian 2" is scheduled for public release on August 7, 2025, which is expected to strengthen the company's position in this genre [8]. Other Business Segments - The film and television segment is projected to achieve a net profit of approximately 40 million yuan, with a net profit of around 20 million yuan after excluding non-recurring items for the first half of 2025 [8].

Group 1 - The core viewpoint of the article indicates that Perfect World is expected to turn a profit in the first half of 2025, with a projected net profit attributable to shareholders ranging from 480 million to 520 million yuan, compared to a loss of 177 million yuan in the same period last year [1] Group 2 - The company anticipates a significant improvement in financial performance, marking a turnaround from previous losses [1] - The expected net profit range reflects a positive shift in the company's operational efficiency and market conditions [1] - The previous year's loss highlights the challenges faced by the company, which it aims to overcome in the upcoming financial period [1]

Core Viewpoint - Perfect World (002624) is expected to turn a profit in the first half of 2025, with a projected net profit attributable to shareholders ranging from 480 million to 520 million yuan, compared to a loss of 177 million yuan in the same period last year [1] Financial Performance - The company anticipates a significant improvement in financial performance, moving from a loss of 177 million yuan in the previous year to a net profit of 480 million to 520 million yuan in 2025 [1]

[Performance Forecast Overview](index=1&type=section&id=Item%201.%20Current%20Period%20Performance%20Forecast) The company anticipates a significant turnaround in the first half of 2025, projecting substantial net profit after a prior-year loss [Core Financial Indicators Forecast](index=1&type=section&id=1.%20Performance%20Forecast%20Period) The company projects H1 2025 net profit attributable to shareholders between 480 million and 520 million yuan, a significant improvement from the prior year's loss H1 2025 Performance Forecast | Indicator | H1 2025 Forecast | Prior Year Same Period | | :--- | :--- | :--- | | **Net Profit Attributable to Shareholders of Listed Company** | Profit: 480 million – 520 million yuan | Loss: 17.68602 million yuan | | **Net Profit After Deducting Non-Recurring Gains and Losses** | Profit: 290 million – 330 million yuan | Loss: 23.54045 million yuan | | **Basic Earnings Per Share** | Profit: 0.25 – 0.27 yuan/share | Loss: 0.09 yuan/share | - The company expects to achieve a turnaround in performance for the first half of 2025[3](index=3&type=chunk) [Reasons for Performance Change and Business Outlook](index=1&type=section&id=Item%203.%20Explanation%20of%20Performance%20Changes) Performance growth is primarily driven by strong gaming and stable film/television business, supplemented by significant non-recurring gains [Overall Performance Drivers](index=1&type=section&id=Item%203.%20Explanation%20of%20Performance%20Changes) The company's performance improvement is largely due to robust gaming and stable film/television segments, alongside substantial non-recurring income - Non-recurring gains for the reporting period are estimated at approximately **190 million yuan**, mainly from the disposal of Chenfeng Studio in Q1 2025 and government subsidies[5](index=5&type=chunk) [Segment Performance and Outlook](index=2&type=section&id=1.%20Gaming%20Business) The company's core gaming business achieved a significant turnaround, contributing the majority of profits, while the film and television business also became profitable [Gaming Business](index=2&type=section&id=1.%20Gaming%20Business) The gaming business achieved a significant profit turnaround, driven by new game launches, esports growth, and effective cost-efficiency measures Gaming Business Performance Forecast | Business Segment | Net Profit Attributable to Parent (Forecast) | Net Profit After Deducting Non-Recurring Gains and Losses (Forecast) | | :--- | :--- | :--- | | **Gaming Business** | 480 million to 520 million yuan | 320 million to 360 million yuan | - Performance growth is primarily attributed to the launch of the new PC game "Jade Dynasty World," year-over-year growth in esports revenue, and effective cost reduction and efficiency improvement measures[6](index=6&type=chunk)[7](index=7&type=chunk) - Future outlook includes focusing on advantageous categories, steadily launching new games such as "Ethereal," "Persona 5: The Phantom X" (overseas), and "Jade Dynasty 2" (scheduled for August 7), and planning to host the CS Asia Invitational (CAC 2025) in October 2025[7](index=7&type=chunk)[8](index=8&type=chunk) [Film and Television Business](index=2&type=section&id=2.%20Film%20and%20Television%20Business) The film and television business achieved profitability by adhering to a "quality over quantity" strategy, with several new series aired and future projects in development Film and Television Business Performance Forecast | Business Segment | Net Profit Attributable to Parent (Forecast) | Net Profit After Deducting Non-Recurring Gains and Losses (Forecast) | | :--- | :--- | :--- | | **Film and Television Business** | Approximately 40 million yuan | Approximately 20 million yuan | - The company adheres to a strategy of high-quality content and "quality over quantity," with several platform-customized dramas aired in the first half of the year[8](index=8&type=chunk) - The company has reserved works such as "Night is Thick" and "The Lark Sings to the Sky," and continues to expand into the short-form drama segment[8](index=8&type=chunk) [Other Matters](index=1&type=section&id=Item%202.%20Communication%20with%20Accounting%20Firm) The company has pre-communicated its performance forecast with its accounting firm, with no major disagreements, but reminds investors of the preliminary nature of the data [Communication with Accountants and Risk Warning](index=1&type=section&id=Item%202.%20Communication%20with%20Accounting%20Firm) The company has pre-communicated its performance forecast with its accounting firm, with no significant disagreements, but advises investors that the data is preliminary and unaudited - The company has pre-communicated the performance forecast with its accounting firm, with no significant disagreements, but this performance forecast has not been pre-audited by a certified public accountant[4](index=4&type=chunk) - The above data represents preliminary estimates by the company's financial department; specific figures will be detailed in the 2025 semi-annual report, and investors are advised to exercise caution regarding investment risks[9](index=9&type=chunk)