Summary of Perfect World Conference Call Company Overview - Perfect World is one of the first domestic PC game manufacturers in China, with a strong technical foundation and rich gaming operation experience, particularly in product quality and long lifecycle operations, laying a solid foundation for future development [2][4] Key Points Industry and Company Performance - The company's performance exhibits significant product cyclicality, with major new game launches leading to substantial performance boosts, while older products may experience a decline, resulting in flat performance [2][4] - Anticipated new game "Yi Huan" is expected to significantly enhance company performance upon its launch at the end of the year, with early signs of performance improvement already visible [2][3][5] Upcoming Products - The highly anticipated open-world RPG "Yi Huan" combines elements of anime and cyberpunk, showing promising test results with strong core metrics, expected to contribute significantly to performance post-launch [2][6][7] - Other notable products include "Persona," "Night Shadow," and "P5X," which have performed well in overseas markets, with "P5X" ranking high on Japan's iPhone sales charts [2][9] Historical Context and Future Outlook - Perfect World has a rich history and strong R&D capabilities, having been a key player in the rise of online gaming in China since the early 2000s [4] - The company is expected to enter a phase of sustained performance growth starting in 2025, particularly with the launch of "Yi Huan," which is projected to accelerate profit growth [3][11] Business Adjustments - Recent years have seen performance impacted by business adjustments and impairment provisions, particularly in the overseas console team and film business, which have now stabilized [10][12] - The film business has shifted towards a quality-over-quantity strategy, focusing on high-quality platform-customized dramas, which has helped stabilize operations and support the core gaming business [12] Investment Recommendations - Investors are advised to consider early positioning in Perfect World due to its low current valuation and the potential growth opportunities arising from the launch of "Yi Huan," which could lead to dual-driven performance and valuation growth [3][13]

Core Viewpoint - The acquisition of a 26.67% stake in Wuhan Yihua Kaitian by Yuewen Group for 324.8 million yuan marks a significant shift in the ownership structure of the popular anime "Ling Cage," increasing Yuewen's stake from 5.17% to 31.48%, while Tencent's total stake will rise to 61.8187%, making it the largest shareholder and gaining full control over the "Ling Cage" IP [1] Group 1: Acquisition Details - Yuewen Group announced the acquisition of a 26.67% stake in Wuhan Yihua Kaitian for 324.8 million yuan [1] - Following the acquisition, Yuewen's ownership will increase from 5.17% to 31.48% [1] - Tencent, through its subsidiaries, will hold a combined 61.8187% stake in Yihua Kaitian, becoming the largest shareholder [1] Group 2: Impact on "Ling Cage" Series - "Ling Cage" premiered in 2019 on Bilibili, achieving a viewership of 690 million and winning the "Golden Dragon Award" for Best Series Animation [1] - The second season of "Ling Cage" premiered on May 23, 2023, and has garnered 130 million views so far [1] - The future of the upcoming "Ling Cage 3" has become a topic of discussion among fans following the acquisition news [1] Group 3: Tencent's Position in the Anime Industry - Tencent is recognized as the leading platform for domestic animation, having established a strong presence through its "Hundred Series Plan" initiated in 2017 [4] - The company has invested in several prominent animation companies, including Yihua Kaitian, to secure a significant share of the market [4] - Tencent's dominance is evident, with it producing eight out of ten major annual anime series in 2024 [7] Group 4: Challenges and Criticism - Despite Tencent's success, there are concerns regarding the quality of its anime, with recent seasons of popular series like "Bad People" receiving criticism [3] - The influence of fan culture on anime production has led to issues, such as the prioritization of fan preferences over narrative coherence [8][9] - The company faces challenges in balancing the demands of its primarily female fanbase with the traditional male-oriented content of its source material [13][17] Group 5: Competitive Landscape - Other platforms like iQIYI and Bilibili are actively developing their anime offerings, with iQIYI announcing plans for 40 new series, including seven major annual titles [16] - Bilibili continues to rely on its anime business as a key revenue driver, with successful series like "Mortal Cultivation" and "Gods' Record" [16] - The competitive environment suggests that while Tencent currently leads, it must adapt to maintain its market position amid rising competition [17][18]

Group 1 - The release of "Nezha 2" with a box office of 15.2 billion RMB has revitalized the Chinese animation market, prompting major video platforms to respond quickly with increased production of animated content [1] - Over 30 new animated works have been launched across four major platforms this year, including 15 annual series, indicating a strategic shift towards high-investment, long-cycle content to enhance user engagement [1][2] - Platforms are increasingly forming deeper partnerships with animation companies, prioritizing long-term projects like annual and seasonal series, leading to a concentration of industry resources towards top-tier content [1][2] Group 2 - Youku is focusing on expanding its IP universe and annual series, deepening its investment ties with production companies, particularly in the "New National Style" genre [3][4] - The collaboration between Youku and production companies like Xuanji Technology and Zhongying Nian Nian is becoming more pronounced, with significant revenue contributions from these partnerships [5][6] - Youku's strategy includes leveraging successful IPs like "Shan Yao" and "Cang Yuan Tu" to enhance its content offerings and maintain competitive advantage in the animation sector [9] Group 3 - iQIYI has announced a significant increase in its annual series lineup to seven, with a focus on high-quality adaptations from popular web novels, indicating a shift towards larger-scale productions [10][11] - The partnership with Qimao, which provides a steady supply of quality IPs, is central to iQIYI's strategy for maximizing IP value through adaptations [12][13] - iQIYI's collaboration with notable authors and production companies aims to create expansive narrative universes, enhancing the overall quality and appeal of its animated content [13][14] Group 4 - Tencent Video is leveraging its extensive IP library from the Reading Literature Group, focusing on web novel adaptations to maintain a stable output of animated series [15][16] - Six out of nine annual series produced by Tencent are handled by its invested companies, showcasing a strong integration of production resources [18] - The popularity of Tencent's annual series is reflected in their consistent ranking among the top animated shows, indicating effective audience engagement strategies [19]

Market Overview - On April 28, the toy and animation sectors experienced a collective surge, with companies like Chuangyuan Co. rising over 15% and Zhangyue Technology hitting the daily limit [1] - Other companies such as Tianzhou Culture, Huali Technology, Shifeng Culture, Gao Le Co., Xinghui Entertainment, and Aofei Entertainment also showed strong performance [1] Company Highlights - Chuangyuan Co. (300703.SZ) engaged in IP collaboration with Zhihu and Dunhuang Museum, launching products like the "Feiniaojiji" and Dunhuang cultural series, with a stock price of 15.43, up 7.90% [2] - Perfect World (002624.SZ) focused on IP development, leveraging both original and external IPs, with a stock price of 13.07, up 6.43% [2] - Huali Technology (301011.SZ) is promoting gaming equipment and anime IP derivative products, with a stock price of 26.13, up 4.52% [2] - Gao Le Co. (002348.SZ) has major IP collaborations with brands like Disney and Hello Kitty, with a stock price of 3.26, up 4.49% [2] - Shifeng Culture (002862.SZ) is actively collaborating with high-quality IPs and developing original toys, with a stock price of 23.90, up 3.42% [2] Event Highlights - On April 28, Pop Mart's stock surged over 12%, reaching a historical high [3] - On April 25, Pop Mart topped the U.S. App Store shopping chart and ranked fourth overall [4] - The release of Pop Mart's popular IP LABUBU's third-generation plush product led to trending searches on social media [4] Industry Insights - The global toy industry is entering a historical opportunity period characterized by cross-regional IP penetration, accelerated innovation, and improved channel networks [6] - The shift in consumer preferences from traditional toys to two-dimensional IP culture among younger generations is expected to sustain high demand for collectible toys [6] - The toy market is anticipated to benefit from popular film and streaming IPs by 2025, stimulating interest among young consumers [6] - Emerging categories like trendy toys, card games, and building toys are expected to see significant growth, with companies possessing IP, product, and channel advantages being noteworthy [6] - The AI toy market is still in its early stages, with potential for Chinese toy companies to leverage their manufacturing capabilities for competitive advantage in international markets [6]