Core Viewpoint - The company, Xuanji Technology, has received approval for its listing application on the National Equities Exchange and Quotations, marking a significant step in its capital market strategy after years of preparation [1] Group 1: Business Overview - Xuanji Technology has been deeply involved in the animation industry for nearly 20 years, focusing on both animation outsourcing and original animation creation [1][2] - The company’s revenue is projected to be between 260 million to 320 million yuan from 2022 to 2024, with net profit ranging from 37 million to 80 million yuan [2] - The main business segments include digital content creation and licensing, digital content production services, and merchandise sales [2] Group 2: Original IP and Licensing - The company has invested significantly in acquiring original IPs, including a permanent license for the novel "Qin Shi Ming Yue" at a cost of 30.5 million yuan [4] - Xuanji Technology has a diverse portfolio of IPs, including "Qin Shi Ming Yue," "Wu Geng Ji," and others, which are crucial for generating animation and game adaptation licensing revenue [4][5] - The company’s IP licensing revenue has been stable, contributing around 10% to total revenue during the reporting period [7] Group 3: Revenue Breakdown - In 2024, the digital content production service accounted for 88.05% of total revenue, while digital content creation and licensing contributed 9.15% [6] - The company generated over 200 million yuan from major projects like "Douluo Dalu" and "Tian Bao Fu Yao Lu," highlighting the success of its production services [9][11] - Merchandise sales from its original IPs generated between 4 million to 9 million yuan, representing a smaller portion of total revenue [11] Group 4: Client Relationships - The company has established long-term relationships with major clients, including Tencent, Youku, and Bilibili, which account for approximately 90% of total revenue [17] - Tencent is the largest client, contributing between 170 million to 210 million yuan annually, representing 56% to 77% of total revenue [17] - The company has also collaborated with various game developers for IP licensing, with notable clients including NetEase and Shanghai Junmeng [20][21] Group 5: Talent and Operational Structure - The company employs around 768 staff, with a significant portion being production personnel, reflecting the labor-intensive nature of the animation industry [13] - Direct labor costs account for over 70% of operational expenses, with average salaries for production staff exceeding industry averages [14][15] - The company has invested in office and accommodation facilities to attract and retain talent, which is critical for maintaining its competitive edge [13] Group 6: Financial Performance and Future Outlook - The company reported a revenue of 63.37 million yuan in early 2025, a 134% increase year-on-year, with a net profit of approximately 18.69 million yuan [25] - Xuanji Technology holds contracts worth 580 million yuan for ongoing projects, indicating a strong pipeline for future revenue [25] - The company remains optimistic about its future performance, supported by a solid order backlog and ongoing client relationships [25]

Core Insights - The director-centered system is the main principle of Chinese animation companies, with directors becoming the core asset of the industry [1] - The industry is experiencing rapid growth, with a significant increase in production capacity and talent reserves over the past three years [1][2] - A total of 83 representative directors have been selected from over 320 directors, categorized into six types: "Meritorious," "Senior," "Core," "Rookie," "Dark Horse," and "Expected" [2][3] Group 1: Director-Centered System - The director is increasingly viewed as the key to the quality of animated works, with fans judging projects based on the director's reputation [1] - The emergence of a star effect for directors is noted, as they become the focal point of industry attention [1] - The director-centered system has led to increased pressure on directors, with many transitioning to supervisory roles while nurturing younger talent [1][2] Group 2: Industry Growth and Talent Development - The analysis covers over 340 animated series launched between January 2022 and April 2025, indicating a substantial growth in the industry [1][2] - Many established directors are now mentoring younger creators, contributing to a diverse talent pool [2] - The average development cycle for directors is long, with many needing years of experience to refine their skills [3] Group 3: Director Categories - The selected directors are categorized into six types based on their experience and contributions, reflecting the diversity in skills and styles within the industry [2][3] - "Meritorious" directors have over 10 years of experience and have created multiple benchmark works, while "Senior" directors have over 8 years and at least three works [3] - "Rookie" directors are those with less than three years of experience but show promise, while "Dark Horse" directors have gained fame quickly [2][3]

Core Insights - Guangzhou is emerging as a significant player in the gaming industry, with a focus on creating a "Gaming Valley" to enhance its competitive edge in the Greater Bay Area [1][9] - The gaming industry in Guangzhou has seen substantial growth, with a market size reaching 140.67 billion yuan in 2024 and over 6,783 gaming companies operating in the region [2][10] - New policies and infrastructure developments are being introduced to support the gaming industry, including the establishment of a gaming industry service center and specialized esports venues [5][9] Industry Development - The "Gaming Valley" in Guangzhou is home to over 200 gaming companies, creating a comprehensive ecosystem that includes game planning, design, operation, and international expansion [3][10] - Companies like Sekai Group have reported significant growth, with a compound annual growth rate exceeding 50% over the past three years, indicating a thriving gaming market [2][3] - The gaming industry is structured in a pyramid model, comprising large gaming enterprises, small and medium-sized companies, and innovative studios, fostering a collaborative development environment [10] Policy and Infrastructure - A new gaming industry service center is being established in the Yuzhu area, providing a range of services including regulatory support and talent development [4][5] - The Huangpu District is set to introduce attractive policies to support the gaming and esports sectors, aiming to create specialized gaming towns and venues [9][10] - The Guangdong Provincial Gaming Industry Association is actively involved in providing a one-stop support system for gaming companies, enhancing operational efficiency and resource allocation [5][6] Future Prospects - The gaming industry in Guangzhou is expected to continue its upward trajectory, with plans for further integration with other sectors such as tourism and education [10] - The establishment of the "China Software Gaming Valley" project, with a total investment of 4.5 billion yuan, aims to create a significant industrial space for gaming development [8] - Experts suggest that Guangzhou's gaming industry should leverage its strengths to become a global benchmark for digital cultural industries [9][10]