Core Viewpoint - The controversy surrounding the new costume "Fei Bai Cheng Shi" in the game "Yan Yun Shi Liu Sheng" highlights concerns over the appropriateness of character designs for underage players, particularly given the character's age setting of 16 years old and the game's age rating of "16+" [2][10][12] Group 1: Controversy and Player Reactions - The new female costume design has been criticized by players for being overly revealing, with some describing it as resembling "lingerie" [3][5] - Players have expressed concerns that such designs could lead to negative influences on underage users, prompting calls for the costume's removal [10][12] - The official responses from the game developers have been perceived as dismissive, with players feeling that the explanations provided were insufficient and lacked sincerity [10][12] Group 2: Company Background and Market Performance - "Yan Yun Shi Liu Sheng," developed by NetEase's Everstone studio, was launched in December 2024 and aims to be the "best martial arts game" for all players [12] - As of July 2025, the game has exceeded 40 million cumulative users, indicating strong market performance and user engagement [11][12] - The game had previously positioned itself as a "female-friendly" title, promising not to include revealing designs, which has led to disappointment among players with the recent costume release [12][13] Group 3: Industry Context and Regulatory Concerns - The issue of "borderline" designs in games is not unique to "Yan Yun Shi Liu Sheng," as other titles have faced similar controversies, leading to regulatory scrutiny and adjustments [14][15] - Experts suggest that clearer content review standards and age rating guidelines are necessary to protect minors and ensure responsible game design practices [16]

Core Insights - The recent surge in IPOs for AI and semiconductor companies in China has attracted significant market attention, with notable performances from companies like MiniMax and Zhipu [1][2][3] - Major gaming companies such as Tencent, Mihayou, and others are increasingly investing in AI and semiconductor firms, indicating a trend of deep integration between the gaming industry and advanced technologies [1][12][15] Investment Highlights - MiniMax, an AI unicorn, debuted on the Hong Kong Stock Exchange with a first-day increase of 109%, reaching a market capitalization of over HKD 100 billion [1] - Mihayou, an early investor in MiniMax, holds approximately 6.1% of the company, with a current stake valued at around HKD 6.5 billion, reflecting a nearly 70-fold increase in valuation since its initial investment [2] - Zhipu, another AI company, saw its market cap exceed HKD 570 billion upon listing, with significant price increases shortly after [2][3] Strategic Investments by Gaming Companies - Tencent led a USD 250 million Series B funding round for MiniMax and has also invested in Zhipu, holding 1.58% and 2.58% stakes in these companies, respectively [3][12] - Other gaming companies, such as 37 Interactive Entertainment and Youzu Interactive, are also making strategic investments in AI and semiconductor firms, indicating a broader trend within the industry [3][11] Market Dynamics - The gaming industry is increasingly viewed as a significant player in the tech investment landscape, with analysts noting that gaming companies are leveraging their cash flow to support advancements in AI and semiconductor technologies [12][15] - The shift in perception of gaming companies from mere entertainment providers to strategic investors in high-tech sectors reflects a growing recognition of their role in driving technological innovation [15][16] Future Outlook - Analysts suggest that the investments made by gaming companies are not merely opportunistic but are driven by internal needs for enhanced computational power and AI tools to improve game development processes [13][14] - The trend of gaming companies investing in upstream technologies is expected to continue, fostering a symbiotic relationship between gaming and technological advancements [14][15]

Group 1: Gaming Industry Growth - The domestic gaming market in 2025 is projected to reach a sales revenue of 350.79 billion yuan, with a year-on-year growth of 7.68%, and a user base of 683 million, marking a 1.35% increase, both hitting historical highs [1][8] - Growth is driven by improvements in mobile game quality, successful new releases, innovative gameplay and operations in long-standing games, strong growth in mini-program games, and user expansion through multi-platform connectivity [1][8] - In December, the National Press and Publication Administration issued 144 domestic game licenses, maintaining a high monthly issuance rate, with a total of 1,676 domestic licenses expected in 2025, a nearly 30% year-on-year increase, supporting high-quality industry development [1][8] Group 2: AI Industry Developments - AI unicorns have seen successful IPOs, with Zhihua Huazhang's stock rising 36% on its first day and MiniMax achieving a record 109% increase, setting a new benchmark for AI company IPOs [9] - DeepSeek is expected to launch its V4 version in mid-February, with internal tests indicating its programming capabilities have surpassed current leading models [10] - Major AI models are experiencing rapid growth in user traffic, with ChatGPT leading with 870 million monthly active users, followed by Doubao (172 million), DeepSeek (145 million), and Yuanbao (33 million) [9][10] Group 3: Investment Opportunities - The AI industry is undergoing continuous catalysis, with commercial applications opening new possibilities, making the Guotai Zhongzheng Animation Game ETF Connect C (012729) a noteworthy investment [11] - The gaming industry is leveraging AI tools to optimize development efficiency and enhance user experience, driving down costs and increasing revenue potential [11] - The long-standing game model is becoming mainstream, with titles like Supernatural Action Group and Kingshot validating this trend, leading to a potential systematic increase in gaming sector valuations [11]

Group 1 - The gaming sector experienced a significant increase of 5.95% on January 12, with Kunlun Wanwei leading the gains [1] - The Shanghai Composite Index closed at 4165.29, up 1.09%, while the Shenzhen Component Index closed at 14366.91, up 1.75% [1] - The top-performing stocks in the gaming sector included Kunlun Wanwei, which rose by 19.99% to a closing price of 64.82, with a trading volume of 1.9846 million shares and a transaction value of 12.25 billion [1] Group 2 - The gaming sector saw a net inflow of 1.418 billion in main funds, while retail investors experienced a net outflow of 798 million [2][3] - The stock Kunlun Wanwei had a main fund net inflow of 277 million, representing 2.26% of its total trading volume [3] - Other notable stocks included Yaoji Technology with a main fund net inflow of 251 million, accounting for 20.96% of its trading volume [3] Group 3 - The gaming ETF (product code: 159869) tracking the China Securities Animation and Gaming Index increased by 9.79% over the past five days, with a current P/E ratio of 40.89 [5] - The gaming ETF's latest share count is 9.3 billion, having increased by 94 million, with a net subscription of 140 million [5]

Group 1 - The AI application sector is experiencing significant growth, with the largest gaming ETF (159869) rising nearly 6% as of January 12, indicating strong market sentiment [1] - As of January 9, the gaming ETF (159869) has reached a scale of 14.705 billion yuan, with a net inflow of funds totaling 841 million yuan over four consecutive trading days, providing investors with a convenient tool for investing in leading A-share gaming companies [1] Group 2 - AI is enhancing the gaming industry by improving multi-modal capabilities and innovative integration, allowing AI to penetrate core creative areas such as gameplay design and narrative structure [2] - Tencent reports that AI-enabled character animation production cycles at Photon Studio have been shortened by 40%, with prototype validation times for certain character skills reduced from two weeks to three days [2] - The gaming sector is undergoing transformations in AI, content, and commercialization models, with the gaming ETF (159869) tracking the performance of A-share listed companies in the animation and gaming industry, highlighting investment opportunities [2]

Core Viewpoint - Bilibili's stock price increased by nearly 7% at the close, with a current rise of 6.62%, reaching HKD 238.2, and a trading volume of HKD 1.148 billion [1] Group 1: Financial Performance - Jefferies forecasts that Bilibili's revenue and non-GAAP operating profit for Q4 2025 will meet expectations, with total revenue projected to grow approximately 5% year-on-year, reaching RMB 8.1 billion [1] - Longcheng Securities reports that Bilibili's AI-driven content production is boosting user numbers to new highs, with AI video material consumption accounting for over 60% and smart advertising consumption exceeding 45%, leading to an overall efficiency improvement of more than 10% [1] Group 2: Strategic Focus - Jefferies highlights that Bilibili's gaming strategy focuses on maintaining a leading position in vertical categories, long-term product operations, and appealing to younger generations, with the game "Escape from Duckkov" achieving success [1] - Longcheng Securities emphasizes the importance of AI in enhancing marketing material production efficiency and advertising effectiveness, while also noting the stable performance of the game "Three Kingdoms: Strategizing the World" and monitoring the progress of new game releases [1]

Core Viewpoint - Sanqi Interactive Entertainment has seen a significant stock price increase, with a 21.13% rise over the past seven days, indicating strong market performance and investor interest [1][2]. Group 1: Company Overview - Sanqi Interactive Entertainment is based in Wuhu, Anhui Province, and was established on May 26, 1995, with its stock listed on March 2, 2011 [1]. - The company's main business involves the research, development, publishing, and operation of mobile and web games, with revenue composition being 97.09% from mobile games, 2.08% from web games, and 0.83% from other sources [1]. Group 2: Stock Performance - As of the latest report, Sanqi Interactive's stock price is 28.77 CNY per share, with a trading volume of 1.806 billion CNY and a turnover rate of 4.01%, leading to a total market capitalization of 63.646 billion CNY [1]. - The stock has experienced a continuous increase for seven days, with a total gain of 21.13% during this period [1]. Group 3: Fund Holdings - Nord Fund has a significant position in Sanqi Interactive, with its Nord Huazheng Value Selected 50 Index Fund holding 15,000 shares, representing 2% of the fund's net value, making it the tenth largest holding [2]. - The fund has realized a floating profit of approximately 22,200 CNY today and a total of 71,400 CNY during the seven-day increase [2]. - The Nord Huazheng Value Selected 50 Index Fund was established on April 29, 2025, with a current size of 15.8091 million CNY and a year-to-date return of 3.66% [2].

Investment Rating - The industry investment rating is "Positive" and maintained [7] Core Insights - The new game cycle in January continues with several products like "Duck Duck Goose" and "Heart Town" launching successfully. The trend of Chinese games going overseas remains strong, with leading companies like Dd and others showing impressive performance. The industry is expected to see a series of new game launches, leading to continuous catalysts [2][4] - The gaming sector's product cycle in 2026 shows strong sustainability and performance certainty, indicating room for valuation improvement. It is recommended to continue focusing on investment opportunities in the gaming sector, with relevant companies including Giant Network, Kaiying Network, Perfect World, 37 Interactive, G-bits, Yaoji Technology, Shengtian Network, Tencent Holdings, and Xindong Company [2][4] Summary by Sections New Game Launches - The January new game cycle has seen successful launches, including "Duck Duck Goose," which has gained significant popularity, and "Heart Town," which topped the global free charts in over 50 regions during its pre-download phase [2][4] - The performance of these new games validates the importance of global expansion and social interaction as growth engines in the gaming industry, with a strategy of "evergreen games + globalization" becoming key for leading companies [10] Overseas Market Performance - The overseas gaming market continues to thrive, with Dd's "Whiteout Survival" achieving over $4 billion in global revenue by December 2025. Other games like "Tasty Travels: Merge Game" and "Truck Star" have also shown strong performance in the overseas market [10] Future Game Releases - Upcoming game releases include Tencent's "Counter-Strike: Future" on January 13, "Rock Kingdom: World" on March 26, and several others from various companies, indicating a busy launch schedule that may catalyze further industry growth [10]

Group 1 - Lin Yunfeng, a prominent game producer at NetEase, officially left the company on January 7 after over 20 years of service [1] - Lin was a key figure in the development of the "Fantasy Westward Journey" series and had previously served as the head of the Dream Division before being reassigned to the online games division [1] - The Dream Division will undergo internal adjustments by October 2025, with Wu Weicong taking over as the new head, while mobile projects will be managed by the Sea God Division [1] Group 2 - NetEase has received approval for new game titles, including the open-world game "Infinite," life simulation game "Starry Friend," and RTS game "Legion War" [2] - The game "Forgotten Sea," developed by NetEase's Joker Studio, has announced a new gameplay preview and is currently recruiting for testing, with a planned release in 2026 [2]

Core Viewpoint - The gaming sector is experiencing a significant upward trend, with the gaming ETF (159869) rising over 1.5% and all constituent stocks showing positive performance, indicating strong investor interest and potential growth in the industry [1]. Group 1: ETF Performance - As of January 8, the gaming ETF (159869) has reached a scale of 14.103 billion yuan, attracting a total of 1.394 billion yuan in the last 10 trading days, providing investors with a convenient tool to invest in leading A-share gaming companies [1]. - Notable stocks within the ETF include BoRui Communication, which hit the daily limit, and others like ShiFeng Culture, FuChun Co., ShenZhou TaiYue, ZheShu Culture, and ShunNet Technology showing significant gains [1]. Group 2: Publisher Revenue Insights - By December 2025, the top 10 mobile game publishers in China are expected to maintain a stable revenue ranking, with Tencent, DianDian Interactive, and Lemon Microfun leading the list [1]. - DianDian Interactive has achieved over 4 billion USD in global cumulative revenue from its games "Whiteout Survival" and "Kingshot," securing its second position in the rankings [1]. - Lemon Microfun has seen a remarkable year-on-year revenue increase of 165%, driven by Christmas and New Year themed events across its various synthesis games [1]. Group 3: Industry Outlook - According to Dongfang Securities, multiple regions have proposed pilot programs for local processing of game licenses, which is expected to enhance the efficiency of license approvals and accelerate game supply [1]. - The overall game supply is projected to increase, with a robust pipeline of new products anticipated for 2026 [1]. - The gaming sector is poised for transformation through advancements in AI, content, and commercialization models, highlighting investment opportunities in the gaming ETF (159869) that tracks the performance of A-share listed companies in the animation and gaming industry [1].