Industry Investment Rating - The industry investment rating is "Outperform" [1] Core Viewpoints - The report emphasizes the strong growth potential of the retail trade industry, supported by a favorable market environment and consumer spending trends [1][4] - The report highlights the importance of IP (Intellectual Property) in driving revenue and expanding market reach, particularly through cross-media strategies [5][9] Summary by Relevant Sections Industry Overview - The closing index level is 2332.96, with a 52-week high of 2501.51 and a low of 1731.43 [1] Investment Recommendations - Key companies in the IP industry include Pop Mart, Blucol, and Miniso, with investment ratings of "Buy" for Pop Mart and Blucol, while Miniso remains unrated [11] - Pop Mart's stock price is 273.00 HKD with a market cap of 366.6 billion HKD, and an estimated EPS of 4.99 for 2025 [11] - Blucol's stock price is 108.00 HKD with a market cap of 26.9 billion HKD, and an estimated EPS of 4.32 for 2025 [11] Company Analysis - Nintendo has transformed from a card company to a gaming giant, with a market value exceeding 100 billion USD and a player base of 128 million [16] - The company focuses on high-quality game IPs, emphasizing originality and fun, with successful franchises like Super Mario and Pokémon [18][23] Historical Development - Nintendo's history showcases its evolution from a card manufacturer to a leader in the gaming industry, with significant milestones in product innovation and market expansion [31][32] Cross-Media Strategy - Nintendo's IPs, such as Mario and Pokémon, have expanded beyond gaming into various media, enhancing their cultural significance and commercial value [65] - Mario's commercial value is estimated at 38 billion USD, while Pokémon's is the highest globally at 147 billion USD [53][65]

Core Insights - The article discusses the recent developments in the animation and IP industry, highlighting the growth and investment opportunities for companies like Xuanji Technology, Pinkfong, and Overlap [1][3][19]. Group 1: Xuanji Technology - Xuanji Technology reported a revenue of approximately 213 million RMB in the first half of 2025, marking a significant year-on-year increase of 68.9% [3]. - The company's net profit reached about 63.35 million RMB, showing a remarkable growth of 836.88% compared to the previous year [3]. - The growth is primarily driven by its core business segments, including digital content production, creation and licensing, and derivative product sales, with the latter experiencing a 132.2% increase in revenue [3][5]. Group 2: Pinkfong - Pinkfong, a South Korean children's content company, reported a revenue of approximately 239 million RMB in the first half of 2025, with a consolidated revenue of 97.368 billion KRW for 2024, reflecting an 11% year-on-year growth [10][12]. - The company's operating profit surged by 371% to 18.8 billion KRW in 2024, indicating strong financial performance [10]. - Pinkfong's revenue composition shows that content products, including videos and apps, are the main revenue drivers, accounting for 67.6% of its revenue in the first half of 2025 [17]. Group 3: Overlap - Overlap, which specializes in light novels and manga, received nearly 920 million JPY in investments from Pokémon and Shogakukan, increasing their shareholding by 9.13% [19][21]. - The company reported a total sales figure of 8.403 billion JPY for the fiscal year ending August 2024, with a year-on-year growth of 8% and an operating profit of 2.151 billion JPY, up 38% [24][25]. - Overlap's revenue is primarily derived from its own IP, which accounted for 88% of its total revenue in the 2024 fiscal year, while Pokémon-related products contribute a smaller portion [24].

Core Points - The U.S. Department of Homeland Security (DHS) released a controversial video on social media, likening immigration enforcement actions to the Pokémon series, which has sparked legal and ethical debates [1][2] - The video features a mix of law enforcement footage and Pokémon-themed visuals, including the use of the Pokémon theme song and card-style images of detainees [1] - Critics argue that the DHS's use of Pokémon's intellectual property may constitute copyright infringement and question the legality of a federal agency appropriating popular entertainment brands for its own promotion [1][2] Summary by Sections - **DHS Video Release**: The DHS published a video titled "Catch Them All," drawing parallels between immigration enforcement and Pokémon, which has led to significant backlash online [1] - **Public Reaction**: Social media users expressed outrage, questioning whether taxpayer money was used for such promotional materials and calling for Nintendo's response regarding the use of its intellectual property [2] - **Legal and Ethical Concerns**: The video has raised serious ethical and legal issues, with critics highlighting potential copyright violations and the implications of using a children's entertainment brand in a law enforcement context [1][2] - **Policy Context**: The video release occurs amid the Trump administration's strict immigration policies, which have faced numerous legal challenges and controversies since taking office [2]

Core Viewpoint - The U.S. Department of Homeland Security (DHS) faced significant backlash after releasing a video that likened immigration enforcement actions to the Pokémon franchise, raising legal and ethical concerns regarding copyright infringement and the appropriateness of using popular entertainment for governmental promotion [1][4]. Group 1: Video Content and Public Reaction - The one-minute video combined footage of law enforcement actions with the opening animation of Pokémon, utilizing the theme song and similar typography, concluding with a display of detainees' photos in a Pokémon card format [4]. - The video sparked strong online resistance, with critics arguing that the DHS's use of Pokémon's slogan and visual style could constitute copyright infringement, questioning the legality of a federal agency appropriating a popular entertainment brand for its own promotion [4]. - Social media users expressed concerns about taxpayer money being used for such promotional materials, with one user directly questioning Nintendo's consent for the use of their intellectual property [4]. Group 2: Ethical and Legal Implications - The video raised ethical issues, particularly highlighted by a senior researcher from the American Immigration Council, who pointed out that the footage included a scene of a forcibly entered home where American citizens were handcuffed without a search warrant [4]. - The DHS's actions have been criticized for potentially exploiting a beloved children's franchise to promote immigration enforcement, leading to discussions about the appropriateness of such tactics [4]. - The Trump administration's hardline immigration policies, which have been in place since January, have already led to various legal disputes and controversies, further complicating the public's perception of the DHS's actions [5].

Summary of Evergreen Games Conference Call Industry Overview - The conference focuses on the evergreen games sector, highlighting the potential for significant revenue growth through effective operations, as demonstrated by Tencent's Supercell game "Clash Royale," which achieved $140 million in revenue in Q2 2025, a 90% quarter-over-quarter increase and over 40% year-over-year growth [2][3] - Companies with evergreen game potential typically possess high Daily Active Users (DAU) and social gameplay attributes, or own classic native IPs that can be continuously iterated and updated, particularly in SLG (Simulation and Strategy Games) and MMO (Massively Multiplayer Online) genres, which have high player sunk costs and stronger user retention [2][5] Key Insights and Arguments - Evergreen game companies generally have valuations above the industry average, with companies like Nintendo, Take-Two, and Nexon showing strong forward Price-to-Earnings (PE) ratios, indicating high market expectations for future earnings [2][6] - As of early 2025, Nintendo's forward PE was 36, TikTok's was 27, and Nexon's was 26, averaging 26, which is higher than the average valuation of the A-share and Hong Kong game sectors, which is below 20 [7] - The operational methodology for evergreen games includes simple content updates, seasonal updates, and continuous iteration of core gameplay and monetization strategies, creating a platform that encourages ongoing player engagement and spending [9][10] Company-Specific Strategies - Tencent's strategy for 2025 emphasizes the operation of headlining games while adjusting its organizational structure to enhance producer incentives, focusing on long-term development and middle-tier games like "Crossfire" and "League of Legends" [4][11] - Nintendo aims to maintain user engagement by expanding gameplay on its platforms, creating "infinite" products that encourage continuous player interaction and consumption [12][13] - Tencent's overseas game revenue accounts for approximately 30%, with Supercell, Riot Games, and Miniclip being significant contributors [14] Potential Companies for Evergreen Games - Companies with successful evergreen game potential typically have large DAU advantages and social gameplay attributes, such as Tencent and Giant Network's new title "Supernatural Action Team" [5] - Companies with classic native IPs that can be continuously updated, like Nintendo with its Mario and Pokémon franchises, and Nexon with its Dungeon Fighter Online (DNF) IP, also show strong potential [5][29] - SLG and MMO games are identified as having longer lifecycle potential due to their inherent player engagement characteristics [30] Valuation Insights - Evergreen game companies are generally valued significantly higher than the industry average, with stable and continuous revenue growth being a key factor supporting these high valuations [6] - The report highlights the importance of maintaining a balance between hardware and software revenue, with Nintendo's software revenue becoming a more significant contributor as hardware sales plateaued [18][19] Conclusion - The evergreen games sector is characterized by companies that can maintain player engagement through continuous updates and strong IPs, leading to sustained revenue growth and higher valuations compared to the broader gaming industry. The strategies employed by leading companies like Tencent and Nintendo serve as benchmarks for success in this evolving market.

Group 1 - The core argument revolves around the ongoing debate about the Nintendo Switch 2, which is priced at 3000 yuan and has hardware that is considered five years behind the times, yet its sales may still perform well due to exclusive games [1][3][39] - Nintendo's strategy with the Switch 2 is primarily about maintaining its market position rather than innovating, focusing on exclusive titles like Mario, Zelda, and Pokémon to drive sales [5][6][8] - Despite criticisms regarding its launch lineup, the Switch 2 has generated significant pre-order interest globally, indicating strong market demand [9][10] Group 2 - Sony is reportedly developing a next-generation handheld console that will be able to run games locally, unlike the current PlayStation Portal, which only streams games [14][15] - The new Sony handheld is expected to target a more hardcore gaming audience, contrasting with Nintendo's broader market approach [18][19] - Microsoft is shifting its focus from developing a dedicated Xbox handheld to optimizing Windows 11 for gaming, indicating a strategic pivot towards software and services rather than hardware [22][27] Group 3 - The competition for Nintendo is not just from other gaming consoles but also from mobile gaming, which has significantly impacted the gaming landscape [40][41] - Nintendo aims to expand its gaming ecosystem to attract a wider audience, including casual gamers who may prefer mobile gaming experiences [42][44] - The company has diversified its revenue streams beyond gaming, positioning itself as an entertainment company while maintaining a strong focus on delivering enjoyable gaming experiences [49][50]