Core Viewpoint - Shunwang Technology reported a significant increase in net profit for Q3 2025, yet its stock price fell sharply, raising concerns among investors about the company's market performance despite positive financial results [2][3]. Financial Performance - For Q3 2025, Shunwang Technology's operating revenue was 498 million yuan, a year-on-year decrease of 15.4% [3][4]. - The net profit attributable to shareholders was 162 million yuan, reflecting a year-on-year increase of 39% [3][4]. - The net profit after deducting non-recurring gains and losses was 151 million yuan, up 28.3% year-on-year [3][4]. Market Reaction - Following the release of the Q3 report, the company's stock price dropped by 5.8% and 7.6% on consecutive trading days, despite the overall market rising above 4000 points [2]. - Investors expressed concerns about the stock price decline during an investor relations event, questioning the company's future performance and market management strategies [6]. Business Operations - The company stated that its main business is developing well, with ongoing projects in the esports and entertainment sectors [7]. - The decline in revenue was attributed to the optimization of the business structure, leading to a reduction in lower-margin operations [8]. Cloud Business Development - Shunwang Technology has completed the foundational phase of its cloud business and is now focusing on accelerating the construction of edge computing facilities and cloud integration for esports venues [11]. - The company has established over 300 edge data centers and 50,000 operational esports-grade computing units [11]. Future Growth Areas - The company is targeting three core scenarios for its computing services: low-latency support for esports, real-time interaction for cloud computing, and AI applications [12]. - Shunwang Technology is also expanding its gaming business with new mobile game developments and partnerships to enhance user engagement [13][14]. Strategic Considerations - The company is considering share buybacks and major shareholder increases based on strategic development plans, with any decisions to be disclosed in accordance with regulations [15].

Core Insights - The article highlights a record high of 166 domestic game approvals in August, indicating strong policy support and a rich supply of products, leading to a positive outlook for the industry [1][2]. Group 1: Approval Statistics - In August, the National Press and Publication Administration approved 166 domestic games, marking a historical peak; a total of 1,050 domestic game approvals have been issued in the first eight months of the year, significantly higher than the 850 approvals during the same period last year [2]. - The average monthly issuance of domestic game approvals has increased from 88.8 in 2023 and 108.8 in 2024 to 131 in the first eight months of this year [2]. Group 2: Market Performance - The gaming industry in China continued to show positive growth in July 2025, with a domestic market size reaching 29.084 billion yuan, a year-on-year increase of 4.62%; mobile gaming grew by 0.92%, while client-based gaming surged by 16.56% [3]. - Notable game performances include Tencent's "Delta Action" achieving 20 million daily active users in July, and the mobile game "Valorant" launched on August 19, which boosted user engagement [3]. Group 3: Investment Recommendations - The stable approval rhythm and abundant game supply lead to a favorable outlook for companies with quality content reserves and solid fundamentals [4].

Investment Rating - The report assigns an "Overweight" rating to the gaming industry [1] Core Insights - In August, the number of domestic game approvals reached a record high of 166, with several listed companies receiving product approvals, indicating a positive outlook for the industry supported by favorable policies and abundant supply [3] - The domestic gaming market size in July 2025 was 29.084 billion yuan, showing a year-on-year growth of 4.62%, with mobile gaming growing by 0.92% and client-based gaming by 16.56% [5] Summary by Sections Approval Data - In August 2025, the National Press and Publication Administration approved 166 domestic games, marking a historical high. A total of 1,050 domestic game approvals have been issued in the first eight months of the year, significantly higher than the 850 approvals in the same period last year [5] - The report highlights specific games that received approvals, including titles from companies like NetEase, Bilibili, and 37 Interactive Entertainment [5] Market Performance - The gaming industry continues to show positive growth, with notable performances from games like Tencent's "Delta Action" achieving 20 million daily active users in July [5] - The report maintains a positive outlook for the gaming industry in the third quarter, particularly during the summer peak season, due to stable approval rhythms and rich product supply [5] Investment Recommendations - The report recommends companies with solid fundamentals and quality content reserves, including Kying Network, 37 Interactive Entertainment, Giant Network, Perfect World, Shenzhou Taiyue, and others [5][6]

Group 1 - The core viewpoint is that the approval of domestic game licenses has reached a historical high, with 166 games approved in August, contributing to a total of 1,050 licenses issued in the first eight months of the year, significantly higher than the 850 licenses in the same period last year [1][2] - The monthly average of domestic game licenses issued has increased from 88.8 in 2023 and 108.8 in 2024 to 131 in the first eight months of 2025, indicating a stable approval rhythm and a rich supply of game products [2] - Notable approved products include titles from major companies such as NetEase, Bilibili, and Tencent, showcasing a diverse range of offerings in the market [2] Group 2 - The gaming industry continues to show positive growth, with the domestic market size reaching 29.084 billion yuan in July 2025, a year-on-year increase of 4.62%, driven by strong performance in both mobile and client games [3] - The industry is expected to perform well in the third quarter, particularly during the summer peak season, supported by favorable policies and abundant supply [3] - Key games contributing to user engagement include Tencent's "Triangular Action" and the recently launched mobile game "Valorant," indicating a healthy consumer interest in gaming [3]