Giant Network(SZ:002558) Shenwan Hongyuan Securities·2025-06-08 11:12Investment Rating - The report maintains an "Overweight" rating for the industry, indicating a positive outlook compared to the overall market performance [4][34]. Core Insights - The commercialization progress of Kuaishou's AI tool, KuaLing, has exceeded expectations, with significant revenue contributions anticipated [4][5]. - The AI industry has seen strong performance in the US stock market since April, with notable gains in companies like Nvidia and Palantir, indicating a robust growth trajectory [4][5]. - The report emphasizes the potential of AI applications in various sectors, particularly in creative tools and advertising, highlighting Kuaishou and Meitu as key players [6][7]. Summary by Sections AI Applications - Kuaishou's KuaLing has achieved an annual revenue run rate exceeding 100 million USD, with monthly payments surpassing 100 million RMB in April and May [8]. - Meitu is positioned to benefit from both consumer and business segments, leveraging its strategic partnership with Alibaba to enhance productivity in e-commerce [11][12]. Cloud Computing - Alibaba and Kingsoft Cloud are highlighted as key recommendations in the cloud computing sector, with Kingsoft Cloud reporting a 200% year-on-year growth in AI revenue [6][13]. Gaming Sector - The gaming industry is identified as a low-risk, cyclical consumption sector, with a year-on-year growth rate of over 20% in mobile gaming from January to April [15]. - Key companies in the gaming sector include Giant Network, ST Huatuo, and Zhongxu Future, with a focus on their innovative product offerings and market positioning [15][20]. Consumer Trends - The report notes a shift towards "self-consumption" trends, particularly among younger demographics, with companies like Pop Mart and Blucol contributing to this growth [15][24]. - The upcoming summer film season is expected to drive demand, with a diverse slate of over 60 films scheduled for release [24]. Valuation Metrics - The report provides a detailed valuation table for key companies, indicating a range of price-to-earnings (PE) ratios from 15 to 19 for the gaming sector, suggesting attractive investment opportunities [28].