Core Viewpoints - The report highlights a mixed performance in the A-share market, with the Shanghai Composite Index down by 0.07% and the Shenzhen Component Index and ChiNext Index up by 0.39% and 0.59% respectively, indicating a divergence in market sentiment [1] - The report notes that the Ministry of Commerce and other departments have optimized the exit tax refund policy to stimulate inbound consumption, lowering the minimum refund threshold from 500 yuan to 200 yuan and increasing the cash refund limit from 10,000 yuan to 20,000 yuan [2] - The Central Political Bureau emphasized the importance of self-reliance and application-oriented development in artificial intelligence, aiming for a healthy and orderly advancement of AI technology [2] Market Performance - The report provides a summary of domestic market performance, with the Shanghai Composite Index closing at 3,295.06 points, down 0.07%, while the Shenzhen Component Index and ChiNext Index saw increases of 0.39% and 0.59% respectively [4] - Internationally, major indices such as the Dow Jones and S&P 500 saw slight increases, with the Dow up 0.05% and the S&P 500 up 0.74% [4] Industry Insights - The report discusses the ongoing optimization of policies to stabilize the consumption sector, with a focus on increasing income for low- and middle-income groups and promoting service consumption [7] - The Central Political Bureau's meeting on April 25 highlighted the establishment of new policy financial tools to support consumption and stabilize foreign trade, indicating a proactive approach to economic management [6][7] - The report emphasizes the potential for growth in the gaming industry, with the approval of multiple game titles, including Tencent's "Path of Exile: Ascendancy," reflecting a normalization in the issuance of game licenses [15] Investment Recommendations - The report suggests focusing on sectors that will benefit from policy support, including tourism, duty-free, hotel, and restaurant industries, as well as domestic beauty brands that are gaining market share [8] - In the real estate sector, the report indicates that the market is stabilizing, with expectations for continued policy support to enhance housing consumption [11][12] - The report highlights the importance of the AI and pharmaceutical sectors, recommending attention to AI drug development and smart healthcare supply chains as key growth areas [19]

Industry Developments - The Chinese government has introduced multiple favorable policies for the gaming industry, including support for game exports and the establishment of a "Game Art Design" undergraduate program [1][4][5] - The National Press and Publication Administration approved 127 new game licenses in April, with 118 being domestic games [1][6] Company Updates - Gigabit reported Q1 2025 revenue of 1.136 billion yuan, a year-on-year increase of 22.47%, and a net profit of 283 million yuan, up 11.82% [1][8] - Giant Network's 2024 net profit grew by 31.15%, with stable operations and significant growth in mini-game business [1][11] - Iceberg Network reported a net loss of 247 million yuan in 2024, a decline of approximately 190%, primarily due to high overseas marketing costs [1][9][10] - Perfect World experienced a 28.5% revenue decline in 2024 but rebounded in Q1 2025 with a revenue increase of 52.22% [1][12] - Youzu Network's 2024 revenue fell by 11.75%, but Q1 2025 showed a revenue increase of 7.29% [1][13] - Tencent announced 46 game updates at the SPARK 2025 conference, including 24 new games [1][14] - Ru Yi Jing Xiu partnered with NBA China to develop two mobile games, expanding into the sports gaming sector [1][15] - NetEase's global investment and cooperation president Simon Zhu announced his departure, with Li Riqiang taking over [1][16]

Core Viewpoint - The article discusses the current state of the Chinese gaming market, highlighting the challenges and opportunities for companies amidst a stagnant market environment, with a focus on the recent approval of new games and the implications for industry players [2][4]. Game Approval Insights - On April 21, the National Press and Publication Administration approved a total of 127 games, with 46 being "casual puzzle" games, accounting for 39% of the approved titles [2]. - Mobile games dominate the approvals, with over 110 titles, while only two pure PC games were approved [2]. - Tencent's game "Path of Exile: Ascendancy" has over 2 million pre-registrations, indicating strong market interest [2]. Market Trends - The overall Chinese gaming market has stagnated around 300 billion RMB for several years, with growth momentum diminishing [4]. - Companies are increasingly conservative in their game offerings, preferring to release genres and models that have been previously validated by the market [4]. - The article notes that the approval of games like "Legend of Maifa" and "Monopoly: Top Winner" reflects a trend towards established game types that have been successful in the past [4]. Industry Challenges - An industry analyst suggests that the market is not yet facing a demand bottleneck, but rather a lack of decision-makers and talent on the supply side [4]. - The current game offerings are characterized by significant homogeneity, limiting player choices and leading to a reliance on social gameplay mechanics, which may not be essential for engaging game experiences [4]. - The normalization of game approvals raises questions about how companies can succeed in a zero-sum market environment [4].

Group 1: Game Approval and Market Trends - In April 2024, a total of 127 game licenses were approved in China, including 118 domestic games and 9 imported games, indicating a stable monthly issuance of over 100 licenses [1] - The total number of approved games from January to April 2024 reached 489, with a notable increase in the approval rate for domestic games, providing certainty for major companies' new product launches [1] - The global mobile game market is projected to grow by 4.8% in 2024, reaching a market size of 635.57 billion yuan, with China's share expanding to 37.5% [2] Group 2: Financial Performance of Major Companies - Tencent's total revenue for 2024 is expected to be 660.3 billion yuan, with its gaming business revenue reaching 197.7 billion yuan, a year-on-year increase of approximately 9.9% [3] - Net revenue for NetEase in Q4 2024 was 26.7 billion yuan, with an annual total of 105.3 billion yuan, supported by strong performance from games like "Naraka: Bladepoint" and "World of Warcraft" [3][4] - Zhongjiu Mobile plans to launch a new game, "Code: Night Legend," in the first half of 2025, focusing on agile development and competitive products in the mini-game market [4]