Ge Long Hui·2026-01-20 02:22Core Viewpoint - Goldman Sachs reports that the Chinese gaming and entertainment sector experienced significant stock price increases in 2025, with mid to large-cap stocks rising by 50% to 80% compared to the Hang Seng China Enterprises Index's 26% [1] Group 1: Market Performance - The strong performance continued into early 2026, with some stocks increasing by as much as 30% compared to related indices' growth of approximately 3-5% [1] - The price increase is attributed to a combination of valuation expansion and earnings per share growth [1] Group 2: Future Outlook - For 2026, Goldman Sachs outlines key themes and debates for the sector, indicating that the risk-reward profile remains attractive but is more alpha-driven [1] - The firm prefers companies with new growth potential, such as those benefiting from AI application penetration and accelerated overseas expansion [1] Group 3: Competitive Landscape - Companies that still have compound growth and profit expansion potential amid increasing competition, particularly with ByteDance raising competitive concerns, are favored [1] - Core buy stocks selected by Goldman Sachs include Tencent, NetEase, Kuaishou, Bilibili, and Tencent Music [1] Group 4: Stock Ratings - Goldman Sachs maintains a "Buy" rating on Tencent, adjusting the target price from HKD 770 to HKD 752 [1]