Investment Rating - The industry rating is "Recommended" [4] Core Insights & Investment Recommendations - Unity and Epic Games announced a strategic partnership to create an open and interoperable ecosystem for game engines, allowing developers to publish Unity games on the Fortnite platform with over 500 million registered accounts, enhancing user reach and commercialization efficiency [2][21] - NVIDIA's quarterly performance exceeded expectations, with data center revenue growing by 289% year-on-year, reflecting strong demand for AI infrastructure [3][22] - The report suggests focusing on investment opportunities in leading internet companies in Hong Kong, the gaming industry, and the film and cultural tourism sectors, driven by consumption policies and technological empowerment [3][22] Sub-industry Data Film Industry - The top three films by box office this week are "Demon Slayer: Infinity Castle" with 134.67 million yuan (42.9% market share), "Wild Era" with 75.67 million yuan (24.1%), and "Now You See Me 3" with 55.44 million yuan (17.7%) [23][24] Gaming Industry - The top three iOS games by revenue are "Teamfight Tactics," "Dungeon & Fighter: Origin," and "Honor of Kings," while the top three Android games are "Heart Town," "Sword and Magic Legend," and "My Leisure Time" [25] TV Series Industry - The top three TV series by broadcasting index are "Tang Dynasty Ghost Stories: Chang'an," "Four Happiness," and "Phoenix Platform," with indices of 85.5, 82.4, and 81.8 respectively [26][27] Variety Shows & Animation - The top variety show is "Now Departing Season 3" with a broadcasting index of 82.4, followed by "Wonderful Night Season 2" and "Flowers and Youth Together" [28][29] - The top three animated shows by viewership index are "Xian Ni" with 212.8, "Happy Hammer" with 191.6, and "Swallowing the Starry Sky" with 187.2 [30]

Core Insights - Huawei officially launched the new HarmonyOS 6 on October 22, targeting over 90 device models for large-scale public testing, marking a new phase of "deep co-construction and joint innovation" with ecosystem partners [1] Group 1: New Features and Applications - HarmonyOS 6 has seen over 23 million devices running HarmonyOS 5, with many ecosystem partners launching new applications and features, enhancing the overall user experience [3] - Tencent has introduced new features in multiple applications, including a live streaming function in Tencent News and a "real-time traffic light countdown" in Tencent Maps [3] - JD.com launched a high-precision AR feature allowing users to virtually place large items in their real home environment, enhancing the shopping experience [3] - The "Weather Dynamic Effect" feature in the airline travel app enriches user experience by providing real-time weather updates [3] Group 2: System Innovations - HarmonyOS 6 introduces innovations in connectivity, security, fluidity, refinement, and intelligence, enabling familiar applications to evolve [4] - The "Tap to Share" feature has expanded, with over 60 applications now supporting it, allowing seamless content sharing between devices [4] - The upgraded security architecture, Star Shield, provides intelligent proactive protection for user privacy, with applications integrating AI privacy features [5] Group 3: Gaming and Performance Enhancements - Over 15 popular games have improved performance on HarmonyOS 6, with game launch speeds increased by five times for titles like "Crossfire Mobile" [6] - The system optimizes resource allocation, allowing for extended gaming sessions without performance drops [6] Group 4: AI Integration - HarmonyOS 6 is advancing towards AI integration, with over 80 smart applications launched, enhancing user interaction across various sectors [8] - Notable smart applications include the "Mai Bao" intelligent assistant for event recommendations and the "JD Shopping Assistant" for personalized shopping experiences [8] Group 5: Continuous Development and Ecosystem Growth - Many applications have completed full development and are continuously updated, ensuring a robust ecosystem [11] - Major applications like WeChat and Alipay have rolled out significant updates, enhancing user experience across various functionalities [11] - The collaboration with ecosystem partners aims to evolve the HarmonyOS ecosystem, focusing on user feedback to drive improvements [12]

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net selling from northbound capital, totaling 54.43 billion HKD, with the Shanghai-Hong Kong Stock Connect seeing a net sell of 63.1 billion HKD, while the Shenzhen-Hong Kong Stock Connect recorded a net buy of 8.66 billion HKD [1]. Group 1: Stock Performance - Alibaba-W (09988) had a net buy of 4.86 billion HKD, with total transactions amounting to 71.32 billion HKD [2]. - The largest net sell was observed in the Tracker Fund of Hong Kong (02800), with a net sell of 62.71 billion HKD [2]. - Semiconductor stocks showed divergence, with Hua Hong Semiconductor (01347) receiving a net buy of 4.45 billion HKD, while SMIC (00981) faced a net sell of 6.42 billion HKD [5]. Group 2: Company-Specific Developments - Alibaba's net buy was supported by the upcoming Double 11 shopping festival, with significant promotional activities planned [4]. - High expectations for Alibaba's future capital expenditures were raised by Goldman Sachs, predicting a total of 460 billion CNY over the next three years [4]. - Xiaomi Group-W (01810) received a net buy of 2.96 billion HKD, with plans for a major promotional event and the launch of a new SUV model [5]. Group 3: Market Trends and Investor Sentiment - Tencent (00700) saw a net buy of 2.5 billion HKD, with analysts expecting strong performance in its upcoming earnings report [6]. - The overall sentiment in the Hong Kong market is affected by rising tensions in US-China trade relations, leading to a decline in investor risk appetite [8]. - The market is anticipated to experience fluctuations, with current valuations at historically high levels [8].

Core Insights - Tencent has unveiled a new shooting game titled "Graywalker," developed by its Aurora Studios, which is known for creating popular titles in various gaming genres [2] - The game features a PVEVP "hunt and loot" theme, utilizing the UE5 engine and incorporating horror elements inspired by Cthulhu [2] - The shooting game sector is experiencing growth, with Tencent maintaining a dominant position through its successful titles [4][8] Game Development and Features - "Graywalker" allows players to assume different roles while navigating a mysterious space called "Gray Realm," where they collect weapons and compete against monsters and other players for rare treasures [2] - Aurora Studios has previously developed the competitive shooting game "Rules of Survival," which was discontinued in December 2023 [2] Market Analysis - The PVEVP gameplay combines elements of PvP and looting, creating a unique gaming experience that emphasizes unexpected encounters and strategic thinking [4] - The first-person shooter genre is primarily categorized into traditional battlefield modes, battle royale, and the trending looting modes, with some overlap among these categories [4] - Despite the popularity of shooting games, there is a noted "ceiling" in user engagement, as the player base for shooting games is relatively small compared to the overall gaming community [4] Revenue Performance - Tencent's titles, including "Honor of Kings," "Delta Action," "Peacekeeper Elite," and "Gold Shovel Battle," dominated the Chinese App Store's revenue rankings in September 2023 [4][8] - "Delta Action" saw a 78% month-on-month revenue increase due to its new season, while "Valorant: Source Action" experienced a nearly 120% revenue surge since its launch [8] Future Prospects - Tencent is exploring multiple shooting game projects, including new entries in the "Crossfire" series and other titles, indicating a strategy of diversification within the shooting game genre [8] - The company is adopting a "racehorse" model, continuously testing various shooting game types to find the next potential blockbuster following the success of battle royale games [8]

Group 1: Market Activity - Southbound funds net bought Hong Kong stocks worth 8.603 billion HKD on October 14, with notable purchases in Southern Hang Seng Technology (1.147 billion HKD), Xiaomi Group-W (0.923 billion HKD), Tencent Holdings (0.662 billion HKD), and others [1] - Continuous net buying of Xiaomi for 7 days, totaling 5.63234 billion HKD [4] - Continuous reduction in holdings of SMIC and Alibaba for 4 days, amounting to 6.58659 billion HKD and 4.97935 billion HKD respectively [5] Group 2: Company Performance and Predictions - Tencent Holdings is expected to report stable performance for Q3 on November 13, with projected revenue and profit growth of 13.5%, 20.9%, and 16.9% year-on-year, driven by strong gaming performance and AI-driven advertising technology [5] - Crystal Technology is recognized as a pioneer in the frontier technology sector, with projected revenues of 0.781 billion, 1.093 billion, and 1.496 billion CNY from 2025 to 2027, indicating significant growth potential [6] - Alibaba's capital expenditure forecast for FY2026-28 has been significantly raised to 460 billion CNY, with expectations of AI cloud computing breakthroughs and international expansion contributing to stock price growth [7] Group 3: Sector Insights - The Chinese government's export controls on rare earth elements are seen as beneficial for local semiconductor companies, including SMIC, as they push for domestic alternatives [7] - The impact of tariffs on Chinese innovative pharmaceutical companies is expected to be limited, with a focus on licensing and overseas company setups to navigate international markets [8]

Core Viewpoint - Citigroup's report indicates that Tencent is expected to deliver robust performance in its third-quarter results on November 13, with total revenue and profit likely to meet or exceed expectations [1] Group 1: Financial Performance Expectations - The forecast for Tencent's third-quarter revenue, gross profit, and operating profit is projected to grow year-on-year by 13.5%, 20.9%, and 16.9% respectively [1] - The anticipated growth in Tencent's marketing services revenue is expected to maintain the momentum seen in the first half of the year, with a year-on-year increase of approximately 20% driven by advancements in AI-driven advertising technology, continued growth in video accounts, and developments in WeChat search and mini-stores [1] Group 2: Business Segment Insights - The gaming segment shows potential for growth, primarily benefiting from the strong momentum of titles such as "Delta Action" and "Peacekeeper Elite," the recovery of "Honor of Kings," and the steady rebound of "Dungeon & Fighter" and "Teamfight Tactics" [1] Group 3: Investment Rating - Citigroup maintains a "Buy" rating for Tencent, with a target price set at HKD 735 [1]

Core Viewpoint - Tencent's game "Delta Operation" is facing its largest public relations crisis since its launch, primarily due to a controversial gameplay update that has sparked significant backlash from players [1][2][4]. Summary by Sections Game Performance and Popularity - "Delta Operation" was one of Tencent's most successful games in 2023, achieving a daily active user (DAU) count of over 3 million within a year of its launch [3][39]. - The game was celebrated during its one-year anniversary event, which was attended by many players and received positive feedback [3]. Controversy and Player Backlash - The controversy began with a gameplay update on October 5, which altered the "shared prison" mechanic, leading to widespread player dissatisfaction and calls for a boycott on October 10 [2][11]. - Players expressed their anger through social media, with over 550,000 critical comments following the update announcement [11][12]. Gameplay Mechanics - The core gameplay of "Delta Operation" revolves around the "search, fight, and retreat" mechanic, which allows players to accumulate resources across matches, contrasting with traditional battle royale games [5][6]. - The "shared prison" strategy emerged as a player-driven method to safely gather resources, which was disrupted by the recent update [10][29]. Official Response and Economic Implications - Tencent's official apology on October 8 failed to quell the backlash, as players felt the update undermined the cooperative gameplay that had been promoted [2][30]. - The official reasoning for the update cited concerns over in-game inflation caused by the "shared prison" mechanic, which many players viewed as a deflection from deeper issues within the game's economic design [30][31]. Competitive Landscape - The crisis has opened opportunities for competing games, such as "Dark Zone: Infinite," which have capitalized on the situation by promoting their own gameplay mechanics that emphasize player cooperation [38]. - The ongoing situation highlights the importance of player trust in the long-term success of games, especially for titles with high DAU like "Delta Operation" [41][43].

Core Insights - Tencent remains the top mobile game publisher in China, driven by significant revenue growth from its games, particularly "Delta Force," which saw a 76% month-over-month increase in September [1][2]. Group 1: Revenue Rankings - "Delta Force" achieved a remarkable rise in the Chinese App Store, reaching the second position in September 2025, following the launch of a new season and a collaboration with "Arknights" [2]. - Tencent's four games, including "Honor of Kings," "Delta Force," "Peacekeeper Elite," and "Teamfight Tactics," dominated the top four spots in the latest revenue rankings [2]. Group 2: Performance Trends - "Delta Force" has shown a clear upward trend in sales, consistently ranking in the top five of the iOS sales charts during its first five seasons [3]. - Tencent's games maintain a strong presence in the top 10 of the iOS sales charts, with 7-8 titles regularly featured, including "Delta Force," "Honor of Kings," and "Peacekeeper Elite," among others [3].

Global Mobile Game Market Overview - In August 2025, global player spending on mobile games reached approximately $7.15 billion, reflecting a month-over-month increase of 1% [1][4] - The United States led the market with $2.3 billion, accounting for 32% of total spending, followed by China's iOS market at 15.3% and Japan at 12.8% [1][4] Top Revenue-Generating Games - FUNFLY's "Last War: Survival Game" maintained its position as the top-grossing mobile game globally, driven by seasonal events and promotional activities [3] - "Honor of Kings" rose to the second position, benefiting from high-profile collaborations and the release of premium skins, including a partnership with a popular Chinese fantasy novel [3][5] - "Pokémon GO" topped the revenue growth chart, with significant income boosts from major events like the "GO Fest 2025" and collaborations with the "Pokémon World Championships" [4] Tencent's Performance - Tencent had four titles in the revenue growth rankings for August, including "Honor of Kings" and "Peacekeeper Elite," both of which saw revenue increases due to major updates and collaborations [5] - "League of Legends: Wild Rift" also experienced revenue growth from significant updates, maintaining user engagement and spending [5] Mobile Game Download Trends - "ROBLOX" continued to lead the global download chart in August, supported by various content updates and collaborations [6][8] - "Free Fire" climbed to the second position in downloads, aided by a collaboration with the popular anime "Naruto Shippuden" [8] - The total global mobile game downloads remained stable at approximately 4.31 billion, with India leading at 7.02 million downloads [9] Emerging Games and Market Dynamics - New titles like "Steal n Catch the Brainrot" and "Kpop Piano Beats" rapidly gained popularity, reflecting the strong cultural appeal and viral potential in the mobile gaming space [9][10] - "Valorant: Source Action" launched exclusively in China, achieving significant download growth, indicating a strong demand for innovative FPS mobile experiences [10]

Group 1: National Standards and Manufacturing - The National Standards Committee plans to revise and formulate over 4,000 national standards focusing on key areas such as artificial intelligence, the Internet of Things, and new materials to support the transformation of the manufacturing industry [1] - In 2023, the National Standards Committee has already released over 600 national standards related to the transformation and upgrading of the manufacturing industry, promoting high-end, green, and intelligent development [1] Group 2: AI Developments - DeepSeek aims to release its AI agent by the end of this year [2] - OpenAI is collaborating with Broadcom to mass-produce its self-developed AI chips, with shipments expected next year [2] - Apple plans to develop an AI-based web search tool for Siri to compete with OpenAI, with a launch expected next year [3] Group 3: Robotics and Automation - Zhiyuan Robotics has adopted a "performance" model, earning approximately 15,000 yuan per day per robot since June, with over a hundred contracts from various sectors [4] - UBTECH has secured a record contract worth 250 million yuan for humanoid robots, marking the largest contract in the global humanoid robot sector to date [5] Group 4: Consumer Electronics - Huawei launched the Mate XTs foldable smartphone, starting at 17,999 yuan, featuring the Kirin 9020 chip and HarmonyOS 5.0, with a 36% performance improvement [6] - Huawei's smartwatch shipments have surpassed Apple's for the first time, driven by a recovery in consumer demand, particularly in the Chinese market [7][8] Group 5: Supply Chain and Labor Market - Foxconn and other Apple supply chain companies are aggressively hiring due to the upcoming iPhone 17 release, with hourly wages significantly higher than non-Apple factories [9]