Core Viewpoint - The Japan Economic Federation has released a proposal for the sustainable growth of the anime industry, advocating for the adaptation of previously canceled manga into animation, highlighting the industry's potential despite facing systemic risks [1][5][25]. Group 1: Industry Background - The anime industry in Japan has been a significant cultural and economic pillar since its inception, with notable successes in the early 2000s, such as "Naruto" and "Spirited Away," which contributed to its global popularity [5][7]. - In 2002, the revenue from Japanese animated products exported to the U.S. was approximately $4.359 billion, significantly surpassing the total revenue from steel exports to the same market [7]. - The Japanese government has recognized the anime industry as a key economic sector, with policies aimed at enhancing its international competitiveness [9]. Group 2: Current Challenges - The anime industry is experiencing a bifurcation, with about 43.8% of full-service studios reporting increased revenues, while 33.3% of outsourcing studios face declining profits [10]. - Rising production costs and the depreciation of the yen have made it increasingly difficult for small to medium-sized animation studios to survive, leading to a wave of closures [14]. - The industry faces a talent shortage, with 47.3% of workers being freelancers, contributing to instability within the sector [16]. Group 3: Global Competition - The rise of South Korean webtoons has significantly impacted the Japanese anime market, with the South Korean market growing from 724 billion won in 2017 to over 2 trillion won in 2023 [17][19]. - Chinese companies are leveraging advanced technology, such as AI, to reduce production costs, with AI penetration rates in China and South Korea at 62% and 57%, respectively, compared to Japan's 8% [22]. - Chinese investments in Japanese anime companies are increasing, with companies like Tencent and Bilibili actively participating in IP development [22]. Group 4: Proposed Solutions - The Japan Economic Federation's proposal includes creating a global crowdfunding platform for fans to invest in the adaptation of canceled manga into animation, although the implementation details are still under development [25]. - The success of this initiative will depend on the industry's ability to adapt to the fast-paced demands of the streaming era, moving away from traditional production processes [27].

Core Viewpoint - The company reported a significant improvement in its financial performance for Q1 2025, with a notable increase in revenue and adjusted net profit compared to the same period last year, indicating a positive growth trajectory in user engagement and monetization strategies [1][2]. Group 1: Operational Performance - In Q1 2025, the platform's user traffic, stickiness, and payment rate all saw further growth, with Monthly Active Users (MAU) increasing by 8% year-on-year to 368 million, and Daily Active Users (DAU) rising by 5% to 107 million [1]. - The average daily usage time per user increased from 105 minutes in Q1 2024 to 108 minutes in Q1 2025, while Average Revenue Per User (ARPU) significantly improved from 17 yuan to 19 yuan year-on-year [1]. Group 2: Key Financial Metrics - The company achieved a revenue of 7.003 billion yuan in Q1 2025, representing a year-on-year increase of 24% but a quarter-on-quarter decrease of 9% [2]. - The revenue breakdown includes mobile gaming at 1.731 billion yuan (YoY +76%, QoQ -4%), live streaming and value-added services at 2.807 billion yuan (YoY +11%, QoQ -9%), advertising at 1.998 billion yuan (YoY +20%, QoQ -16%), and IP derivatives and other businesses at 467 million yuan (YoY -4%, QoQ slightly up) [2]. - The gross margin stood at 36%, an increase of 8 percentage points year-on-year, with various expense ratios showing continued optimization [2]. Group 3: Mobile Gaming Business - The exclusive licensed game "Three Kingdoms: Strategize the World" performed exceptionally well, driving mobile gaming revenue up by 76% year-on-year to 1.731 billion yuan [3]. - The company anticipates that the game will develop into a long-term attractive title, with a significant update planned for May 31, which is expected to further enhance user engagement [3]. Group 4: Live Streaming and Value-Added Services - Revenue from live streaming and value-added services grew by 11% year-on-year to 2.807 billion yuan, driven by increased earnings from these segments [4]. - The number of monthly paying users reached a record high of 32 million, and the total number of paying members increased to 264 million, reflecting a 12% year-on-year growth [4]. Group 5: Advertising Business - Revenue from advertising increased by 20% year-on-year to 1.998 billion yuan, with the number of advertisers growing by over 35% [5]. - AI-driven advertising creation and placement contributed to a more than 30% increase in performance advertising, while brand and native ads showed stable growth [5]. Group 6: Profit Forecast and Investment Rating - The company forecasts revenues of 30.5 billion yuan, 34 billion yuan, and 37.6 billion yuan for 2025E, 2026E, and 2027E respectively, with corresponding NON-GAAP net profits of 2 billion yuan, 2.6 billion yuan, and 3.3 billion yuan [6]. - The company maintains a strong content ecosystem and user engagement, leading to an upward trend in monetization capabilities, with a target price of 168 yuan per share [6].

Core Insights - The article highlights the growing international presence of Chinese animation, showcasing successful titles and collaborations that have expanded their reach beyond domestic markets [3][4][6]. Group 1: Industry Trends - Chinese animation has increasingly moved towards international markets, with notable successes such as "Ne Zha" and "White Snake: Origin," which have achieved impressive box office results and critical acclaim abroad [4][6]. - The emergence of streaming platforms like Bilibili and Netflix has provided a more dynamic and flexible distribution channel for Chinese animated content, allowing for quicker feedback and broader audience reach compared to traditional cinema [4][5]. - The narrative style of Chinese animation is evolving, focusing on universal themes and human experiences, which helps in resonating with global audiences [6][7]. Group 2: Content and Cultural Integration - Recent works like "The King's Avatar" and "Time Agent" have successfully integrated Chinese cultural elements while addressing universal themes, enhancing their appeal to international viewers [7][8]. - The storytelling approach in Chinese animation is shifting from merely exporting cultural symbols to embedding deeper philosophical and emotional narratives that resonate with global audiences [8][9]. Group 3: Platform and Collaboration - Major platforms such as Bilibili, iQIYI, and Youku are collaborating with international production companies to enhance the quality and global appeal of their animated content, marking a shift towards a more collaborative production model [9][10]. - Bilibili has established a significant presence in the global market, with over 60 original IPs and nearly 1500 episodes of Chinese animation distributed worldwide, indicating a robust international distribution network [9][10].

Core Insights - The domestic animated film "Nezha: The Devil's Child" has topped the global animated box office, showcasing the rising prominence of Chinese animation in the global market [1] - The original Chinese animation "To Be Hero X," co-produced by Bilibili and Aniplex, has gained significant attention and viewership, with nearly 50 million views on Bilibili after just three episodes [3][21] - "To Be Hero X" has received high ratings on platforms like MyAnimeList, achieving a score of 8.49, making it the highest-rated original Chinese animation in the past two years [3][5] Industry Developments - The collaboration between Bilibili and Aniplex represents a new trend in the animation industry, potentially paving the way for more joint projects in the future [11] - "To Be Hero X" distinguishes itself from other popular domestic IP adaptations by presenting an original superhero narrative that explores complex themes such as human nature and self-worth [21][23] - The production quality of "To Be Hero X" is noted to be on par with global standards, utilizing a unique blend of 2D and 3D animation techniques, marking a significant milestone for domestic animation [23] Audience Reception - International fans have expressed surprise at the quality of "To Be Hero X," leading to a surge of fan-created content and discussions on social media platforms [20] - The animation's storytelling and character complexity have resonated with audiences, indicating that it is not merely a visual spectacle but a work with contemporary relevance and depth [23]