Core Insights - The Chinese gaming market's actual sales revenue for Q3 2025 reached 88.026 billion yuan, marking a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08% [1] - Among 23 selected A-share gaming companies, 56.52% reported revenue growth, while 73.91% achieved profitability in Q3 2025 [1] - Century Games, a subsidiary of Century Huatong, significantly contributed to its parent company's revenue growth, with Q3 revenue reaching 10.016 billion yuan, a year-on-year increase of 60.19% [1] Market Segmentation - The client game market generated 20.29 billion yuan in Q3 2025, with a quarter-on-quarter increase of 16.05% and a year-on-year increase of 19.88% [1] - The mobile game market achieved 64.389 billion yuan in revenue, reflecting a quarter-on-quarter growth of 4.39% but a year-on-year decline of 1% [1] Company Performance - Century Huatong reported a revenue of 27.223 billion yuan for the first three quarters of 2025, surpassing its total revenue for the previous year, with a net profit of 4.357 billion yuan, up 141.65% [1] - 13 out of 23 gaming companies reported positive revenue growth, while 3 companies turned losses into profits, including Perfect World, Icefire Network, and Xinghui Entertainment [1] - 37 Interactive Entertainment maintained its position as the second-largest A-share gaming company, with Q3 revenue of 3.975 billion yuan, a year-on-year decline of 3.23% [1] New Product Success - Gigabit's new games, including "Wen Jian Chang Sheng" and "Zhang Jian Chuan Shuo," have been successful, contributing to a revenue of 4.486 billion yuan for the first three quarters, a year-on-year increase of 59.17% [2] - Giant Network's new game "Supernatural Action Group" performed well, leading to a Q3 revenue of 1.768 billion yuan, a year-on-year increase of 51.84% [2] - Icefire Network successfully turned around its performance, achieving a net profit of 500 million yuan in the first three quarters after a strategic shift in its marketing approach [2]

AI Applications - The October AI application rankings show ChatGPT, Doubao, Quark, Baidu Cloud, and Gemini as the top five globally [1][2] - Doubao surpasses Quark to become the leading domestic application with a monthly MAU of 159 million, reflecting a 6.28% month-over-month growth [1][2] - Other notable monthly active users include Tencent Yuanbao at 73 million, Deepseek at 72 million, and ByteDance's Jimeng AI at 4.511 million, with a 5.16% month-over-month increase [1][2] - Significant events in AI include OpenAI's $38 billion computing partnership with Amazon, the release of the Kimi K2Thinking model, iFlytek's launch of the Xunfei Spark X1.5 and related AI products, and OpenAI's introduction of GPT-5-Codex-Mini [2] Gaming - The top three games on the iOS weekly sales chart as of November 6 are "Honkai: Star Rail," "Honor of Kings," and "Delta Force" [3] - The game "Supernatural Action Group" launched a new character and ranked between 15-25 during the week, while G-bits' "Staff Sword Legend" ranked around 40 [3] - A partnership between Shengqu Games and Mango TV aims to create a new ecosystem for mini-games, and Bilibili's single-player game "Escape from Duckkov" has sold over 3 million copies [3] Film and Television - The total box office for the week of November 1-7 reached 207 million yuan, with "Improv Murder" as the top film, earning 42.11 million yuan and accounting for 20.3% of the weekly box office [3] - Upcoming films include "Demon Slayer: Infinity Castle Chapter One" and "Now You See Me 3," with high anticipation levels indicated by 579,000 and 284,000 people wanting to watch, respectively [3] - "Zootopia 2" is scheduled for release on November 26, and "Avatar: Fire and Ash" on December 19, highlighting a rich supply of imported films [3]

Investment Rating - The report maintains a "Buy" rating for the media industry, indicating a positive outlook for the sector [6][34]. Core Insights - The media industry saw a slight increase of 0.16% in the week from November 1 to November 7, 2025, ranking 18th among various industries. Notable performers included China Film, Jishi Media, and Chinese Media, with Baidu Group-SW and NetEase-S showing strong weekly gains in the Hang Seng Technology Index [10][16]. - The report emphasizes the potential in AI applications and cultural exports, particularly focusing on sub-sectors such as gaming, IP, short dramas, and publishing [4][34]. Summary by Sections Market Performance - The media industry experienced a weekly increase of 0.16%, while the Shanghai Composite Index rose by 1.08% and the Shenzhen Component Index by 0.19%. The gaming sector saw a decline of 0.29%, while the film and television sector increased by 2.49% [10][12]. Key Industry Data - **AI Applications**: In October, the top five AI applications globally were ChatGPT, Doubao, Quark, Baidu Cloud, and Gemini. Doubao led domestic applications with a monthly active user (MAU) count of 159.41 million, reflecting a 6.28% month-over-month growth [20][21]. - **Gaming**: The iOS gaming sales chart for November 6, 2025, was topped by "Honkai: Star Rail," followed by "Honor of Kings" and "Delta Force." The report also noted the upcoming release of seven new games between November 13 and November 15 [23][25]. - **Film**: The total box office for the week was 207 million yuan, with "Improv Murder" leading at 42.11 million yuan, accounting for 20.3% of the weekly total. Upcoming films include "Demon Slayer: Infinity Castle Chapter" and "Now You See Me 3" [27][28][31]. Investment Recommendations - The report suggests focusing on themes such as AI applications and cultural exports, with specific attention to companies like Giant Network, Kaiying Network, and Perfect World among others [4][34].

Core Viewpoint - The report from Zheshang Securities highlights that JiBit's Q3 revenue reached 1.968 billion (YOY +129.19%) and net profit attributable to the parent company was 569 million (YOY +307.70%) driven by the strong performance of "The Legend of the Staff" and the potential of new SLG games [1] Financial Performance - JiBit's Q3 revenue was 1.968 billion, reflecting a year-over-year increase of 129.19% [1] - The net profit attributable to the parent company for Q3 was 569 million, showing a year-over-year growth of 307.70% [1] Game Performance - The success of "The Legend of the Staff" significantly contributed to the revenue and profit growth [1] - There is a focus on the potential of new SLG games, indicating a strategic interest in expanding this segment [1]

Industry Overview - The gaming industry continues to show a growth trend, with significant performance from leading companies. In Q3 2025, industry revenue reached 30.362 billion yuan, representing a year-on-year increase of 28.6% and a quarter-on-quarter increase of 9.48%. The industry's profit also saw a substantial year-on-year growth of 112%, reaching 5.777 billion yuan, with a profit margin of 19% [1][2]. Key Companies Performance - Leading companies such as ST Huatuo, Sanqi Interactive, Giant Network, Kaiying Network, and G-bits reported quarterly net profits exceeding 500 million yuan, all demonstrating growth rates above 35% [1][2]. - Kaiying Network achieved a net profit of 630 million yuan in Q3 2025, marking a record high for a single quarter and a year-on-year increase of 34.5%. The company's gross profit margin improved to 84.2%, indicating a higher proportion of high-margin business [3]. - Giant Network reported a revenue of 2.15 billion yuan in Q3 2025, a 101.5% increase from Q2 2025, driven by the performance of its key product "Supernatural Action Group" [3]. - G-bits recorded a net profit of 569 million yuan in a single quarter, a remarkable year-on-year increase of 307.7%. The game "Staff Sword Legend" generated a total revenue of 1.166 billion yuan in the first three quarters of 2025 [4]. - ST Huatuo's successful overseas product "Whiteout Survival" has shown stable performance in both domestic and international markets, while its new product "Kingshot" has validated the feasibility of the "casual + SLG" model [4]. Market Dynamics - The issuance of game licenses has stabilized, with a record number of domestic licenses issued in 2025, totaling 1,354, surpassing the entire year of 2024 [2]. - The actual sales revenue of the Chinese gaming market from January to September 2025 increased by 7.11% year-on-year, with a continuous quarter-on-quarter growth, driven by excellent product performance [2].

Core Viewpoint - The gaming industry shows positive policy support and strong performance from new products, leading to an overall optimistic outlook for the sector [1]. Industry Summary - In Q3 2025, the gaming industry's revenue reached 30.362 billion yuan, marking a year-on-year growth of 28.6% and a quarter-on-quarter increase of 9.48%. The industry's profit also saw a significant year-on-year increase of 112%, reaching 5.777 billion yuan, with a profit margin of 19% [1]. - The issuance of game licenses remains stable, with a record number of domestic licenses issued. In the first nine months of 2025, the actual sales revenue of the Chinese gaming market grew by 7.11% year-on-year, driven by strong product performance [1]. Company Performance - **Kying Network**: In Q3 2025, the net profit reached 630 million yuan, a new quarterly high with a year-on-year growth of 34.5%. The gross profit margin improved to 84.2%, indicating a higher contribution from high-margin products [2]. - **Giant Network**: The company's revenue for Q3 2025 was 2.15 billion yuan, a 101.5% increase from Q2 2025, driven by the success of the product "Supernatural Action Group" [2]. - **G-bits**: The net profit for the quarter was 569 million yuan, showing a remarkable year-on-year growth of 307.7%. The product "Staff Sword Legend" generated significant revenue, contributing to the company's strong performance [2]. - **ST Huatuo**: The successful overseas product "Whiteout Survival" performed well in both domestic and international markets, while the new product "Kingshot" validated the feasibility of the "casual + SLG" model [2].

Investment Rating - The report indicates a positive investment outlook for the gaming sector, highlighting its strong performance compared to other sub-industries within the media sector [3][4]. Core Insights - The A-share media sector reported an 8.2% year-on-year revenue growth and a 59.8% increase in net profit attributable to shareholders in Q3 2025, with significant differentiation among sub-industries [3][4]. - The gaming industry showed remarkable growth, with a 28.6% year-on-year revenue increase, marking six consecutive quarters of accelerating revenue growth and achieving a profit margin of 19.0%, the highest quarterly level since 2022 [3][4]. - The external environment for gaming continues to improve, with an increase in the average monthly number of domestic game approvals and relaxed third-party payment policies from platforms like Google and Apple, which are expected to enhance channel cost efficiency [3][6][10]. - The advertising sector, particularly focusing on Focus Media, has seen substantial growth in internet advertising spending, leading to improved profit margins and a return to historical highs in gross margins [3][4]. - The publishing sector has shown mixed results, with some state-owned publishing groups experiencing significant profit growth while others face challenges due to changes in educational material subscription methods [3][4]. Summary by Sections Gaming Sector - The gaming sector's revenue in Q3 2025 grew by 28.6% year-on-year, with a profit margin of 19.0%, the best performance since 2022 [3][4]. - Domestic PC game sales increased by 20% year-on-year, driven by titles like "Dream" and "Delta" [11]. - Key companies to watch include ST Huatuo, Giant Network, and Jiubite, which have shown significant growth [3][4][19]. Advertising Sector - Focus Media has optimized its cost structure, leading to a gross margin that has reached historical highs [3][4]. - Future observations will focus on the elasticity of internet advertising spending and the impact of new partnerships and acquisitions [3][4]. Publishing Sector - The performance of state-owned publishing groups varies, with some recovering from previous declines while others continue to face challenges [3][4]. - The overall trend indicates a need for adaptation to changing market conditions and consumer demands [3][4]. Long Video Sector - Mango TV is at a critical juncture, with expectations for operational improvements as policy support strengthens [3][4]. - The focus will be on innovative IP operations and product cycles in the coming years [3][4].

Investment Rating - The investment rating for the company is "Buy" (maintained) [3][6]. Core Insights - The company reported a strong Q3 performance with total revenue of 1.97 billion yuan, a year-on-year increase of 129%, and a net profit attributable to shareholders of 570 million yuan, up 308% year-on-year, exceeding market expectations [6]. - The new game "杖剑" (Zhang Jian) has shown better-than-expected sustainability in both domestic and overseas markets, contributing significantly to revenue growth [6]. - The company has raised its earnings forecast based on the strong performance of new titles, projecting revenues of 6.27 billion yuan, 7.16 billion yuan, and 7.78 billion yuan for 2025, 2026, and 2027 respectively [6]. Financial Data and Profit Forecast - Total revenue (million yuan): - 2024: 3,696 - 2025E: 6,265 - 2026E: 7,156 - 2027E: 7,788 - Year-on-year growth rates (%): - 2025E: 69.5 - 2026E: 14.2 - 2027E: 8.8 - Net profit attributable to shareholders (million yuan): - 2025E: 1,779 - 2026E: 2,008 - 2027E: 2,310 - Gross margin (%): - 2025E: 93.4 - 2026E: 88.2 - 2027E: 89.9 - Return on equity (ROE %): - 2025E: 29.8 - 2026E: 30.2 - 2027E: 31.0 [2][6][8]. Market Data - Closing price (yuan): 452.01 - Market capitalization (million yuan): 32,563 - Dividend yield (%): 2.68 - Price-to-earnings ratio (PE): - 2026E: 16 - 2027E: 14 [3][6].

Investment Rating - The report maintains a "Recommended" investment rating for the media industry [6] Core Insights - The media industry experienced a slight decline of 0.06% in the week from October 25 to October 31, 2025, ranking 21st among industries. Notable performers included BlueFocus, Yue Media, and Fushi Holdings, while the best performers among the Hang Seng Technology constituents were Yuedu Group and Bilibili [1][11][18] - The report highlights the strong performance of AI applications and cultural exports, with a focus on sub-sectors such as gaming, IP, short dramas, and publishing [4][34] Summary by Sections Market Performance - The media industry saw a weekly decline of 0.06%, with the Shanghai Composite Index rising by 0.11% and the Shenzhen Component Index increasing by 0.67% during the same period [11] - The gaming sector within the media industry dropped by 4.01%, while advertising and marketing saw a rise of 4.85% [11][18] Key Industry Data - AI Applications: Estimated iOS downloads for Deepseek, Doubao, Quark, and Tencent Yuanbao were 459,500, 2,100,300, 808,600, and 894,900 respectively, with Quark showing a significant week-on-week growth of 16.36% [22] - Gaming: The iOS game sales chart for October 30 featured "Honor of Kings," "Love and Deep Space," and "Gold Shovel Battle" as the top three titles. The game "Stick Sword Legend" improved its ranking due to a collaboration event [24][25] - Film: The total box office for the week was 216 million yuan, with "Wandering Life" leading at 42.37 million yuan, accounting for 19.6% of the weekly total [28][29] Industry Events and Announcements - MiniMax launched the video model Hailuo 2.3, enhancing dynamic expressiveness and image stability, while OpenAI completed its capital restructuring [31][32] - The game "Escape from Duckkov" surpassed 2 million sales within two weeks of its release, indicating strong market potential [31] - The new application "Red Fruit Free Comic Drama" was launched, focusing on short, AI-produced content, which is gaining traction in the market [33] Investment Recommendations - The report recommends focusing on themes such as AI applications and cultural exports, with specific attention to gaming, IP, short dramas, and publishing sectors. Key companies to watch include Giant Network, Kying Network, and Perfect World [4][34]

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 602.00 CNY, while the current price is 472.98 CNY [6][19]. Core Insights - The company's products such as "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" have shown outstanding performance and sustainability, expected to continue contributing to revenue in 2026. The expansion of "Zhang Jian" and "Wen Jian" in overseas markets, along with the launch of "Jiu Mu Zhi Ye," will further drive growth [2][11]. - The third quarter results are at the upper end of forecasts, with a cash dividend of 6 CNY per share announced. For the first three quarters of 2025, the net profit attributable to the parent company reached 1.214 billion CNY, a year-on-year increase of 84.66%, with a single-quarter net profit of 569 million CNY, up 307.7% [11][12]. Financial Summary - Total revenue is projected to increase from 4,185 million CNY in 2023 to 9,257 million CNY in 2027, reflecting a compound annual growth rate (CAGR) of approximately 29.5% [4][12]. - Net profit attributable to the parent company is expected to rise from 1,125 million CNY in 2023 to 2,476 million CNY in 2027, indicating a CAGR of about 30.5% [4][12]. - Earnings per share (EPS) are forecasted to grow from 15.62 CNY in 2023 to 34.36 CNY in 2027 [4][12]. Product Performance - "Zhang Jian Chuan Shuo" generated a total revenue of 1.166 billion CNY in the mainland market for the first three quarters, maintaining a position within the top 40 of the iOS game sales chart. "Dao You Lai Wa Bao," launched in May, has contributed 316 million CNY by the end of September [11][12]. - The overseas revenue for the first nine months reached 588 million CNY, a year-on-year increase of 59.46%, with "Zhang Jian Chuan Shuo (Overseas Version)" contributing 478 million CNY since its launch on July 15, 2025 [11][12]. Future Expectations - Anticipation for the launch of "Wen Jian Chang Sheng" and "Zhang Jian Chuan Shuo" in overseas markets, as well as the strategic reserve of the SLG mobile game "Jiu Mu Zhi Ye," which is expected to contribute to 2026's performance [11][12].