Market Overview - The current market trend shows that focusing on EPS (Earnings Per Share) is crucial, as stock prices tend to respond positively when EPS is correctly predicted, leading to potential valuation increases [2][3] - The relationship between fundamentals and narratives is emphasized, where strong EPS combined with a compelling narrative can lead to significant stock price appreciation [2][3] - Certain sectors, such as innovative pharmaceuticals and new consumption, are exhibiting signs of a "crazy bull market," with companies showing price increases despite poor fundamentals [2][3] Gaming Industry Characteristics - The gaming industry has a large market size, with domestic companies capturing nearly 40% of the overseas mobile game market and a growing share in PC and console gaming [4][5] - The global gaming market is estimated to be between 15,000 to 18,000 billion, with high gross margins and net profit rates, indicating a lucrative industry [4][5] - The gaming sector is considered a sunrise industry, with increasing gaming populations and spending potential, particularly in East Asia [4][5] Industry Trends - The gaming industry is expected to experience significant growth over the next few years, driven by innovations in gameplay and the rise of cross-platform gaming [9][11] - Major gameplay innovations include the rise of open-world games, which have seen substantial success, particularly with titles like Genshin Impact [9][10] - The trend of single-player games is also resurging, with potential for significant market share in the domestic market [10][11] Investment Methodology - Long-term investment targets should focus on companies with strong EPS growth and shareholder returns, with a preference for those capable of expanding their product categories [12][13] - Mid-term investment opportunities arise from new product launches, with the potential for significant returns based on market conditions and product performance [12][13] - Companies like Tencent and NetEase are highlighted as successful long-term investments due to their consistent performance and growth potential [12][13] Listed Gaming Companies - Tencent remains a dominant player, although it faces challenges from high baseline revenues in certain games [15][16] - NetEase's project approval process is scrutinized, as it may hinder the development of potentially successful games [15][16] - Other companies like Kingsoft and Huya are discussed, with varying degrees of market performance and potential for growth [15][16][17]