Core Viewpoint - Internet advertising platforms are reportedly extending the actual playback time of ads beyond the indicated duration, effectively "stealing" users' time [1][3][20]. Group 1: Findings from Video Platforms - A survey by Hongxing Capital found that platforms like Youku, Mango TV, and iQIYI have ads that play longer than the time displayed [3][20]. - On Youku, an ad marked as 119 seconds actually played for 123 seconds, resulting in a 4-second discrepancy [5][7]. - Mango TV's ad labeled as 80 seconds played for 83 seconds, leading to a 3-second overrun [8][10]. - iQIYI's ad marked as 120 seconds played for 123 seconds, indicating a 2-3 second excess [12][14]. Group 2: Responses from Platforms - Customer service from Youku acknowledged the issue but did not provide a clear resolution [7]. - Mango TV claimed that the discrepancy was due to loading and buffering times, asserting that the ad duration was aligned with the actual content [11]. - iQIYI's response suggested that users should rely on the front-end display, without addressing the timing issue directly [17]. Group 3: Legal Interpretations - Legal experts argue that the misrepresentation of ad durations constitutes false advertising and violates consumer protection laws [20][21]. - The discrepancy in ad timing can mislead consumers regarding the effective duration of the advertisement, infringing on their rights [21][22]. - The lack of clear units (like "seconds") in the countdown may lead to consumer confusion, further complicating the legal standing of these practices [22][23].

Investment Rating - The report maintains a "Buy" rating for the media industry, highlighting potential growth driven by AI applications [4][8]. Core Insights - The integration of AI is expected to enhance the commercial value of cultural media internet applications, with a continuous upward trend in AI development from hardware to applications [3][14]. - The Chinese government has launched initiatives to implement "Artificial Intelligence +" actions, aiming for over 90% penetration of new intelligent terminals and applications by 2030, which will support the iteration of AI models and applications in enterprises [3][14]. - Key companies in the media sector are recommended for investment, including Oriental Pearl, Mango Super Media, BlueFocus, Wanda Film, and others, with specific growth drivers identified for each [4][8]. Summary by Sections Industry Review - The media sector has shown significant performance, with the media index rising by 72.7% over the past 12 months, outperforming the CSI 300 index [1][3]. - The report notes a recovery in the film industry, with the summer box office reaching 11.966 billion yuan, surpassing the previous year's total [28]. Key Company Recommendations - Companies such as Oriental Pearl (600637), Mango Super Media (300413), and BlueFocus (300058) are highlighted for their potential growth in the AI-driven market [4][8]. - Specific forecasts for earnings per share (EPS) and price-to-earnings (PE) ratios are provided for various companies, indicating strong growth prospects [8]. AI and Technology Trends - The report emphasizes the importance of AI in driving new business models and applications, particularly in the fields of digital marketing and content creation [14][18]. - The upcoming Alibaba Cloud Summit is expected to showcase advancements in AI technology and its applications across various sectors [14]. Market Dynamics - The report discusses the evolving landscape of e-commerce and digital marketing, with companies like Alibaba and JD.com leveraging AI to enhance user experience and operational efficiency [25][26]. - The gaming sector is also highlighted, with Tencent's integration of social media and gaming platforms indicating a trend towards deeper user engagement [24]. Future Outlook - The report anticipates continued growth in the media sector, driven by AI innovations and supportive government policies, with a focus on companies that are well-positioned to capitalize on these trends [3][4][14].

Market Performance - On September 5, the digital media sector rose by 2.7%, with Mango Excellent Media leading the gains [1] - The Shanghai Composite Index closed at 3812.51, up 1.24%, while the Shenzhen Component Index closed at 12590.56, up 3.89% [1] Stock Performance - Mango Excellent Media (300413) closed at 27.33, with a gain of 7.47% and a trading volume of 391,900 shares, amounting to a transaction value of 1.042 billion yuan [1] - Other notable stocks included Worth Buying (300785) with a closing price of 34.22, up 2.79%, and FanTuo Digital (301313) at 25.86, up 2.13% [1] Capital Flow - The digital media sector saw a net inflow of 88.319 million yuan from institutional investors, while retail investors contributed a net inflow of 4.2659 million yuan [1] - Notably, retail investors withdrew 92.5849 million yuan from the sector [1] Individual Stock Capital Flow - Mango Excellent Media experienced a net inflow of 107 million yuan from institutional investors, but saw a net outflow of 39.4738 million yuan from speculative funds [2] - Wind Language (603466) had a net inflow of 8.7908 million yuan from institutional investors, while speculative funds contributed a net inflow of 371.89 thousand yuan [2]

Core Insights - The China Securities Index for online consumption (931481) has shown a strong increase of 1.45% as of September 5, 2025, with notable gains in constituent stocks such as China Film (600977) up by 10.04% and Giant Network (002558) up by 8.14% [1] - The online consumption ETF (159793) has risen by 2.71%, currently priced at 1.06 yuan, and has accumulated a 5.62% increase over the past month [1] - The ETF is positioned as an AI application ETF, closely tracking the online consumption index, which is expected to benefit from the explosion of AI applications [1] - The current price-to-earnings ratio (PE-TTM) of the online consumption ETF is 22.7, indicating it is at a historical low, being below 84.38% of the time over the past five years [1] Company and Industry Summary - The top ten weighted stocks in the online consumption index account for 51.84% of the total index, with Tencent Holdings (00700) and Alibaba-W (09988) being the largest contributors [2] - The performance of the top ten stocks includes Tencent Holdings up by 2.11% and Alibaba-W up by 1.00%, while JD Health (06618) has decreased by 1.48% [4] - The index includes companies involved in online shopping, digital entertainment, online education, and telemedicine, reflecting the overall performance of online consumption-related companies in the mainland and Hong Kong markets [1]

Market Overview - On September 4, the digital media sector declined by 1.28%, with *ST Fanli leading the drop [1] - The Shanghai Composite Index closed at 3765.88, down 1.25%, while the Shenzhen Component Index closed at 12118.7, down 2.83% [1] Stock Performance - Notable stock performances included: - 365.com (300295) closed at 13.42, up 1.59% with a trading volume of 66,500 shares [1] - ZhiDeMai (300785) closed at 33.29, up 1.49% with a trading volume of 156,900 shares [1] - ChuanWang Media (300987) closed at 17.78, up 0.97% with a trading volume of 44,100 shares [1] - *ST Fanli (600228) closed at 4.71, down 5.04% with a trading volume of 174,500 shares [2] Capital Flow - The digital media sector experienced a net outflow of 154 million yuan from institutional investors, while retail investors saw a net inflow of 190 million yuan [2] - The capital flow for individual stocks showed: - ZhiDeMai had a net outflow of 13.93 million yuan from institutional investors [3] - *ST Fanli had a significant net outflow of 18.63 million yuan from institutional investors, with a 22.49% net outflow ratio [3] - Retail investors contributed a net inflow of 864.71 million yuan to *ST Fanli [3]

Group 1 - The core viewpoint of the report indicates that the online video industry is experiencing significant growth, with active user numbers projected to reach 815 million by July 2025 [1] - Major platforms such as Tencent Video, iQIYI, Mango TV, and Youku Video have substantial monthly active user bases of 365 million, 358 million, 284 million, and 202 million respectively [1] - The report highlights two major trends in the drama and variety show market for 2025: content premiumization and the shortening of series length [1] Group 2 - In terms of content premiumization, the top four platforms have released a total of 157 new series from January to July this year, marking a year-on-year increase of 12.9% [1] - The proportion of exclusive dramas on these platforms has significantly increased, with iQIYI, Tencent Video, Youku Video, and Mango TV having exclusive drama shares of 78.8%, 78.5%, 87.5%, and 71.4% respectively, exceeding last year's figures by over 20 percentage points [1] - The trend of shortening series is evident, with the majority of series falling within the 21 to 40 episode range, and popular genres being romance, crime, and workplace dramas, accounting for 49.2%, 19.9%, and 11.5% of viewership respectively [1] Group 3 - The competition in the short drama segment is intensifying, with Tencent Video, iQIYI, Mango TV, and Youku Video releasing 88, 64, 44, and 7 new short dramas respectively from January to July, showing year-on-year changes of 1.1%, 156%, 2.2%, and -74% [2] - iQIYI has notably increased its short drama offerings by 39 compared to last year, while Youku Video has decreased its output by 20 [2] - Advertising remains a crucial revenue source for online video platforms, with the number of advertisers for new series on the app platforms being 146 for iQIYI, 131 for Youku Video, 119 for Tencent Video, and 88 for Mango TV [2]

Revenue and Profit Decline - In the first half of the year, the company achieved operating revenue of 5.964 billion yuan and a net profit attributable to shareholders of 0.763 billion yuan, representing year-on-year declines of 14.31% and 28.31% respectively, with a fully diluted EPS of 0.41 yuan [1] - In Q2 2025, the company reported revenue of 3.063 billion yuan and a net profit of 0.385 billion yuan, down 15.74% and 35.09% year-on-year [1] - The decline in revenue is primarily due to the contraction of the traditional TV shopping business, while the drop in net profit is attributed to increased investments in top-tier film and television content, ecological layout, and technology applications [1] Core Platform Performance - In the first half of the year, Mango TV's internet video business generated revenue of 4.882 billion yuan, a slight year-on-year decline of 1.5%, maintaining overall stability; the average monthly active users increased by 14.24% year-on-year, and the average daily usage time per user remains among the industry leaders [1] - Membership revenue reached 2.496 billion yuan, continuing to grow; advertising revenue was 1.587 billion yuan, showing significant recovery compared to the first quarter but still facing considerable pressure [1] - The operator business revenue was 0.8 billion yuan, marking a year-on-year increase of 7%, recovering after a significant decline in 2024 due to industry governance factors [1] Content Ecosystem Development - The variety shows continue to maintain industry-leading advantages, with Mango TV's variety show effective playback volume ranking first in the industry [2] - The show "Singer 2025" innovatively combines vertical and horizontal screen viewing modes, achieving over 90 million total interactive live sessions; "Riding the Wind 2025" broke the traditional studio recording mode by setting the stage outdoors, with peak monthly playback volume increasing by over 30% compared to the previous season [3] - In terms of drama series, effective playback volume for Mango TV's dramas increased by 69% year-on-year, with "The National Color of Elegance" achieving an average playback volume exceeding 40 million; the company has a reserve of nearly 100 dramas, and the latest policies from industry regulators are expected to support the production of more high-quality hit dramas [3] - The strategy for micro-short dramas is accelerating, with 1,179 micro-short dramas launched under the Big Mango plan, a nearly 7-fold increase year-on-year; the self-produced horizontal short drama "Jiang Song" topped the short drama effective playback ranking in May [3]

Investment Rating - The report maintains an "Accumulate" rating for the company [4] Core Views - The company's popular variety IP matrix continues to expand, and the expected new broadcasting policies are anticipated to have a long-term positive impact on the industry, leading to a gradual recovery in ROI. The projected net profits for the company from 2025 to 2027 are estimated at 1.557 billion, 1.831 billion, and 1.993 billion yuan respectively, with a target price of 31.36 yuan based on a 32x PE for 2026 [2][4] Financial Performance Summary - The company's revenue for the first half of 2025 was 5.96 billion yuan, a year-on-year decrease of 14.3%, primarily due to a decline in traditional e-commerce. The gross margin was 26.6%, down 2.3 percentage points, mainly due to increased content investment in dramas. The net profit attributable to the parent company was 760 million yuan, a year-on-year decrease of 28.3%, driven by rising costs from platform content and R&D investments [9] - The company’s membership revenue for the first half of 2025 was 2.5 billion yuan, a slight increase of 0.4% year-on-year, supported by the successful airing of major dramas [9] - The advertising revenue for the first half of 2025 was 1.59 billion yuan, down 7.8% year-on-year, although there was a noticeable recovery in the second quarter compared to the first [9] Future Outlook - The new broadcasting policies are expected to enhance the investment return rates for long dramas, with anticipated benefits including shortened approval cycles and increased content creation flexibility. The company is expected to launch new projects that will take 1-2 quarters to reflect in performance [9] - The upcoming new program "Voice of the Future" is expected to drive a recovery in advertising revenue, with the program set to feature a unique format that combines various musical styles [9]

Core Insights - The long video platforms are facing challenges with revenue growth slowing down and profitability becoming more difficult, prompting a shift towards optimizing content costs and exploring new revenue sources like micro-short dramas, AIGC, IP derivatives, and content globalization [37] Industry Overview - Long video platforms are entering a new phase of project reduction and AI efficiency improvements due to stagnation in membership growth and weak advertising revenue [1][5] - The rise of short videos has significantly impacted the user base of long video platforms, with monthly active users (MAU) for Tencent Video, iQIYI, and Youku projected to drop from 5.3 billion, 5.65 billion, and 4.7 billion in August 2018 to 3.63 billion, 3.56 billion, and 2.01 billion by June 2025, respectively [3] Company-Specific Insights iQIYI - iQIYI reported a decline in revenue and net profit in the first two quarters, with major business segments like membership services and online advertising also experiencing downturns, although other income streams showed growth [7] - The platform is focusing on a balanced approach between long and short content, emphasizing high-quality productions to enhance user engagement and attract advertisers [15] - iQIYI's international membership revenue grew by 35% year-on-year, and the company is leveraging AI to reduce costs and enhance efficiency [13] Youku - Youku's strategy centers on content quality, series development, and cross-industry integration, with successful shows like "藏海传" achieving significant viewership and advertising revenue [16][19] - The platform is expanding its talent pool by recruiting notable industry figures to enhance content creation capabilities [19] Tencent Video - Tencent Video reported a paid membership count of 111.4 million, the only platform to disclose such figures, and is focusing on high-quality content to improve viewer retention [22] - The platform is shifting its strategy to prioritize A+ and S+ level projects, aiming to enhance the return on investment and avoid resource wastage [25] Mango TV - Mango TV's revenue for the first half of 2025 was 5.964 billion yuan, a decline of 14.31%, with significant drops in its content e-commerce segment [29][32] - The platform is increasing its investment in content, particularly in short dramas, with a reported 1179 micro-short dramas set to launch, marking a nearly sevenfold increase from the previous year [36]

Group 1 - Mango TV has partnered with Huawei to develop a native HarmonyOS-based in-car application ecosystem, enhancing the HarmonyOS native application ecosystem [2] - The collaboration will focus on optimizing video application experiences, technological innovations, and building the HarmonyOS cockpit ecosystem [2] - The goal is to provide smart car users with richer content, smarter interactions, and a more immersive high-quality audio-visual entertainment service [2]