Core Insights - The gaming industry has emerged as a new focal point during the Double Eleven shopping festival, alongside traditional e-commerce platforms and apparel brands [1][2] - Various gaming companies, including Tencent, NetEase, and miHoYo, have adopted diverse strategies for live-streaming sales, moving beyond traditional discounting to engage players more interactively [1][3] Group 1: Marketing Strategies - Live-streaming sales have become a new extension of the gaming industry's content ecosystem and business model [2] - Companies are utilizing live-streaming to create entertaining consumption scenarios and transactional content, enhancing player engagement [3][16] - Tencent's games focus on resource leverage and limited-time offers, with high DAU products like "Escape from Tarkov" achieving over 10 million DAU [3][9] Group 2: Player Engagement - Live-streaming sessions serve as platforms for player interaction, allowing them to express concerns and ask questions about game balance and updates [10][28] - The live-streaming format has transformed into a space for both sales and community engagement, fostering trust and loyalty among players [10][27] Group 3: Sales Performance - NetEase's "Nirvana in Fire" mobile game achieved significant sales during its live-streaming event, ranking first on the sales leaderboard [7][9] - The "Nirvana in Fire" game previously generated over 25 million yuan in sales during a four-hour live-stream in August [9] Group 4: Industry Trends - The rise of live-streaming sales reflects a broader trend in the gaming industry, driven by increasing advertising costs and the need for more efficient growth strategies [28][30] - The gaming live-streaming market has seen a 56% increase in consumption scale compared to early 2024, with mobile game live-streaming accounting for over 30% of total ad spending [30]

Core Insights - The rise of the "search and extraction" (搜打撤) gaming genre has significantly revitalized the accompanying service industry, particularly the escort service known as "护航" [1][12] - The escort service has become highly addictive for players, leading to increased demand and a shift in player behavior towards seeking these services [4][5] - The market for gaming escorts is expanding rapidly, with projections indicating a substantial increase in users and market size in the coming years [12][14] Industry Overview - The "护航" service involves hiring escorts to help players gather resources in-game and safely extract them, thus reducing the risks associated with gameplay [2][5] - The current gaming landscape has seen a simplification of game mechanics, increasing player engagement and demand for escort services [9][11] - The escort service market is projected to reach 32 billion yuan by 2024, with a compound annual growth rate exceeding 35% [12][14] Market Dynamics - The escort service market is characterized by high competition, with many players and studios vying for attention, leading to a "卷" (intense competition) environment [14][17] - Successful escort studios often leverage connections with popular streamers or professional players to enhance their service offerings and pricing [16][19] - The influx of players seeking escort services has raised concerns about the impact on the overall gaming experience, prompting discussions about maintaining game balance and player satisfaction [19]

Core Insights - The iQOO 15 series is positioned as a leading performance flagship in the smartphone market, skipping the 14 series to emphasize a generational leap in product capabilities [1] - The device features top-tier specifications, including a 2K 144Hz display, self-developed Q3 gaming chip, and advanced camera systems, aiming to redefine the gaming smartphone category [3][11] Display Technology - The iQOO 15 is equipped with a high-quality 2K Samsung "Summit" display, utilizing 2K LEAD OLED technology, which enhances luminous efficiency by 40%, reduces power consumption by 44%, and extends lifespan by 50% [6] - The display's design eliminates traditional polarizing layers, allowing for nearly ten million pixel points to be precisely etched, resulting in superior color performance that exceeds P3 color gamut coverage by 1.18 times [6][8] - iQOO maintains a commitment to flat screens, believing they provide a better gaming experience by minimizing accidental touches and visual distortion [8] Self-Developed Chip - The Q3 chip represents a significant advancement in mobile gaming technology, featuring capabilities such as full-scene ray tracing and game super-resolution, marking a shift in the industry towards a "dual-chip era" [11][13] - The chip's architecture allows for enhanced performance and energy efficiency, enabling mobile gaming experiences that rival console graphics [11][14] Camera and Imaging - The iQOO 15 includes a comprehensive camera system with a 50MP main sensor, 50MP super telephoto, and 50MP ultra-wide lenses, along with a 32MP front camera, enhancing the photography experience [16] - The device incorporates advanced imaging technologies to improve detail and overall photo quality, addressing previous limitations in iQOO's imaging capabilities [16] Market Position and Strategy - The launch of the iQOO 15 series signifies a strategic shift from being an "e-sports specialist" to a "full-featured flagship," focusing on technology development and user experience [18] - iQOO has achieved significant market success, with the iQOO 13 becoming the best-selling flagship in the brand's history, and maintaining a leading market share in China [18][21] - The competitive landscape is evolving, with iQOO, Vivo, and Xiaomi forming a strong trio in the high-end smartphone market, collectively dominating the segment previously led by Apple [21][22]

Group 1 - A-shares opened higher on October 20, with the Shanghai Composite Index rising by 0.67%, the Shenzhen Component Index by 1.49%, and the ChiNext Index by 2.45% [1] - Technology stocks rebounded significantly, with CPO, computing power, and consumer electronics concepts leading the gains, while insurance stocks surged and gold stocks saw notable pullbacks [1] - The gaming sector opened strong, with the gaming ETF (159869) rising over 2%, and it recorded a net inflow of 2.421 billion yuan over the past 10 trading days, reflecting strong investor interest [1] Group 2 - From January to September 2025, the National Press and Publication Administration issued 1,195 domestic online game licenses, a year-on-year increase of 24.61% compared to 959 licenses in the same period of 2024 [2] - Jianghai Securities believes that the normalization of game license issuance indicates ongoing regulatory support for the gaming industry, which has strong cash flow and increasing policy backing [2] - The gaming sector is expected to benefit from multiple catalysts, including AI, content, and commercialization model transformations, making the gaming ETF (159869) an attractive investment opportunity [2]

Company Overview - The company continues to show strong performance in its gaming business, with robust growth in advertising, financial services, and enterprise services, indicating sustained high-quality growth [1][2]. Gaming Business - For Q3 2025, domestic game revenue is expected to maintain a rapid growth rate of 11% year-on-year, particularly in the shooting game sector, with notable daily active users (DAU) for titles like "Peacekeeper Elite" exceeding 33 million, "Delta Action" surpassing 30 million, and "Dark Zone Breakthrough" breaking 10 million [1]. - Internationally, the company anticipates a 25% year-on-year increase in overseas game revenue for Q3 2025, driven by the successful monetization of quality games from its subsidiary Supercell [1]. Advertising Growth - Advertising revenue is projected to grow by 19% year-on-year in Q3 2025, fueled by improvements in AI advertising efficiency, increased ad loads from video accounts, mini-programs, and search functionalities [1][2]. Financial Services - The company expects a combined revenue growth of over 20% year-on-year for lending and wealth management services in Q3 2025, alongside a recovery in commercial payment income [2]. - Overall, financial and enterprise services revenue is anticipated to grow by 11% year-on-year in Q3 2025, supported by increased cloud computing demand and optimization efforts [2]. AI Development - Recent advancements in AI models, such as the mixed Yuan image 3.0, indicate progress that can compete with leading closed-source models in the industry [2]. - Although AI investments have not yet reached the commercialization phase, the company maintains high-quality growth in other business areas, contributing to margin improvement [2]. Profitability Forecast - Adjusted operating profit is expected to increase by 18.5% year-on-year, while adjusted net profit is projected to rise by 12% in Q3 2025 [2]. Valuation and Target Price - The company maintains its revenue and profit forecasts for 2025/2026, with a rating of "outperform" and a target price of HKD 700, implying a 9.5% upside from the current stock price [2].

Group 1 - The gaming sector experienced a notable rise on September 5, with the gaming ETF (159869) increasing by over 1%, indicating a significant upward trend [1] - Key stocks in the gaming ETF that saw substantial gains include Baotong Technology, Yaoji Technology, 37 Interactive Entertainment, Zhejiang Shuzhi Culture, Light Media, and Dihon Network [1] - Huawei's recent product launch showcased the Mate XTs foldable phone and the largest Mate TV, both featuring large screens that enhance gaming experiences through improved visual quality and interactivity [1] Group 2 - HarmonyOS is becoming a new hub for game developers, with over 1,000 game companies joining the Harmony ecosystem and more than 9,200 games available [2] - Popular games such as "Delta Action," "Crossfire: Gun Battle King," "Dark Zone Breakthrough," "League of Legends Mobile," and "Yuanmeng Star" are set to debut on the Harmony ecosystem starting in September [2] - The gaming sector is undergoing transformations driven by AI, content, and commercialization models, with the gaming ETF (159869) tracking the performance of A-share listed companies in the animation and gaming industry [2]

Core Insights - The domestic shooting game market is experiencing significant growth from late 2024 to 2025, with Tencent's products like "Delta Action" achieving 20 million DAU within a year, and "Peace Elite" seeing over 30% year-on-year growth in Q2 2025 [1][11][12] - The emergence of the "search, fight, and retreat" gameplay has contributed to this boom, alongside the rapid iteration of "hero shooter" products and the IP development of battle royale games [4][10][19] Industry Trends - The shooting game genre has historically been popular due to its broad audience and rapid adoption of new technologies and gameplay innovations [3][19] - The "search, fight, and retreat" gameplay, which has matured over the past year, is a key factor in the current market prosperity, with many companies launching projects in this category [4][10] Gameplay Evolution - The "search, fight, and retreat" gameplay originated from the 2016 game "Escape from Tarkov," which, despite its complexity, laid the groundwork for this genre [5][7] - The success of "PUBG" in 2017 helped popularize elements of this gameplay, making it more accessible to a wider audience [9][10] Market Dynamics - Major companies like Tencent and NetEase are leading the charge in the "search, fight, and retreat" segment, with Tencent's "Delta Action" achieving significant milestones in DAU and revenue [11][12] - The high entry barriers in the shooting game market mean that only large and mid-sized companies can afford to invest in this genre, limiting competition [12][19] Future Directions - The FPS genre is expected to evolve, with potential shifts towards PvE experiences and narrative-driven gameplay, as the current "search, fight, and retreat" trend may reach its peak [20][22] - The industry is exploring the integration of "search, fight, and retreat" mechanics into various game types, indicating a broader influence on game design [17][19] Financial Insights - In the first half of 2025, shooting games accounted for 6% of the top 100 mobile games by revenue, but contributed 17.03% of total revenue, highlighting the significant financial impact of a few successful titles [27]

Core Insights - The "search, fight, and retreat" (搜打撤) genre has gained significant traction, with major companies like Sony, Supercell, and Tencent actively participating in this space [1][3] - Tencent is currently the leader in the domestic "search, fight, and retreat" market, with games like "Dark Zone Breakout" and "Delta Action" solidifying its position [3][6] - The gameplay mechanics of "search, fight, and retreat" present inherent contradictions, making it challenging to balance tactical execution with fast-paced action [5][6] Tencent's Dominance - Tencent's "Delta Action" achieved an average daily active user (DAU) of 20 million in July, ranking among the top five in the industry [3] - "Dark Zone Breakout" was launched in 2022, focusing on a realistic approach that creates a "high-risk, high-reward" psychological experience [7] - The company has expanded its offerings, including the recent launch of "Dark Zone Breakout: Infinite" for PC, which has maintained a top 10 position in internet café rankings [9] Market Dynamics - Despite Tencent's stronghold, other companies like NetEase are also entering the "search, fight, and retreat" arena with unique approaches, such as the "Desert Gold" mode in "Naraka: Bladepoint" [15][19] - New entrants like "No Master Star Abyss," developed by former Blizzard CEO Mike Morhaime, are exploring innovative gameplay mechanics that combine cooperative and competitive elements [17][20] - The genre is evolving, with various companies experimenting with different gameplay styles and mechanics, indicating a competitive landscape that is not solely dominated by Tencent [26][27] Future Outlook - The "search, fight, and retreat" genre is characterized by its appeal to players' sense of risk and reward, creating a gambling-like experience that is distinct from traditional competitive shooting games [27] - The ongoing development of diverse gameplay experiences suggests that the future of this genre will not be monopolized by a single product but will instead cater to a variety of player preferences [26][27]

Group 1 - The mobile game "Code: Football Restart" by Ruyi Jingshou is set to begin Android platform testing from September 10 to September 24, targeting sports enthusiasts and simulation game players [1] - The successful launch and market acceptance of "Code: Football Restart" could significantly enhance Ruyi Jingshou's game product line, attract more users, and increase market share, thereby driving revenue growth for the company [1] - The game business has become a crucial growth point for Ruyi Jingshou and its parent company, China Ruyi, indicating strong potential for future performance [1] Group 2 - The highly anticipated martial arts game "Shadow Blade Zero" by Lingyoufang revealed a new video at the Future Game Show, with the producer confirming that a release date will be announced within the year [2] - If "Shadow Blade Zero" successfully launches, it is expected to achieve considerable sales in the global gaming market, enhancing Lingyoufang's revenue and brand recognition [2] - A successful project will also improve the investment return rate for Lingyoufang's investors, boosting market confidence in their investment acumen and project management capabilities [2] Group 3 - Tencent's popular tactical shooting mobile game "Dark Zone Breakout" announced the development of a new "Zombie Mode," which has generated significant player interest [3] - The game has attracted a large player base, with global registered users reaching 180 million by April 2025, indicating its strong market presence [3] - The introduction of the new mode is expected to enhance user engagement and retention, potentially attracting new players and positively impacting Tencent's market performance [3]

Core Insights - Tencent's Q2 2025 earnings report highlighted the unexpected success of the game "Delta Action," which has rapidly climbed to the top of the industry in terms of daily active users (DAU) and revenue [1][4][10] Game Performance - "Delta Action" launched in September last year and has shown significant growth, entering the top five in industry DAU and top three in revenue [1][4] - The game achieved over 10 billion yuan in revenue in Q4 last year and currently boasts over 20 million daily active users, marking a 66% quarter-on-quarter increase [4][10] - It has become a rare dual-platform evergreen product, performing exceptionally well on both PC and mobile [4][10] Strategic Importance - Tencent's management has consistently highlighted "Delta Action" as a key contributor in every earnings report since Q3 last year, positioning it alongside major titles like "Honor of Kings" and "Peace Elite" [2][5] - The game aligns with Tencent's strategy for long-term service-oriented games (GAAS), marking it as the most successful self-developed evergreen product since "Peace Elite" in 2019 [5][20] Market Dynamics - "Delta Action" has reached a peak of nearly 200,000 concurrent users on the Steam platform and ranks among the top three in net bar popularity [6] - On mobile, it competes closely with "Peace Elite," ranking in the top three of both the App Store free and revenue charts [8] - The game has the highest average daily active accounts among new releases in the past three years [9] Revenue Structure - The strong performance of "Delta Action" has shifted Tencent's revenue structure towards self-developed products, directly enhancing the gross margin of Tencent's value-added services, which saw a year-on-year increase of 23% [10] Competitive Landscape - Tencent's management has addressed concerns regarding potential cannibalization among its flagship games, emphasizing that the shooting game genre in China remains underexploited compared to Western markets [15] - The company believes that the introduction of new gameplay modes can expand the user base rather than merely competing for existing users [15] - "Delta Action" and "Peace Elite" currently have low overlap in user demographics, reducing immediate competition [15][18] Future Considerations - Tencent aims for "Delta Action" to complement "Peace Elite," potentially attracting players interested in extraction gameplay [18] - The company holds the IP for "Delta Action," allowing for greater revenue control and operational flexibility compared to "Peace Elite," which is based on an IP controlled by a third party [20] - The competition between Tencent's internal studios could lead to significant shifts in its game development strategy, especially if "Delta Action" continues to outperform "Peace Elite" [20]