Group 1 - Tencent's new game "Return Ring" showcases a unique time-loop theme and innovative gameplay, generating significant market interest and potential [1] - The game is positioned as a competitive entry in the 2D open-world genre, drawing comparisons to "Baldur's Gate" in terms of narrative style and mechanics [1] Group 2 - Sanbai Network's "Girls' Frontline" Steam version is set to launch on June 12, following a delay due to pending Steam approval [2] - The company has implemented a compensation strategy for players affected by the delay, which includes in-game rewards to maintain player loyalty and satisfaction [2] Group 3 - NetEase's popular mobile game "Justice" has announced its second anniversary expansion, scheduled for June 27, featuring cross-industry collaborations [3] - The expansion is expected to provide a short-term boost to NetEase's market performance, reflecting the company's strong capabilities in game development and player engagement [3]

Group 1 - Paper Games' title "Infinite Warmth" won the "Visual and Graphics" category at the 2025 Apple Design Awards, marking the first time in four years that a domestic game has received such an award, enhancing the company's brand value [1] - The award signifies that "Infinite Warmth" has reached international standards in artistic style and technical performance, including lighting rendering and character modeling [1] Group 2 - Shift Up announced that the PC version of the highly anticipated action RPG "Stellar Blade" has begun preloading and will officially unlock on June 12, with a free trial available on Steam [2] - The release of the PC version is expected to expand the user base, particularly among action game enthusiasts in Asia and Europe, potentially boosting the market value of Shift Up's parent company if preloading and trial data show strong performance [2] Group 3 - Funcom's sci-fi open-world multiplayer game "Dune: Awakening" has officially launched, with various editions available on Steam at different price points [3] - The game's release is a key product for Funcom this year, and positive market reception could solidify its position in the genre and contribute to the company's revenue growth [3]

Core Insights - The Apple Design Awards recognized the game "Infinite Warmth" by Paper Games, marking the first time in four years that a Chinese game has won in the "Visual and Graphics" category, making Paper Games the only Chinese game company to receive an award this year [1][2] Group 1: Game Features and Innovations - "Infinite Warmth" is described as a "collect beautiful open world" game, with a unique gameplay focus on collecting diverse clothing rather than weapons, receiving high praise from Apple for its innovative approach [1] - The game is the first open-world title developed cross-platform using the UE5 engine, noted for its stunning visual presentation and artistic design, earning a score of 9 from IGN and an 80 from Metacritic based on 29 international media outlets [1] - Paper Games implemented over a hundred self-developed innovative solutions to showcase intricate fabric details and impressive lighting effects, categorizing clothing textures for dynamic representation based on material physics [1] Group 2: Player Engagement and Reception - The game features a fully upgraded photography function, allowing players to capture beautiful moments with adjustable focus, lighting, aperture, filters, and dynamic clothing effects based on different weather and scenes [2] - The light combat and nurturing gameplay design has sparked enthusiastic discussions among players, with the character "Warm" and her companion "Big Meow" winning the hearts of global players [2] - The CEO of Paper Games expressed surprise at the immediate player engagement, noting that the average online duration on the first day indicated players were quickly immersed in the game [2]

Core Insights - The Apple Worldwide Developers Conference (WWDC) 2025 featured the Apple Design Awards, where Chinese game developer Paper Games won the "Visual and Graphics" category for their game "Infinite Warmth," marking the first time in four years that a domestic game has received such an award [1][4] - "Infinite Warmth" is the fifth installment in the Warmth series, launched globally on December 5, 2024, and is notable for being the first open-world game developed on the UE5 engine across multiple platforms [1][4] - The game received high praise from international media, scoring 9 out of 10 from IGN and 80 on Metacritic, highlighting its deep exploration gameplay, engaging storyline, and visually stunning costumes [1][4] Company and Industry Highlights - Paper Games implemented over a hundred self-developed innovations to enhance fabric details and lighting effects, allowing for realistic physical dynamics in clothing [4] - The game combines fashion collection with open-world exploration, which has resonated well with players, leading to discussions and enthusiasm both domestically and internationally [4] - The CEO of Paper Games, Yao Runhao, noted that players quickly immersed themselves in the game, as indicated by the average online duration on the first day [4] - Paper Games has a strong relationship with Apple, having quickly announced a Vision Pro version of "Love and Deep Space" following the release of Apple's MR device, Vision Pro, indicating Apple's recognition of Paper Games' technical capabilities [5] - Tim Cook, Apple's CEO, visited Paper Games in Shanghai to experience their games, further solidifying the partnership between the two companies [5]

Investment Rating - The report assigns a "Buy" rating to Kuaishou Technology with a 12-month price target of HK$63.00, indicating an upside potential of 15.6% from the current price of HK$54.50 [1][12]. Core Insights - Kuaishou's Kling AI has surpassed expectations with an Annualized Revenue Run Rate (ARR) exceeding US$100 million as of March 2025, and monthly subscription bookings exceeding RMB100 million (approximately US$14 million) in April and May [1][3]. - The launch of Kling 2.1 has significantly reduced costs, making it more competitive in the market, with per video costs dropping to US$0.27-0.47, which is 60-80% lower than the previous version [2][32]. - The revenue outlook for FY25 has been raised to US$100 million, with potential for further upside due to expanding use cases and increased promotional budgets [3][19]. Financial Projections - Revenue projections for Kuaishou Technology are as follows: - FY24: RMB 126.9 billion - FY25: RMB 140.7 billion - FY26: RMB 153.7 billion - FY27: RMB 165.8 billion [6][16]. - EBITDA is expected to grow from RMB 27.1 billion in FY24 to RMB 40.5 billion in FY27, indicating a strong growth trajectory [6][16]. - EPS is projected to increase from RMB 4.02 in FY25 to RMB 5.87 in FY27, reflecting a positive earnings outlook [6][16]. Market Position and Competitive Landscape - Kling AI has captured approximately 30% of the video generation AI model market, outpacing competitors like Runway and Google's Veo 2 as of May 2025 [20][23]. - The revenue mix for Kling AI indicates that 70% comes from 2C/2P subscription revenue, primarily from professional content creators, while 30% is derived from 2B API calling revenue [26][32]. - The company is focusing on expanding its user base, particularly in overseas markets, leveraging its technological advantages and improving user experience [23][32]. Valuation and Comparison - Kuaishou is currently trading at a forward P/E of 10X, which reflects its core video platform and advertising/eCommerce business, while Kling AI is expected to justify a premium valuation due to its growth potential [18][19]. - Comparatively, leading AI startups have ARR and valuations that suggest significant growth potential, with Kling AI's estimated ARR for FY25 at US$124 million [21][19].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the near term [6]. Core Insights - The company is recognized as a leading developer of classic IP games, with a new product cycle expected to begin after the second half of 2025, which is anticipated to drive revenue and profit growth [1]. - The company has recently announced a share buyback plan, intending to repurchase HK$300 million worth of shares over the next 12 months, with 1 million shares already repurchased as of May 29 [1]. - A strategic investment in Century Huatong is expected to significantly boost profits by 2025, as the company has acquired 8 million shares, representing 1.1% of Century Huatong's total shares [2]. - The company has established a joint venture with Century Huatong to manage the distribution of certain "Legend" IP games, leveraging Century Huatong's successful titles like "Whiteout Survival" and "Kingshot" [2]. - The company's classic IP games, including "Legend," "Miracle," and "Hot Blood Legend," provide a solid foundation, with new games expected to gradually gain traction starting in 2026 [3]. Financial Projections - The company is projected to achieve revenues of HK$58.4 billion, HK$74.3 billion, and HK$90.2 billion for the years 2025, 2026, and 2027, respectively, with corresponding net profits of HK$8.15 billion, HK$7.07 billion, and HK$8.92 billion [4]. - The current price-to-earnings (P/E) ratios are estimated to be 10, 11, and 9 for the years 2025, 2026, and 2027, respectively, indicating a favorable valuation [4]. - The financial summary indicates a revenue growth of 4.71% in 2025, followed by 27.11% in 2026 and 21.40% in 2027, with net profit margins improving over the forecast period [12].

6月9日早盘，游戏板块震荡攀升，游戏ETF（159869）现已翻红微涨。持仓股涨跌互现，上涨方面，博 瑞传播、掌趣科技、奥飞娱乐等均涨超2%；下跌方面，天舟文化、祥源文旅、北纬科技等跌幅居前。 游戏板块强势打开布局通道，游戏ETF（159869）近5个交易日连续获得资金净流入，累计"吸金"达2.39 亿元，游戏板块持续受资金青睐。 暑期大档期临近，聚焦优质内容产品周期的开启，新品强势表现在目前市场仍具备较强弹性交易机会。 华源证券认为，在游戏方面，优质产品上线表现对公司弹性贡献仍较为突出。例如，友谊时光的派对游 戏产品《暴吵萌厨》5月28日上线后，带动友谊时光市值表现强势拉升；由心动公司研发的策略回合制 RPG手游《伊瑟》国际服率先定档6月5日上线，国服目前也在筹备中；吉比特新产品《杖剑传说》也爬 升至iOS游戏畅销榜TOP15；此外，AI陪伴产品《EVE》也即将开启测试。该机构建议，重视头部游戏 公司在AI+游戏范式探索上的示范效应，相关游戏产品表现如果超预期有望推动相关上市公司的价值重 估，同时部分公司重点游戏陆续定档，关注新游产品周期的开启。 相关ETF：游戏ETF（159869）聚焦A股IP游戏产业龙 ...

Industry Developments - Chengdu government has introduced new policies to encourage the development of gaming and esports companies, indicating increasing local government support for the ACG industry [2][3] - The Chengdu government announced 15 policy measures aimed at enhancing game content creation, strengthening esports competitiveness, promoting industry integration, and improving development factors to elevate the gaming and esports industry [3] Company News - Yuewen Group announced a plan to acquire a 26.67% stake in Wuhan Yihua Kaitian Cultural Communication Co., Ltd. for 325 million yuan, increasing its ownership from 5.17% to approximately 31.48% [4] - After the acquisition, Tencent, the controlling shareholder of Yuewen, will hold a total of 61.82% of Yihua Kaitian, becoming the largest shareholder [4] - Xishanju's sci-fi mech battle game "Jiexianji" is set for global public testing on July 2, 2025, and will be available on PC, Steam, and Xbox Series X|S [5] - The highly anticipated domestic single-player game "Mingmo: Yuanshu Zhi Yu" has released a new trailer and is scheduled for official release on July 24 [6] Regulatory Updates - Following a U.S. ruling against Apple, the European Commission has mandated that Apple must open third-party payment options within 30 days in the EU market, with a potential fine of 500 million euros (approximately 4.096 billion yuan) for non-compliance [7] International Developments - Riot Games has announced its entry into the physical card game market with "Runeterra," based on the League of Legends IP, set to launch this year [8] - South Korean developer Shift Up has unveiled its flagship new game "Project Spirit," themed around "Eastern Fantasy," which is a cross-platform subculture project [9] - Niantic, the developer of "Pokémon GO," has confirmed the sale of its gaming business to Scopely for $3.5 billion, which includes titles like "Pokémon GO" and "Monster Hunter Now" [10]

Core Insights - The gaming companies in Shanghai appear to be recovering, signaling a potential new phase for the industry [1][26] Group 1: Company Performance - Eagle's new game "Pom Pom" has achieved significant success, ranking Top 3 in China and Top 10 globally on Steam with an 88% approval rating [1][2][3] - Paper Games has seen a remarkable turnaround, with its flagship store topping the sales chart on Tmall during the "618" shopping festival [5][6] - The game "Love and Deep Space" has shown strong performance, with projected revenue exceeding 6 billion yuan across all platforms in 2024 [6][7] - Heartbeat Games has reported a nearly 70% year-on-year revenue increase, reaching 3.3 billion yuan in 2024, driven by successful titles [10][12] Group 2: Industry Trends - The gaming industry in Shanghai is experiencing a collective improvement, which may indicate the beginning of a recovery cycle [26] - Despite the positive trends, many companies remain cautious regarding project launches and hiring, with a significant oversupply of talent in the job market [24][25] - The past two years saw a wave of layoffs and project cancellations across the industry, but the current signs of recovery suggest a potential shift in the market dynamics [23][26]

Core Viewpoint - A major operational incident occurred in the game "Yinian Xiaoyao" under the A-share game company Gigabit, where game items worth approximately 500,000 yuan were mistakenly distributed to all players, leading to significant disruptions in the game's economy and balance [3][5]. Group 1: Incident Details - On May 31, during the Dragon Boat Festival, "Yinian Xiaoyao" mistakenly issued 99,000 high-value items called "Any Treasure Box" to all players due to human error, valued at around 500,000 yuan [3][5]. - The project team initiated an emergency response on the same day and announced on June 2 that they would not implement the common industry practice of a "full server rollback," but instead opted for a "point-to-point rollback" for affected players [5][6]. - Players who received the erroneous items were temporarily banned from listing on the official trading platform, and the project team offered compensation of 20 "Any Treasure Boxes" to affected users [5][6]. Group 2: Financial Performance - Gigabit's annual report indicated that "Yinian Xiaoyao" generated 596 million yuan in revenue for 2024, a decrease of 42.49% from 1.036 billion yuan in 2023, making it the worst-performing among Gigabit's three major games [6][7]. - Overall, Gigabit reported a revenue of 3.696 billion yuan in 2024, down 11.69% year-on-year, with net profit declining by 16.02% to 945 million yuan [7][8]. - In the first quarter of 2025, "Yinian Xiaoyao" continued to see a revenue decline of 22.94%, while the company benefited from the launch of a new game, "Wanjian Changsheng," leading to a 22.47% increase in overall revenue [8]. Group 3: Industry Context - The incident highlights a recurring issue in the gaming industry, where operational errors can lead to significant player dissatisfaction and potential loss of users, as seen in previous cases with other major games [9]. - Industry analysts emphasize the importance of implementing tiered review systems before large operational changes to minimize errors and ensure effective crisis management following incidents [9].