GUOTAI HAITONG SECURITIES·2026-01-15 11:05Investment Rating - The report assigns an "Overweight" rating for the industry [4]. Core Insights - The transition from traditional SEO to GEO (Generative Engine Optimization) represents a paradigm shift in how brands are perceived and trusted in AI-driven search environments. GEO focuses on enhancing the credibility and citation frequency of brands in AI-generated answers, moving beyond mere visibility to being actively referenced by AI [2][8]. - The market potential for GEO is projected to reach a "billion-dollar level," driven by the replacement of existing SEO budgets and new allocations for AI search [2][21]. Summary by Sections 1. Definition and Essence of GEO - GEO is defined as an optimization strategy that ensures brands and content are actively mentioned in AI-generated answers, contrasting with traditional SEO which focuses on ranking [8]. - The emergence of GEO is attributed to the rise of AI search, which bypasses traditional click-through processes, leading to a significant drop in natural click rates [10][11]. 2. Technical Principles: Trust Engineering on the RAG Link - The RAG (Retrieval-Augmented Generation) architecture is central to GEO, shifting the focus from keyword matching to semantic understanding and trust-building [14][15]. - GEO aims to enhance content visibility, retrievability, and trustworthiness, rather than simply improving rankings [15]. 3. Market Space: SEO Replacement and New AI Search Demand - The global SEO service market is estimated at approximately $80 billion in 2024, with GEO expected to capture 10-20% of this budget, alongside new AI search allocations, leading to a potential market size exceeding $100 billion by 2030 [16][19]. - In China, the GEO market is projected to grow from 2.9 billion yuan in 2025 to 24 billion yuan by 2030, reflecting a CAGR of about 52.4% [21]. 4. Business Model: Transition from Labor-Intensive Services to Technology Platforms - The current GEO service model is primarily project-based, but it is expected to evolve towards a subscription-based SaaS model combined with performance-based pricing [22][25]. - The anticipated gross margin for GEO services is expected to rise significantly, aligning with the characteristics of the high-tech, high-concentration software industry [25]. 5. Investment Recommendations: Mapping the Content-Knowledge-Retrieval-Computing Chain - The report identifies key investment targets across the GEO value chain, including companies like Mifus, Minglue Technology, and iFlytek, which are positioned to benefit from the shift towards AI-driven marketing and content creation [27][30].