Core Insights - The National Press and Publication Administration announced the approval of 159 domestic games and 7 imported games in October 2025, indicating a stable regulatory environment for the gaming industry [1] Industry Analysis - The gaming sector is transitioning from a project-based model to a focus on quality, with longer project cycles reflecting the maturity of the market and elevated player expectations [1] - The current trend emphasizes "quality over quantity," leading to a product line characterized by fewer but more refined games, resulting in extended game lifecycles [1] - The SLG (Simulation Game) genre, particularly SLG+X, is gaining traction as a long-term operational category, suggesting a shift away from traditional project-based approaches [1] Investment Outlook - Jianghai Securities highlights the strong cash flow within the gaming sector, ongoing policy support, and advancements in AI game development as positive indicators for investment [1] - Recent adjustments in the gaming sector have made valuations more attractive, reinforcing a positive outlook for investment opportunities in the gaming industry [1]

Core Viewpoint - The gaming industry is expected to experience a longer economic cycle than market expectations due to supply and demand resonance, with current valuation attractiveness remaining prominent, suggesting continued investment in the gaming sector and ongoing attention to key new games and evergreen titles [1] Group 1 - The current economic cycle in the gaming industry may exceed market expectations due to supply and demand dynamics [1] - The valuation of the gaming sector is still considered attractive, indicating potential for further investment [1] - There is a recommendation to continue focusing on the performance of core new games and established titles [1]

Market Overview - The gaming sector increased by 3.1% on August 4, with Giant Network leading the gains [1] - The Shanghai Composite Index closed at 3583.31, up 0.66%, while the Shenzhen Component Index closed at 11041.56, up 0.46% [1] Individual Stock Performance - Giant Network (002558) closed at 26.53, up 9.99% with a trading volume of 874,400 shares and a turnover of 2.265 billion [1] - Other notable performers include: - Shenzhou Taiyue (300002) at 13.72, up 8.63% [1] - ST Huatuo (002602) at 13.53, up 4.97% [1] - Jibite (603444) at 363.58, up 4.48% [1] - Ice River Network (300533) at 35.98, up 3.15% [1] Fund Flow Analysis - The gaming sector saw a net inflow of 1.255 billion from institutional investors, while retail investors experienced a net outflow of 490 million [2][3] - Major stocks with significant net inflows include: - Shenzhou Taiyue with a net inflow of 441 million [3] - Giant Network with a net inflow of 313 million [3] - ST Huatuo with a net inflow of 301 million [3] ETF Performance - The Gaming ETF (product code: 159869) tracked the China Securities Animation and Gaming Index, with a recent five-day change of 0.00% and a net inflow of 99.276 million [5] - The Food and Beverage ETF (product code: 515170) saw a five-day decline of 2.24% with a net outflow of 911.5 thousand [5]