Group 1 - The game ETF (159869) has experienced a narrow fluctuation, currently up by approximately 0.5%, with notable stocks such as Youzu Interactive hitting the daily limit, and others like Iceberg Network and Light Media rising over 1% [1] - The game ETF has seen continuous net inflows for 11 consecutive trading days, accumulating a total of 2.195 billion yuan, indicating strong investor interest [1] - In July, the approval volume of game licenses remained high, with 127 games approved, despite a decrease of 20 from June, maintaining a robust issuance level [1] Group 2 - The gaming sector is undergoing multiple catalysts including AI, content, and commercialization model transformations, with the game ETF tracking the performance of the A-share listed companies in the animation and gaming industry [2] - The annual gaming event ChinaJoy is approaching, presenting potential investment opportunities in the game ETF [2]

Investment Rating - The report maintains an "Accumulate" rating for the media sector, indicating a positive outlook for the industry [7]. Core Insights - The media sector saw a 2.09% increase during the week of July 21-25, driven by market momentum and positive expectations for mid-year reports [11][18]. - The report highlights optimism for the gaming sector and AI applications, particularly focusing on new investment opportunities in AI companionship, education, and toys, as well as companies with strong IP advantages [1][2]. - The issuance of 134 game licenses in July, including 127 domestic and 7 imported games, is expected to invigorate the gaming industry and enhance market diversity [3][21]. Summary by Sections Market Overview - The media sector's performance is noted with a 2.09% increase, while other sectors like coal and steel performed even better [11][14]. - The top gainers in the media sector include companies like Happiness Blue Sea and Xinhua Media, with significant weekly increases [14]. Sub-sector Insights - **Gaming**: Key companies to watch include ST Huatuo, Jibite, and Kaixin Network, with additional focus on Perfect World and Iceberg Network [2][18]. - **AI**: Companies such as Dou Shen Education and Sheng Tian Network are highlighted for their potential in AI applications [2][18]. - **Resource Integration**: Companies like China Vision Media and Guangxi Broadcasting are noted for their resource integration expectations [2][18]. - **State-owned Enterprises**: Companies such as Ciwen Media and Anhui New Media are included in this category [2][18]. - **Education**: Focus on companies like Xueda Education and Fenbi [2][18]. - **Hong Kong Stocks**: Attention is drawn to Alibaba, Tencent, and Pop Mart, among others, indicating an imminent industry explosion [2][18]. Key Events Review - The report discusses the recent updates in AI models, including the Qwen3 upgrade, which shows significant improvements in various capabilities [4][21]. - The anticipated launch of OpenAI's GPT-5 model is also mentioned, which aims to unify multiple internal technologies [5][21]. Sub-sector Data Tracking - The gaming sector is tracking popular upcoming games, with titles like "Modern Warships" and "Dungeon Castle 4" gaining attention [22]. - The box office for the week of July 21-25 reached approximately 508 million yuan, with top films including "The Lychee of Chang'an" and "Nanjing Photo Studio" [25][26]. - TV series and variety shows are also tracked, with "Morning Snow Record" and "Speed Racer" leading in viewership [27][28].

Investment Rating - The industry investment rating is "Outperform the Market," indicating a projected increase of over 10% in the industry index relative to the broader market within the next six months [9]. Core Insights - The report highlights that the issuance of game licenses remains high, with 127 domestic games and 7 imported games approved in July 2025. This reflects a robust supply side and a stable trend towards normalization in license issuance [2][7]. - Key titles that received approval include "Kingshot" by Diandian Interactive, which is expected to leverage its success in overseas markets to become a significant product in the domestic SLG (Simulation and Strategy Game) sector [2][3]. - Tencent's "The Finals," a PC-based FPS game, is also noted for its potential to become a dark horse in the FPS market, given its unique gameplay and adaptation for domestic players [3]. - The report emphasizes the strong performance of established IPs like "Diablo IV" and "Marvel's Secret Wars," which are anticipated to perform well in the domestic market due to their established fan bases and innovative gameplay mechanics [4][7]. Summary by Sections Industry Events - In July 2025, the National Press and Publication Administration announced the approval of 127 domestic games and 7 imported games, maintaining a high issuance rate [1][2]. Investment Highlights - The report indicates that 884 domestic games have been approved year-to-date, with July's approvals slightly down from June but still at a high level. Notable titles include "Kingshot," "The Finals," and "Diablo IV" [2][4]. - The report suggests that the gaming industry is on a recovery path, with a consistent release of licenses and a focus on diverse product offerings from leading companies [7]. Company-Specific Insights - Diandian Interactive's "Kingshot" is highlighted for its innovative gameplay that combines tower defense and simulation elements, aiming to cater to domestic players' preferences [2]. - Tencent's adaptation of "The Finals" is expected to enhance player experience through new modes and anti-cheat systems, positioning it well in the competitive FPS market [3]. - "Marvel's Secret Wars" is noted for its unique blend of strategy card and chess elements, leveraging its strong IP to attract players [4][7].