Group 1 - The gaming sector is experiencing volatility, with the gaming ETF (159869) dropping nearly 3% as of June 17, despite a significant rebound of 16.22% since May 16 [1] - New game releases are performing well, with titles like "暴吵萌厨" and "伊瑟" achieving top rankings in iOS game charts, indicating strong market interest and potential revenue growth for related companies [1] - Century Huatong's new 4X strategy game "Kingshot" has seen its revenue double month-over-month, reaching over $75 million in cumulative revenue within three months of launch, showcasing the potential for substantial earnings in the gaming industry [1] Group 2 - Zhejiang Province has introduced measures to support the international expansion of the gaming industry, proposing 20 specific initiatives aimed at enhancing global competitiveness and promoting cultural exchange [2] - The comprehensive support for the gaming sector from the government is expected to drive overall industry growth, with an upward product cycle and ongoing AI integration further enhancing performance [2]

Group 1 - The gaming sector experienced a volatile pullback on June 17, with the gaming ETF (159869) declining nearly 2%. Most holdings fell, while a few, including Fuchun Co., Perfect World, Mingchen Health, and 37 Interactive Entertainment, saw gains [1] - The gaming industry remains highly prosperous, with user sentiment and consumption demand resonating with game supply. According to Gamma Data, the Chinese gaming market size reached 85.704 billion yuan in Q1 2025, a year-on-year increase of 17.99%. In April 2025, the market size was 27.351 billion yuan, reflecting a year-on-year growth of 21.93% and a month-on-month increase of 2.47% [1] - The trend of "self-consumption" is driving demand for gaming experiences that provide stimulation, fun, and a sense of achievement, particularly boosting the demand for genres like ACG (Anime, Comic, Game), party games, and female-oriented games. In 2024, a total of 1,416 game licenses were issued, a 32% year-on-year increase, with an average of 118 licenses issued monthly [1] Group 2 - According to招商证券, the gaming sector's valuation is expected to recover. The firm remains optimistic about the media and gaming sectors, citing that these are among the best emerging consumer sectors. The valuation of gaming and media remains low compared to other emerging consumer sectors, with recent significant gains in Hong Kong media companies possibly indicating the beginning of valuation recovery [2] - The initial rebound of overseas AI applications is seen as a reflection of a similar trend expected in the domestic market. The most undervalued aspect of gaming and media is the beginning of cultural export overseas, supported by favorable policies [2]

Core Viewpoint - The success of "Dune: Awakening" is attributed to its strong IP backing and innovative gameplay design, which combines elements of SOC, MMO, and CRPG, allowing it to stand out in a competitive market [1][30]. Group 1: Game Performance - "Dune: Awakening" has achieved significant sales, ranking second globally on Steam, with a peak online player count of 140,000 [3][30]. - The game has received positive feedback from fans of the "Dune" franchise, indicating a successful adaptation of the IP [5][6]. Group 2: Game Design and Features - The game incorporates a rich world-building experience, allowing players to customize their characters' backgrounds, which influences gameplay [8][10]. - It features a blend of survival mechanics and RPG elements, enhancing the overall player experience and engagement [10][18]. - The game includes a unique tension-building mechanic with giant sandworms, adding to the immersive atmosphere [11][13]. Group 3: Company Background and Development - Funcom, the developer of "Dune: Awakening," has a tumultuous history, including multiple rounds of layoffs and project failures before finding success with this title [17][25]. - The company underwent significant changes under CEO Rui Casais, focusing on improving operational efficiency and game development processes [27][30]. - Tencent's investment in Funcom, acquiring a 29% stake and later full ownership, provided the necessary financial support for the development of "Dune: Awakening" [30][31]. Group 4: Industry Context - The competitive landscape for SOC games is intensifying, with successful titles needing to offer unique gameplay experiences to attract players [33]. - Tencent's strategic investments in various gaming studios have resulted in a growing portfolio of successful titles across different genres, indicating a strong presence in the global gaming market [30][33].

Group 1 - The core viewpoint of the articles highlights the performance and strategic developments in the Chinese mobile gaming industry, showcasing both successes and challenges faced by different companies [1][2][3] Group 2 - In May, the mobile game "Gossip Harbor" by Lemon Microfun ranked second in overseas revenue, indicating strong performance of Chinese mobile games in international markets [1] - The cumulative revenue of the otome game "Love and Deep Space" by Paper Games reached $650 million (approximately 4.68 billion RMB), reflecting the potential of Chinese games in overseas markets [1] - Nexon's "KartRider: Drift" announced its shutdown after less than two and a half years of operation, raising concerns about the lifecycle management of gaming products [2] - The game director of "KartRider: Drift" emphasized the difficulty in providing satisfactory service for the racing IP, which may lead to cautious evaluations of similar casual racing game projects [2] - NetEase's "Nirvana in Fire" is set to introduce a new casual competitive gameplay mode called "Nirvana Chess," which merges classic auto-chess rules with its game universe, potentially impacting the competitive landscape of similar products [3] - The introduction of "Nirvana Chess" may prompt investors to assess NetEase's strategy to enhance competitiveness through new gameplay features [3]

Summary of the Conference Call on the Gaming Industry Industry Overview - The A-share gaming companies are currently undervalued, with second-tier companies valued at approximately 15-18 times earnings, compared to 30 times for similar companies in Hong Kong, indicating potential for valuation improvement [1][3] - The competitive landscape in the gaming industry is easing, providing ample market space for second-tier companies [1] - The gaming industry is experiencing a recovery in demand, with a monthly growth rate of 22% in April, highlighting the growth potential of the sector [1][9] Key Insights - Mid-sized gaming products have exceeded expectations, such as Giant Network's "Supernatural Action Group" and G-bits' "M88," significantly improving profitability and positively impacting company financials [1][4] - The sales expense ratio for gaming companies has decreased year-on-year, with diverse marketing strategies like live streaming and community marketing reducing costs and improving ROI [1][8] - Major gaming companies are focusing on the operation of existing games rather than launching new big titles, creating opportunities for smaller companies to thrive in niche markets [1][10] Notable Products and Performance - Giant Network's "Supernatural Action Group" has achieved a monthly revenue of approximately 30-50 million, relying on word-of-mouth and minimal advertising [5][18] - G-bits' "M88" is expected to generate 150-200 million in its first month, contributing significantly to quarterly reports [5][20] - The game "Friendship Time" has shown strong performance, reaching the top of free charts, indicating a shift in the market dynamics favoring smaller developers [2][6] Market Dynamics - The supply side of the gaming industry has relaxed, with an increase in the number of game approvals, and the demand side is showing signs of recovery [9][14] - The overall gaming industry has maintained double-digit growth from January to April 2025, despite concerns about data accuracy due to low base effects from the previous year [11] Investment Opportunities - The gaming sector is currently valued at 15-20 times earnings, making it attractive compared to other high-valuation sectors [13][28] - Recommended companies include Giant Network, Kingsoft, and G-bits, with potential for further growth and investment returns [27] Policy Environment - Local governments have introduced supportive policies for the gaming industry, contributing to a more favorable policy environment [14] Future Outlook - The gaming industry is expected to continue its growth trajectory, with new product launches and existing titles maintaining strong performance [15][19][25] - The anticipated release of new titles like Tencent's "Fearless Covenant" and Kingsoft's "解神机" is expected to further enhance market dynamics [15][19] Conclusion - The gaming industry is positioned for growth with favorable market conditions, supportive policies, and a shift in competitive dynamics, making it an attractive sector for investment.

Group 1 - Lilith Games' self-developed shooting game "Far Light 84" is scheduled for a July test, which will be available on both PC and mobile platforms, potentially attracting market attention towards the "gaming + AI + esports" concept [1] - NetEase's turn-based pet-catching mobile game "Spirit Beast Adventure" will begin testing on June 19, featuring a unique blend of "vertical screen + pet-catching + home management" gameplay, targeting casual players and aiming for rapid annual revenue growth if a stable user base is formed [2] - Sunborn Network's "Girls' Frontline" issued an apology for server issues experienced after its June 12 launch, attributing the problems to an underestimation of server capacity, which may weaken market confidence in its future products [3]

Investment Rating - The report maintains a "Buy" rating for the company [6][10]. Core Insights - The report highlights the potential profit increment from the upcoming game "Yihuan," developed by the company's Huanta studio, which is expected to outperform the previous title "Hanta" in terms of revenue [1][3]. - The company has undergone significant organizational restructuring to enhance efficiency and market responsiveness, transitioning to a more product-centric studio system [2][31]. - The financial forecast predicts revenues of 67 billion, 108 billion, and 99 billion yuan for 2025-2027, with corresponding net profits of 6.3 billion, 17.1 billion, and 18.2 billion yuan [3][10]. Summary by Sections Investment Rating - The company is rated as "Buy" with a target price based on projected earnings growth [6][10]. Game Development and Competitive Advantage - "Yihuan" is positioned as a supernatural urban open-world RPG, utilizing Unreal Engine 5, which supports advanced graphics technologies [1][20]. - The game is expected to leverage the studio's prior experience and the current market trend towards open-world games, providing a first-mover advantage [1][27]. Organizational Changes - The company has streamlined its organizational structure, reducing employee count from 5,754 to 3,905, and divested non-core assets to improve operational efficiency [2][31][33]. Financial Projections - Revenue projections for 2025-2027 are set at 67 billion, 108 billion, and 99 billion yuan, with net profits of 6.3 billion, 17.1 billion, and 18.2 billion yuan respectively [3][10]. - The current price-to-earnings ratios are projected at 47, 17, and 16 for the years 2025, 2026, and 2027 [3][10].

Group 1 - The core viewpoint of the articles highlights the strong support from various Chinese provinces for the gaming industry to expand internationally, aiming to enhance the global influence of domestic games [1][5] - Zhejiang Province's measures, effective from July 10, 2025, focus on promoting Chinese culture abroad and improving international communication capabilities [1] - Shenzhen's plan emphasizes the development of digital trade and the establishment of public service platforms to support game companies in overseas expansion [1] - Guangdong's policies aim to create an industry cluster for game exports and encourage small and medium enterprises to participate in international markets [1] Group 2 - Data indicates that China's self-developed games are projected to generate overseas sales revenue of $18.557 billion in 2024, reflecting a year-on-year growth of 13.39% [1] - In May 2025, 33 Chinese game publishers ranked among the top 100 global mobile game publishers, collectively earning $2.02 billion, which accounts for 36.6% of the total revenue of the top 100 [3][4] - From January to May 2025, Chinese game publishers achieved a total global mobile game revenue of $10.25 billion, maintaining a revenue share of over 36% [4] Group 3 - The A-share gaming industry index has shown a year-to-date increase of 20.46%, ranking 6th among 124 secondary industry indices [5] - Companies like Glacier Network have seen significant stock price increases, with a year-to-date rise of over 42% [5] - The overall trend in the gaming sector is positive, with several indices reflecting upward movements due to supportive policies and industry growth [5][7]

Group 1 - Tencent is reportedly considering acquiring South Korean game developer Nexon for $15 billion (approximately 107.9 billion RMB) and has initiated discussions with the family of the late founder Kim Jung-woo [1] - Tencent has been in contact with Kim Jung-woo's family to explore the potential acquisition, with the family evaluating their options through consultations with advisors [1] Group 2 - GAC Toyota announced a partnership with Xiaomi, Huawei, and Momenta, integrating into Xiaomi's "Smart Car Home" ecosystem, with the first model, the Platinum Smart 7, set to open hardware ecosystem interfaces [6] - Future GAC Toyota models will support various Xiaomi ecosystem devices, including intercoms, car-mounted phone holders, smart fragrance systems, and physical buttons for the central control screen [6] Group 3 - Ant Group's Vice President revealed that Ant Group has initiated the application for a stablecoin license in Hong Kong and has engaged in multiple rounds of discussions with regulators [8] - Ant Group is accelerating investments and expanding collaborations in global financial asset management, focusing on the real-world application of AI, blockchain, and stablecoin innovations [8]

Market Overview - A-shares experienced a rebound with the Shanghai Composite Index surpassing 3400 points, closing up 0.52% at 3402.32 points, while the Shenzhen Component Index rose 0.83% and the ChiNext Index increased by 1.21% [1] - Key sectors leading the market included rare earths, auto parts, and gaming, while the innovative drug sector saw a pullback [1] Economic and Policy Insights - Recent US-China trade talks resulted in a consensus on key economic issues, reflecting a commitment to implement agreements from previous discussions [1] - Despite fluctuations in tariff policies, China's exports maintained steady growth, indicating macroeconomic resilience [1] - The potential for counter-cyclical policies in China may provide positive support for asset prices, suggesting manageable risks for A-shares in the near term [1] Investment Strategies - With long-term capital inflows, the downward space for the market appears limited, and investors are encouraged to consider strategies like dollar-cost averaging and grid trading for opportunistic investments [1] - The upcoming annual dividend distributions in June and July are expected to enhance the appeal of dividend-paying assets [1] Dividend and ETF Focus - The new policies encouraging dividend distributions among listed companies are beneficial for state-owned enterprises, enhancing investor returns and supporting valuation recovery [2] - The Cash Flow ETF and Dividend State-Owned Enterprise ETF have both announced monthly dividends, with the latter achieving 14 consecutive months of distributions [2] - The Cash Flow ETF has outperformed the CSI Dividend Index and the CSI 300 Index over the past nine years, making it an attractive option for investors seeking consistent cash flow [2] Gaming Sector Developments - The Gaming ETF saw a 2.42% increase, driven by the successful launch of new games and the anticipation of major IP products in the second half of the year [3] - Collaborations between gaming companies and AI technology firms are enhancing user experiences and expanding commercial applications within the gaming industry [3][4] - The trend of developing and selling IP-related products is gaining traction among leading film and gaming companies, contributing to revenue growth [4]