Core Insights - The National Press and Publication Administration released the approval information for domestic online games in August 2025, with a total of 166 domestic game licenses issued, indicating a growing trend towards multi-platform products [1][2]. Domestic Game Licenses - Out of the 166 domestic game licenses, 163 are for mobile games, 19 for client games, and 1 for console games. Additionally, 17 games received licenses for both mobile and client categories, highlighting the increasing trend of multi-platform products [1]. - A total of 1,050 domestic game licenses have been issued in 2025 as of August, with the monthly approval numbers showing a phase of growth, reaching a new high this month [2]. Imported Game Licenses - A new batch of 7 imported game licenses was also released, with 6 for mobile and 3 for client games. The frequency of issuing imported game licenses has changed from bi-monthly to monthly, maintaining relative stability without significant growth [4]. - Notable imported games include Tencent's "Kaeas Dreamland," developed by the SUPER CREATIVE team under South Korea's Smilegate, which will be co-operated by Tencent Games and Xiaoming Taiji [7]. Notable Games and Developers - Key domestic games approved include titles from major developers such as NetEase, Bilibili, and 37 Interactive Entertainment, with games like "Tianxia: Wanxiang" and "Escape from Duckkov" among the highlights [6]. - For imported games, Tencent's "Kaeas Dreamland" and other titles from companies like Shengqu and Bilibili are noteworthy, showcasing a mix of local and international collaborations [7].

Investment Rating - The report maintains a "Buy" rating for Bilibili-W (09626) [8] Core Insights - Bilibili achieved a revenue of 7.34 billion yuan in Q2 2025, representing a year-on-year growth of 20%, slightly exceeding Bloomberg consensus expectations [2] - The adjusted net profit attributable to shareholders was 560 million yuan, with a profit margin of 7.7%, marking a turnaround from losses in the previous year and surpassing Bloomberg consensus by 8% [2] - User growth remains strong, with a monthly active user (MAU) count of 363 million, up 8% year-on-year, and daily active users (DAU) at 109 million, up 7% [8] - Advertising revenue in Q2 2025 reached 2.45 billion yuan, also up 20% year-on-year, with expectations for continued strong growth in the second half of the year [8] - The gaming segment reported revenue of 1.61 billion yuan, a significant increase of 60% year-on-year, driven by new game releases [8] - The value-added services segment generated 2.84 billion yuan in revenue, an 11% increase year-on-year, with a notable rise in membership subscriptions [8] - The gross margin for Q2 2025 was 36.5%, with a continuous improvement trend over the past 12 quarters [8] - The report projects adjusted net profits for 2025, 2026, and 2027 to be 2.45 billion, 3.28 billion, and 4.19 billion yuan respectively, reflecting an upward revision from previous forecasts [8] Financial Data and Profit Forecast - Revenue projections for Bilibili are as follows: - 2023: 22.53 billion yuan - 2024: 26.83 billion yuan - 2025E: 29.97 billion yuan - 2026E: 32.90 billion yuan - 2027E: 35.46 billion yuan [4] - The adjusted net profit forecast is as follows: - 2023: -3.43 billion yuan - 2024: -0.02 billion yuan - 2025E: 2.45 billion yuan - 2026E: 3.28 billion yuan - 2027E: 4.19 billion yuan [4] - Earnings per share (EPS) projections are: - 2023: -8.29 yuan - 2024: -0.05 yuan - 2025E: 5.83 yuan - 2026E: 7.80 yuan - 2027E: 9.96 yuan [4]

Group 1: 卓胜微 (300782 CH) - The company has shifted from profit to loss in 1H25, with revenue in 2Q25 at RMB 948 million, down 13% year-on-year, and losses of RMB 101 million and RMB 147 million for 2Q25 and 1H25 respectively [1] - Management expects cost pressure to approach its peak as production capacity increases, with signs of cost reduction and improved efficiency emerging [1] - Revenue forecasts for 2025 and 2026 have been lowered to RMB 4.17 billion and RMB 5.17 billion respectively, with EPS estimates adjusted to RMB 0.05 and RMB 1.15 [1] Group 2: 哔哩哔哩 (BILI US) - The company reported 2Q25 revenue of RMB 7.3 billion, a 20% year-on-year increase, with adjusted net profit of RMB 560 million, slightly above expectations [2] - Game revenue surged 60% year-on-year driven by the success of "三谋", while advertising revenue also grew by 20% due to increased traffic and AI technology applications [2] - The target price has been raised to USD 32, reflecting a potential upside of 34.7% [3] Group 3: 途虎 (9690 HK) - The company’s performance in the first half of 2025 met expectations, with revenue growth driven by improved market share and profit margins [6] - The target price has been adjusted to HKD 25, indicating a potential upside of 31.2% [6] - The company is expected to maintain double-digit revenue growth and stable profit margins despite industry uncertainties [6] Group 4: 先声药业 (2096 HK) - The company achieved a 15% revenue growth and a 21% increase in adjusted net profit in 1H25, driven by a 26% growth in innovative drug revenue [7][8] - Management has updated guidance for 2025-2027, expecting over 15% growth in revenue and adjusted net profit [8] - The target price has been raised to HKD 16.40, reflecting a positive outlook on the company’s growth trajectory [8] Group 5: 恒瑞医药 (1276 HK) - The company reported a 16% revenue growth in 1H25, with innovative drug sales growing over 25% [9][10] - The company plans to repurchase shares worth approximately RMB 10-20 billion, contingent on achieving specific sales growth targets [9] - The target price has been set at HKD 70.40, indicating a potential downside of 9.4% [10] Group 6: 速腾聚创 (2498 HK) - The company’s laser radar sales increased over sixfold year-on-year in 2Q25, with expectations for peak deliveries in the second half of the year [11][12] - The gross margin for the robot business reached 41.5%, contributing to an overall gross margin increase to 27.7% [12] - The target price is maintained at HKD 41.89, reflecting confidence in the company’s growth potential [12] Group 7: 亿纬锂能 (300014 CH) - The company’s battery shipments reached 50 GWh in the first half of 2025, a 46% year-on-year increase, with revenue growing 30% to RMB 28.2 billion [13][14] - Focus is on improving profitability in the energy storage segment, with expectations for recovery in margins [13] - The target price is set at RMB 56.51, indicating a potential upside of 16.5% [14] Group 8: 名创优品 (9896 HK) - The company’s revenue grew 21.1% year-on-year in the first half of 2025, with a 23.1% increase in 2Q25, exceeding previous guidance [15][16] - The management has raised the full-year revenue growth guidance to over 25% [16] - The target price has been increased to HKD 48.70, indicating a potential upside of 24.7% [16] Group 9: 李宁 (2331 HK) - The company reported a 3.3% revenue growth in the first half of 2025, with net profit declining 11% year-on-year [17][18] - Management maintains a cautious outlook for the third quarter, citing challenges in the operating environment [17] - The target price is set at HKD 16.28, reflecting a potential downside of 10.1% [18] Group 10: 友邦保险 (1299 HK) - The new business value grew 14% year-on-year, primarily driven by contributions from Hong Kong and Thailand [19][20] - The company aims for a compound annual growth rate of 40% in new business value from new regions between 2025 and 2030 [19] - The target price is maintained at HKD 84, indicating a potential upside of 14.4% [20] Group 11: 恒基地产 (12 HK) - The company’s revenue fell 18.8% year-on-year in the first half of 2025, with core net profit down 44.4% [21][22] - The target price has been adjusted to HKD 25.90, reflecting a cautious outlook on the company’s performance [22] - The rental income remained stable, with a slight decline of 2.8% [22] Group 12: 越秀服务 (6626 HK) - The company’s revenue remained stable with a 0.1% year-on-year increase, while net profit decreased by 13.7% [23][24] - The company maintains a high dividend payout ratio of 50% [23] - The target price has been slightly adjusted to HKD 4.20, indicating a potential upside of 38.2% [24] Group 13: 中国电力 (2380 HK) - The company’s profit increased by 0.7% year-on-year, outperforming market expectations [25][26] - The company plans to adjust its installation targets for wind and solar power due to new policies [25] - The target price has been slightly lowered to HKD 3.75, maintaining a buy rating [26]

Macro Commentary - The speech by Powell at the Jackson Hole central bank conference was more dovish than expected, interpreted by the market as a signal for a potential rate cut in September. However, two regional Fed presidents later tempered this optimism, indicating that the decision would depend on economic data [2][4]. - Inflation in the U.S. is expected to rebound in August, with a potential impact on the unemployment rate due to a decrease in immigrant labor. If inflation rises less than the unemployment rate, a rate cut in September is likely; otherwise, it may be postponed to October [2][4]. - The Fed is anticipated to cut rates again in December and potentially two more times in the following year [2][4]. Company Analysis Bilibili (BILI US) - Bilibili reported Q2 2025 earnings with total revenue of RMB 7.34 billion, a 20% year-on-year increase, meeting expectations. Adjusted net profit reached RMB 562 million, exceeding consensus estimates by 8% due to better-than-expected control of sales expenses [5]. - For Q3 2025, revenue growth is expected to slow to 4% year-on-year, primarily due to high base pressure from mobile gaming. However, advertising and value-added services are projected to remain resilient [5]. Weishijia (856 HK) - Weishijia's H1 2025 revenue grew by 14% to HKD 45.5 billion, driven by strong demand for AI computing, with cloud revenue increasing by 68% year-on-year. Net profit rose by 36% to HKD 649 million [5]. - The target price has been raised to HKD 14.2, reflecting the increased contribution from AI-related business [5]. CSPC Pharmaceutical Group (1093 HK) - CSPC reported H1 2025 total revenue of RMB 13.3 billion, with core revenue declining by 25% year-on-year. The management expects a rebound in product sales in H2 2025, with at least 5% quarter-on-quarter growth anticipated [6][7]. - The company has completed six external licensing deals since late 2024 and expects to finalize two more significant deals in H2 2025, each exceeding USD 5 billion [7][9]. Li Ning (2331 HK) - Li Ning's revenue for H1 2025 was RMB 14.8 billion, a 3% year-on-year increase, slightly above expectations. However, net profit fell by 11% to RMB 1.74 billion, reflecting challenges in retail sales and increased discounts [11][13]. - The company maintains its FY 2025 guidance, expecting stable sales growth and high single-digit net profit margins, despite pressures from inventory and promotional costs [10][11]. Binjiang Service (3316 HK) - Binjiang Service reported a 12.2% increase in net profit for H1 2025, with total revenue up 22.7%. The basic property management segment showed strong growth, benefiting from improved collection rates and property fee increases [14][16]. - The company aims to achieve a 70% dividend payout ratio and plans to pursue inclusion in the Hong Kong Stock Connect by FY 2026 [16]. Zhaosheng Microelectronics (300782 CH) - Zhaosheng Microelectronics reported Q2 2025 revenue of RMB 948 million, a 25% quarter-on-quarter increase but a 13% year-on-year decline, indicating ongoing weak demand and competitive pressures [17]. - The company has adjusted its revenue forecasts downwards for 2025 and 2026 due to persistent pricing pressures and lower-than-expected demand [17].

Group 1 - The core viewpoint of the article highlights the rapid growth and potential of the ACG (Anime, Comic, and Game) market in China, particularly focusing on the increasing engagement and spending of the Z generation on second-dimensional content [1][3][28] - In the past year, the fastest-growing categories on Xiaohongshu were ACG and gaming content, with year-on-year growth rates of 175% and 168% respectively, indicating a significant trend in user engagement [1] - The overall market size for the ACG sector is projected to reach 597.7 billion yuan by 2024, with the number of users expected to hit 503 million, nearly half of the total internet users in China [1][28] Group 2 - The Z generation, which constitutes a significant portion of the ACG user base, has a total disposable income of 13 trillion yuan, with 95% of them being ACG users who show a higher willingness to pay compared to the average [3][28] - The ACG content creation sector has established a robust profit model, with the market for comics growing from 300 million yuan in 2016 to 6.8 billion yuan in 2023, reflecting a compound annual growth rate of 56.2% [3][9] - The derivative market related to ACG has also seen substantial growth, with the market size increasing from 5.3 billion yuan in 2016 to 102.4 billion yuan in 2023, representing a compound annual growth rate of 52.7% [9] Group 3 - Platforms like Bilibili have reported significant revenue from ACG short dramas, with a monthly revenue exceeding 10 million yuan and a quarterly growth rate of nearly 140% [4] - Despite the growth in ACG content, Bilibili's derivative product revenue has been declining, with a drop from 5.1 billion yuan in Q1 2023 to 4.7 billion yuan in Q1 2025, indicating challenges in monetization [14][15] - The overall industry faces a structural contradiction of "hot traffic, cold conversion," as many platforms struggle to effectively monetize their ACG content despite high engagement [19][28] Group 4 - The offline retail sector has seen a revival due to ACG culture, with significant sales increases reported in various shopping malls, such as a 150% year-on-year increase in sales at Chengdu Tianfu Hong Mall [10] - The ACG market's growth has also led to increased tourism and event participation, with a notable rise in travel bookings during ACG-related events [10] - Major internet companies are increasingly investing in ACG, with platforms like Taobao and JD.com launching dedicated sections for ACG products, indicating a shift in focus towards this lucrative market [32]

Core Insights - Bilibili (NASDAQ: BILI, HKEX: 9626) reported a total revenue of RMB 73.4 billion for Q2 2025, marking a 20% year-over-year increase, and achieved an adjusted net profit of RMB 5.61 billion, compared to a net loss of RMB 2.71 billion in the same period of 2024 [2] - For the first half of 2025, Bilibili's total revenue reached RMB 143.4 billion, a 21.6% increase year-over-year, with an adjusted net profit of RMB 9.23 billion, reversing a net loss of RMB 7.27 billion from the previous year [2] - The growth in revenue was driven by various business segments, including a 20% increase in advertising revenue to RMB 24.5 billion, a 60% increase in gaming revenue to RMB 16.1 billion, and an 11% increase in value-added services revenue to RMB 28.4 billion [2] Business Performance - The gaming segment's growth was significantly attributed to the performance of the strategy game "Three Kingdoms: Strategize the World," which achieved a new high in daily active users following its anniversary update [2] - Bilibili's COO highlighted three core drivers of growth: improved conversion rates for performance advertising, AI technology enhancing ad distribution accuracy, and an optimized industry structure with significant growth in advertising revenue from key sectors [5] - The company reported a daily active user count of 109 million, an 8% increase year-over-year, and a monthly active user count of 363 million, a 9% increase year-over-year [5] Financial Metrics - Bilibili achieved a positive operating cash flow of RMB 19.9 billion in Q2 and completed a stock buyback of approximately USD 100 million to enhance shareholder returns [6] - As of June 30, 2025, the company held cash and cash equivalents totaling RMB 22.29 billion [6] - Despite the positive financial results, Bilibili's stock price fell by 6.1% to USD 23.76, attributed to revenue slightly missing market expectations [6] Future Outlook - The company plans to launch more multi-platform advertising products and strengthen AI-driven automated advertising tools to further enhance return on investment [5] - Bilibili's guidance for the second half of the year includes a projected 20% year-over-year increase in advertising revenue, while growth in value-added services is expected to be around 10% [6] - However, the company anticipates a potential high double-digit decline in online gaming revenue in the second half due to the high base effect from the previous year's launch of "Three Kingdoms: Strategize the World" [6]

Group 1 - Diversification is emphasized as crucial in the current market environment, particularly as stock market gains are largely driven by large-cap U.S. tech stocks, suggesting a need to rotate portfolios into under-recognized sectors [1] - Gary Alexander has extensive experience in technology, having worked on Wall Street and in Silicon Valley, and has been an adviser to seed-round startups, indicating a strong understanding of industry trends [1] Group 2 - The article highlights the importance of moving away from recent winners in the stock market to achieve better portfolio balance [1]

Core Viewpoint - The company reported a slight beat in 2Q25 Non-GAAP net profit, driven by lower-than-expected sales and R&D expenses, with revenue growth primarily from advertising and gaming sectors [1][2]. Financial Performance - 2Q25 revenue reached 7.338 billion yuan, a year-on-year increase of 19.8%, aligning with Bloomberg consensus (7.330 billion yuan) and internal expectations (7.321 billion yuan) [1]. - Non-GAAP net profit for 2Q25 was 562 million yuan, slightly above Bloomberg consensus (520 million yuan) and internal expectations (539 million yuan) [1]. - Advertising revenue grew by 20.2% year-on-year to 2.449 billion yuan, with a notable increase in eCPM [1]. - Gaming revenue surged by 60.1% year-on-year to 1.612 billion yuan, although a decline of 16-17% is expected in 2H25 due to high base effects [1][2]. Development Trends - The company is advised to focus on new game projects such as the繁中版 of "三谋", "代号：三国Ncard", "嘟嘟脸恶作剧", and self-developed "逃离鸭科夫", with revenue contributions anticipated from 4Q25 to 2026 [2]. - Value-added services revenue increased by 10.6% year-on-year to 2.837 billion yuan [2]. Profitability and Cost Management - 2Q25 gross margin improved by 0.2 percentage points to 36.5%, attributed to strong growth in performance advertising revenue and operational leverage [2]. - Sales and management expenses slightly decreased, while R&D expenses saw a modest increase, indicating cost control [2]. - The company expects gross margin to gradually rise to 37% by 4Q25, with long-term potential reaching 40-45% [2]. User Engagement - 2Q25 MAU, DAU, and average daily usage time all showed year-on-year growth, with DAU reaching 109 million [3]. - The company maintains a strong community attribute and user stickiness, with advertising budgets shifting towards core platforms [3]. Earnings Forecast and Valuation - The company maintains its Non-GAAP net profit forecasts for 2025 and 2026, with current trading multiples at 33/25 times 2025/2026 Non-GAAP P/E [3]. - The target price for Hong Kong stocks has been raised by 5.7% to 204 HKD, and for US stocks by 8.0% to 27 USD, indicating an upside potential of 3.7%/6.7% [3].

Core Viewpoint - Bilibili has stabilized its operational rhythm after a challenging first quarter, achieving significant revenue growth and profitability in Q2 2025, marking a turnaround from previous losses [5][7]. Financial Performance - In Q2 2025, Bilibili's revenue reached 7.34 billion yuan, a year-on-year increase of 20%, with net profit and adjusted net profit hitting historical highs of 220 million yuan and 560 million yuan respectively [5][9]. - The revenue breakdown for Q2 2025 shows that value-added services, advertising, gaming, and IP derivatives accounted for 39%, 33%, 22%, and 6% of total revenue, respectively [9][11]. User Engagement and Community Dynamics - Monthly Active Users (MAU) increased by 8% year-on-year to 363 million, with a slight decline of 5 million from the previous quarter, indicating improved operational efficiency and user retention [7][23]. - The average age of Bilibili users has risen to 26, with new users averaging 22 years old, reflecting a shift in consumer behavior towards subscription-based services among younger generations [11][20]. Advertising and Revenue Streams - Advertising revenue grew by 20% year-on-year to 2.45 billion yuan, with performance ads seeing nearly 30% growth [11][13]. - The top five advertising sectors in Q2 2025 were gaming, digital appliances, e-commerce, online services, and automotive, with gaming remaining a core component of Bilibili's content ecosystem [13][16]. Gaming Business Performance - Bilibili's gaming revenue surged by 60% year-on-year to 1.61 billion yuan, continuing a trend of high double-digit growth over four consecutive quarters [16][18]. - The success of long-standing games and new updates for titles like "Three Kingdoms: Strategy" contributed significantly to this growth, with expectations for continued performance in upcoming quarters [18][20]. Content Consumption and Community Growth - Daily Active Users (DAU) reached a record high of 109 million, with a year-on-year increase of 7%, while MAU growth indicates a healthy community engagement [23][25]. - Bilibili's content consumption remains strong, particularly in the anime sector, with a 25% increase in viewing time for related content [25][26]. Future Outlook and Strategic Initiatives - Bilibili is focusing on enhancing its advertising infrastructure and leveraging AI technologies to improve content quality and user engagement [14][30]. - The company is also expanding its gaming portfolio, with several new titles awaiting approval, indicating a robust pipeline for future growth [20][22].

Group 1: Economic Indicators - The Markit Manufacturing PMI in the US reached a three-year high of 53.3 in August, indicating strong economic growth, with new orders at their highest since February 2024 [2] - The Markit Services PMI for August was 55.4, marking a two-month low, while the composite PMI was 55.4, the highest in nine months [2] - Employment growth in manufacturing is at its strongest since March 2022, although the overall job market may still face pressure due to slowing demand in the services sector and the impact of AI technology [3] Group 2: Real Estate Market - Multiple cities are seeing a trend of "regulatory adjustment and re-offering" of land, with adjustments aimed at increasing project development value and market appeal [4] - For example, a residential land plot in Shenzhen saw its starting price reduced from 86.27 billion to 64.09 billion after adjusting its commercial land ratio [4] - This strategy is seen as a way for local governments to alleviate financial pressures and boost land fiscal revenue [5] Group 3: Ride-Hailing Industry - Major ride-hailing platforms like Didi and T3 have announced reductions in commission rates, with Didi lowering its maximum commission to 27% [6] - This move aligns with regulatory trends aimed at protecting labor rights, although the actual impact on drivers may vary [7] - The transparency of pricing and distribution rules remains a concern, as many platforms have yet to achieve profitability [7] Group 4: Technology and AI - Kuaishou reported a 13.1% year-on-year revenue growth in Q2 2025, with significant contributions from its e-commerce business [8] - The company plans to stop disclosing GMV figures starting Q1 2026, indicating a more restrained approach to reporting [9] - Bilibili's Q2 revenue grew by 20%, driven by a 60% increase in gaming revenue, although it still relies heavily on a single game for profitability [10][11] Group 5: Automotive Industry - Tesla has partnered with Volcano Engine to integrate AI models into its vehicles in China, addressing gaps in its in-car system compared to local competitors [12][13] - The new Model Y L will feature advanced AI capabilities, enhancing user experience and localizing services [12][13] Group 6: Stock Market Trends - The A-share electronic sector has surpassed the banking sector in market capitalization, reaching 11.54 trillion yuan [14] - Notable stocks like Cambrian and Haiguang Information have seen significant price increases, contributing to the sector's growth [14][15] - The overall market is experiencing a bullish trend, with the Shanghai Composite Index surpassing 3800 points, driven by gains in the semiconductor and AI sectors [16][17]