Core Insights - The National Press and Publication Administration announced the approval of 178 domestic game licenses and 6 imported game licenses on November 26, indicating a stable monthly issuance of licenses, which is expected to boost market confidence in the gaming industry [1][3]. Industry Overview - As of November, a total of 1,532 domestic game licenses and 92 imported game licenses have been issued this year, showing a significant increase compared to the same period in 2024 [1][3]. - The distribution of the 178 domestic licenses includes 167 mobile games, 7 games for both mobile and client platforms, 3 client-only games, and 1 game available on mobile, client, and web platforms [1]. Company Highlights - Key games approved in this round include titles from major companies such as: - Ksyun Network's "Ice and Snow King" - Iceberg Network's "Little Guardian" - Perfect World's "Dream New Zhu Xian: Light Enjoy" - Other notable titles from various developers [2]. - Tencent continues to maintain a strong portfolio with 14 evergreen games, while Giant Network's "Supernatural Action Group" has exceeded expectations [4]. - Companies like 37 Interactive Entertainment and Perfect World are also expected to contribute to profit growth with their new game launches and existing titles [4].

Summary of the Conference Call on the Gaming Industry Industry Overview - The gaming industry is experiencing a golden era characterized by significant revenue growth and improved profitability. In Q3 2025, the total revenue of the gaming concept companies reached 30.362 billion yuan, a year-on-year increase of 27%-29%, with net profit around 6 billion yuan, up 19% year-on-year, marking a three-year high in profit margins [1][2][9]. Key Players and Performance - **Tencent**: In Q3 2025, Tencent's total revenue from online games was 63.6 billion yuan, with international market revenue growing 43% year-on-year, significantly outpacing the domestic market's 15% growth [4]. - **NetEase**: Reported revenue of 28.4 billion yuan in Q3 2025, an 8.2% increase year-on-year, driven by the success of the game "Yanyun Sixteen Sounds" and AI technology applications [4]. - **A-Share Companies**: Companies like Century Huatong and Cupid saw substantial profit increases, with Century Huatong's net profit soaring 141.65% year-on-year [5]. Market Dynamics - The gaming market in China showed a total sales revenue of 88.026 billion yuan in Q3 2025, a quarter-on-quarter increase of 6.96%, ending a five-quarter decline [8][9]. - The gaming sector's investment logic is centered around policy support, technological advancements, and globalization, with a focus on AI empowerment and high-potential overseas business [3][15]. AI Technology Impact - AI technology is widely applied in game development, operations, and user experience, with over 80% application rate among leading companies, significantly reducing costs and enhancing efficiency [7][11]. - The integration of AI is expected to further strengthen the competitive edge of large enterprises and attract more investment into the industry [7]. Future Outlook - The gaming industry is anticipated to continue its upward trajectory, with new game supply peaks expected to drive user growth and revenue increases. The global strategy for Chinese games is entering a harvest phase, with significant potential in both traditional and emerging markets [16][20]. - Despite the optimistic outlook, potential risks include intensified competition, regulatory changes, and geopolitical uncertainties that could affect company performance [17]. Investment Considerations - The current valuation of the gaming sector is seen as attractive, with the average price-to-earnings ratio around 28 times, below the historical average of 35 times. This suggests significant upside potential as the industry returns to a growth cycle [18]. - For new investors, tracking the CSI Animation and Gaming Index through ETFs is recommended, providing exposure to leading companies in the sector while mitigating individual stock risks [21].

Group 1 - The report highlights a significant recovery in the media sector, with the CITIC Media Index rising by 26.42% in 2025, outperforming the CSI 300 by 13.24 percentage points [11][7] - The media sector's revenue for the first three quarters of 2025 reached 416.07 billion yuan, a year-on-year increase of 4.98%, while net profit attributable to shareholders rose by 40.23% [18][7] - Public funds have significantly increased their holdings in the media sector, with a total market value of 59.39 billion yuan, marking a 63.43% increase from the previous quarter [36][7] Group 2 - The gaming sector is experiencing high demand and supply, with a market size of 256.03 billion yuan in the first three quarters of 2025, reflecting a year-on-year increase of 7.11% [41][7] - The film industry has seen fluctuating box office performance, with total box office revenue of 44.56 billion yuan from January to October 2025, a year-on-year increase of 16.07% [65][7] - The advertising sector has shown moderate growth, with outdoor advertising spending reaching 191.66 billion yuan, a year-on-year increase of 6% [78][7] Group 3 - The policy environment for the media industry has improved significantly, with a more stable regulatory framework and supportive policies emerging [7][3] - AI applications are accelerating in the media sector, with advancements in AI models enhancing their capabilities and driving growth in gaming, film, advertising, and publishing [7][3] - The publishing sector has faced challenges, with total revenue declining by 7.10% to 97.60 billion yuan in the first three quarters of 2025, although net profit increased by 15.43% [87][7]

Group 1 - The media sector has shown a significant upward trend in performance, with a year-to-date increase of 24.36% in the Shenwan Media Index, outperforming the CSI 300 by 10.35% [3][76] - In the first three quarters of 2025, the media sector achieved a total revenue of 387.6 billion yuan and a net profit of 32.1 billion yuan, representing year-on-year growth of 5.41% and 37.18% respectively [3][16] - The current TTM-PE for the Shenwan Media Index is 44x, which is at the 80th percentile of the past five years, indicating a recovery in valuation [3][76] Group 2 - The gaming sector has benefited from a strong product cycle, with Q3 2025 revenues reaching 30.4 billion yuan and net profits of 4.6 billion yuan, marking year-on-year increases of 28.60% and 111.65% respectively [4][29] - The popularity of collectible toys and IP-based products remains high, with the domestic market for IP economy projected to grow from 94.1 billion yuan in 2022 to 240.6 billion yuan by 2025, maintaining a growth rate of over 10% [112][118] Group 3 - The shift in policy direction is expected to positively impact the entertainment content industry, with ongoing improvements in content supply likely to stimulate demand recovery [5][127] - AI applications are rapidly penetrating the entertainment content industry, enhancing efficiency and return on investment in content production, thus creating new opportunities [5][127] Group 4 - Investment recommendations focus on sectors with strong growth potential, particularly in gaming and AI-driven content creation, with specific companies highlighted for their promising performance [6][111] - The report emphasizes the importance of monitoring product cycles and performance trends in the gaming sector, recommending companies such as Giant Network and 37 Interactive Entertainment [6][111]

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]

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].

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Insights - The company reported Q3 2025 revenue of 1.97 billion yuan, a year-on-year increase of 129.2%, and a net profit attributable to shareholders of 570 million yuan, up 307.7% year-on-year, closely aligning with the upper limit of the forecast range [2][4]. - The new game "Staff Sword Legend" performed steadily, and the overseas game market showed significant contributions [5][10]. - The company is focusing on the subsequent revenue trends of core products and the testing and launch schedule of new products [10]. Summary by Sections Financial Performance - In Q3 2025, the company achieved revenue of 1.97 billion yuan, with a net profit of 570 million yuan and a non-recurring net profit of 560 million yuan, reflecting year-on-year increases of 129.2%, 307.7%, and 273.7% respectively [2][4]. - The new game "Staff Sword Legend" generated a revenue of 742 million yuan in Q3, while its overseas version contributed 478 million yuan [10]. Game Performance - The new game "Staff Sword Legend" continues to contribute incremental revenue, with its overseas version performing well, leading to a significant increase in overseas revenue to 387 million yuan in Q3 [10]. - The self-developed mini-program game "Dao You Lai Wa Bao" has contributed over 300 million yuan in revenue since its launch in May [10]. Cost and Expenses - Due to the contribution from multiple new games, the company’s unamortized recharge and item balance as of September 30, 2025, increased significantly to 635 million yuan from 567 million yuan [10]. - The sales expenses increased due to the launch of new games, with a total of 610 million yuan in Q3, reflecting a year-on-year increase of 360 million yuan [10]. Shareholder Returns - The company has actively promoted shareholder returns, with a proposed cash dividend of 4.31 billion yuan, accounting for approximately 75.6% of net profit [10]. Profit Forecast - The company expects net profits attributable to shareholders to be 1.69 billion yuan and 1.90 billion yuan for 2025 and 2026, respectively, corresponding to PE ratios of 20.6 and 18.3 times [10].

Investment Rating - The report maintains an "Outperform" rating for the media industry [1] Core Viewpoints - The media industry is experiencing a significant recovery in revenue and net profit, driven by a low base effect from the previous year and a notable decrease in expenses [3][4] - The gaming sector is highlighted as a key growth area, with new game releases driving substantial profit increases, while the film and television sectors are expected to benefit from policy changes and AI applications [5][6] Summary by Sections 1. Performance Review - In the first three quarters of 2025, the A-share media sector achieved a total revenue of 387.6 billion yuan and a net profit of 32.1 billion yuan, representing year-on-year growth of 5.41% and 37.18% respectively [3][17] - The media sector's gross margin increased by 1.44 percentage points to 32.81%, and the net margin improved by 1.97 percentage points to 8.44% [3][18] 2. Q3 Performance Acceleration - In Q3 2025, the media sector reported revenues of 132.7 billion yuan and a net profit of 10.3 billion yuan, with year-on-year growth of 8.11% and 59.33% respectively [4][48] - The gaming sector's net profit surged by 111.65%, while the publishing sector also saw a positive turnaround due to tax incentives [4][60] 3. Subsector Performance - The gaming industry generated a net profit of 13.8 billion yuan, marking an 88.61% increase and becoming the largest profit contributor at 43% of the total [3][34] - The film and television sector is expected to recover due to favorable policies and AI applications, with a focus on content supply improvements [5][6] 4. Investment Recommendations - The report recommends focusing on the gaming sector and the film industry, particularly companies with strong new product cycles and those positioned to benefit from policy shifts and AI applications [6][90] - Specific companies highlighted for investment include Giant Network, Bilibili, and Mango TV, among others [6][90]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 514.14 CNY, reflecting a P/E ratio of 22 times for 2025 [3][5]. Core Insights - The new game "Zhang Jian Chuan Shuo" is expected to maintain high revenue in Q4, while the upcoming SLG game "Jiu Mu Zhi Ye" is anticipated to contribute additional revenue in 2026. The projected net profits for 2025, 2026, and 2027 are 1.684 billion, 1.805 billion, and 2.147 billion CNY respectively, reflecting significant growth due to the stability of "Zhang Jian Chuan Shuo" and the better-than-expected performance of "Dao You Lai Wa Bao" [3][9]. Financial Performance Summary - **Revenue**: The company reported revenue of 4,185 million CNY in 2023, with a projected increase to 6,297 million CNY in 2025, representing a growth rate of 70.4% [4][10]. - **Net Profit**: The net profit attributable to the parent company is expected to rise from 1,125 million CNY in 2023 to 1,684 million CNY in 2025, marking a growth of 78.2% [4][10]. - **Gross Margin**: The gross margin is projected to improve from 88.5% in 2023 to 92.8% in 2025 [4][10]. - **Earnings Per Share (EPS)**: The EPS is expected to increase from 15.62 CNY in 2023 to 23.37 CNY in 2025 [4][10]. Game Performance Insights - "Zhang Jian Chuan Shuo" has shown stable performance since its launch, consistently ranking in the top 15 of sales charts. Despite a slight decline in monthly revenue, it is expected to contribute significantly in Q4 [9]. - The derivative game "Dao You Lai Wa Bao" has successfully recalled lost users from "Wen Dao," contributing an additional 316 million CNY in revenue since its launch [9]. - The upcoming SLG game "Jiu Mu Zhi Ye" is positioned in a competitive market but has unique features that may allow it to capture market share if successful [9].

Core Insights - Jibite's net profit surged and the company announced significant dividends, with its stock price doubling this year [2][3] Financial Performance - For the first three quarters, Jibite reported revenue of 4.486 billion yuan, a year-on-year increase of 59.17%, and a net profit of 1.214 billion yuan, up 84.66% [3][4] - In Q3 alone, revenue reached 1.968 billion yuan, marking a 129% year-on-year growth and a 42.37% quarter-on-quarter increase [4] - The company plans to distribute a cash dividend of 60 yuan per 10 shares, totaling 431 million yuan, which represents 75.61% of its Q3 net profit [5] Game Performance - New game launches contributed significantly to revenue, with titles like "Zhang Jian Chuan Shuo" and "Dao You Lai Wa Bao" generating a combined revenue of 2.673 billion yuan [3][5] - The overseas game business also saw a revenue increase of 59.46%, totaling 588 million yuan [3] Marketing and Sales Strategy - Jibite's sales expenses rose to 1.444 billion yuan, up from 786 million yuan in the previous year, primarily due to increased user acquisition costs [7] - The company emphasizes that while user acquisition is important, it cannot solely rely on it for product success [7] Market Position and Challenges - Despite recent successes, there are concerns about the sustainability of new game performance, as the company has faced challenges with some titles underperforming [6][9] - Analysts note that relying on user acquisition strategies may become increasingly difficult due to rising costs and competition in the gaming market [9]