Summary of Key Points from the Conference Call Company and Industry Overview - The conference call discusses **Kaiying Network**, a company in the gaming and AI industry, focusing on its recent developments and market position in China [2][12]. Core Insights and Arguments - **Exclusive Licensing**: Kaiying Network has secured exclusive rights for the **Legend and Chuan Shi IP** in mainland China, becoming the only legal distributor of box-type products, which is expected to enhance its market share [2][3]. - **Revenue Growth**: The **Legend Box** business achieved a revenue of **9.4 billion RMB** in 2024, marking a **41.6% year-on-year increase** with a gross margin close to **90%** [3]. - **Strategic Partnerships**: Agreements worth **450 million RMB** have been signed with leading publishers like **Sanjiu Interactive Entertainment**, which will establish brand zones within the Legend Box, anticipated to significantly boost revenue [3]. - **AI Application Development**: The AI companion application **Eve** has shown outstanding performance in its initial tests, leading the market in terms of personification and memory capabilities, and is exploring gamified applications in real-life scenarios [2][5]. - **Growth in Female Gaming Market**: The female-oriented gaming market is rapidly expanding, with the game **Love and Deep Space** projected to generate over **5 billion RMB** in revenue in 2024, indicating a growing demand for romance and companionship games [6][7]. Additional Important Insights - **AI Platform Commercialization**: Leading AI platforms like **Talky** and **Xingye** have reached **30 million monthly active users**, with projected revenues of **10 million USD** in 2024, showcasing high commercialization potential [8]. - **Comprehensive AI Strategy**: Kaiying's AI strategy encompasses both software (ToB SaaS, ToC AI companions) and hardware (AR/VR products), with plans to release AI glasses this year, positioning itself uniquely in the domestic A-share gaming sector [9]. - **Upcoming Product Launches**: Kaiying has launched several products in 2025, including **Dragon Valley World** and **Biochemical Baby Yuan Code**, with more significant titles like **Three Kingdoms: The Return of Hearts** expected by early 2026 [4][10]. - **Enhanced Distribution Capabilities**: The company has improved its distribution capabilities, which are expected to play a crucial role in capturing the nostalgic MMO market and the Legend market [11]. - **Future Expectations**: There is an expectation for Kaiying to continue its comprehensive AI industry chain development and to monitor the release of new models and game products closely [13].

Summary of Key Points from the Conference Call Industry Overview - The domestic self-developed online game revenue has shown significant growth, with mobile game revenue reaching 125.3 billion RMB, a year-on-year increase of 16.6% [1][3] - Mini-program game revenue reached 23.3 billion RMB, with a remarkable year-on-year growth of 40%, indicating a recovery in the gaming industry [1][3] - The overall gaming market in China saw actual sales revenue of 168 billion RMB in the first half of 2025, reflecting a year-on-year growth of 14.1% [3] Key Players and Performance - Leading gaming companies such as Tencent, NetEase, and miHoYo have achieved growth through stable operations of long-standing games [1][7] - Tencent expanded its market share in games like "CF" and "Delta Force," while NetEase's "Identity V" reached a historical revenue high [1][7] - Mid-tier companies have also shown strong innovation, with titles like Giant's "Supernatural Action Group" and G-bits' "Sword Legend" exceeding market expectations [1][8] Role of Gaming Community Platforms - Gaming community platforms like Taptap and Xiaohongshu are becoming crucial channels for game distribution and advertising, especially as user acquisition costs rise [1][5] - Taptap, as a leading gaming community, is expected to reach 100 million monthly active users (MAU) in the future, with significant advertising revenue potential [2][10] Policy Support - Increased policy support for the gaming industry has been noted, with the supply of game licenses rising, providing more opportunities for new product launches and stable operations of existing products [1][9] Taptap Insights - Taptap's MAU reached 44 million by the end of 2024, a 23% year-on-year increase, and is positioned as a primary distribution channel for game developers due to its no-commission model [1][13] - The platform's advertising revenue grew by approximately 22% in 2024, with ad exposure increasing by 43% [18] - Future projections suggest Taptap's MAU could reach between 110 million to 140 million, with potential annual advertising revenue of 4 to 6 billion RMB [19][21] Legend Box Insights - Legend Box focuses on the "Legend" genre games, with a monthly active user count of 400,000 to 450,000 and a repurchase rate exceeding the industry average by 200% [2][28] - The platform's core business model relies on advertising, with potential growth in live streaming revenue [30] - Future projections indicate that with exclusive IP rights, Legend Box could see its annual revenue grow significantly, potentially reaching 1.5 to 3 billion RMB [32] AI Developments - Kaiying Network is expanding into AI with products like the emotional companion game "Eve" and an AI game creation platform "Soon," which are expected to perform well upon launch [33] Future Outlook - Heartbeat Company is expected to see strong performance in the second half of 2025, driven by new product launches and high player engagement [25] - The gaming community's development trend indicates a shift towards community platforms for advertising, with Taptap and Legend Box being key players to watch [35]

Group 1 - The core viewpoint of the news is the collaboration between Zhejiang Xianqu Interactive Entertainment Network Technology Co., Ltd. and Jiangxi Ganwan Information Technology Co., Ltd., which involves a payment of 200 million yuan for the establishment of a "Ganwan Game" celebrity zone within the Legend Box [2][3] - Ganwan Game is a well-known game distribution platform in China, focusing on the refined operation and innovative promotion of legendary games, having successfully created several phenomenon-level game products such as "Blue Moon Legend" and "Dragon Soaring Legend" [2] - Xianqu Interactive has developed a unique vertical community platform for legendary games, integrating game experience, community interaction, live streaming, and item trading, which enhances user engagement and community activity [2] Group 2 - This partnership represents an extension of the long-term collaboration between Kaiying Network and Ganwan Game, marking a comprehensive upgrade of the legendary IP ecosystem [3] - The entry of Ganwan Game will provide easier content access for its large user base and utilize integrated marketing strategies, including celebrity endorsements, to enhance product market penetration [3] - Both companies will share resources and collaborate on traffic sharing, content co-creation, and ecosystem building to elevate the market presence of the legendary IP and improve player experience [3]

Group 1 - The core point of the article is the collaboration between Kaiying Network's subsidiary Zhejiang Xianqu Interactive Entertainment and Zhongxu Future's Jiangxi Ganwan Information Technology, focusing on the establishment of a "Ganwan Games" star zone within the Legend Box [1] - Ganwan Games will pay 200 million yuan to Xianqu Interactive for the brand space, which will be used for showcasing, promoting, and operating games, as well as for star game live streaming and endorsements [1]

Core Viewpoint - The gaming industry is experiencing a new cycle of prosperity, with both supply and demand sides showing strong growth, benefiting community platforms significantly [1][2][4]. Demand Side - From January to May, the domestic mobile game market in China grew by 20% year-on-year, reaching a market size of 1,411 billion yuan, with mobile games accounting for 1,052 billion yuan of this total [2][4]. - In May alone, the gaming market size was 281 billion yuan, reflecting a 10% year-on-year increase, while the mobile game market size was 212 billion yuan, up 12% year-on-year [2]. Supply Side - The number of domestic game licenses issued from January to June reached 757, marking a 21% year-on-year increase, with June alone seeing 147 licenses issued, a 41% year-on-year increase and the highest monthly figure in 22 years [4][5]. - The frequency of issuing import licenses has been reduced to once a month, with 55 licenses issued from January to June, remaining stable year-on-year [5]. Community Platforms - Major gaming community platforms such as TapTap, Haoyou Kuaibao, and others are expected to benefit from the high user activity in the gaming sector [7]. - TapTap has a monthly active user base of 44.05 million, while Haoyou Kuaibao has around 50 million users, indicating strong engagement in gaming communities [8]. Game Performance - Long-standing games like NetEase's "Identity V" have seen over 50% year-on-year revenue growth, while new games from mid-sized developers have also performed well, exceeding expectations [4][5]. - The top games in revenue rankings are predominantly those launched before 2024, indicating the sustained popularity of established titles [4].

Summary of Key Points from the Conference Call Company Overview - The conference call focuses on **Kying Network**, a company operating in the gaming industry, particularly in the **legendary game market**. Core Insights and Arguments - The overall valuation of the gaming sector remains between **15-18 times**, with expectations for strong performance in the summer gaming season and AI applications, suggesting investors should overweight the gaming sector [2][4] - Kying Network holds over **50% market share** in the legendary game market, utilizing user platform development and ecosystem creation to extend player lifecycles and reduce marketing costs. The revenue from the "Legend Box" product has significantly increased, with daily active users steadily rising [2][5] - Since Q4 2024, Kying Network has accelerated the launch of new products, including the SLG product "Three Kingdoms: The Return of Hearts," and major IP products like "Monopoly" and "King of Fighters," with multiple launches expected in August and September [2][6] - The company is actively expanding its overseas business, having established offices in Hong Kong and South Korea, and acquired retro IPs. The overseas business is expected to continue its high growth trajectory of **220%** from 2024, with a focus on Southeast Asian markets [2][7] - In the AI sector, Kying Network is developing AI companionship and social applications, with plans to release AI game engine version 2.0 in the summer, and is exploring AI-assisted content creation [2][8] Additional Important Content - The revenue from the "Legend Box" product grew from **200 million** in 2022 to **600 million** in 2023, and is projected to reach **900 million** in 2024, indicating a high gross margin due to its advertising revenue model [5] - Daily active users increased from **400,000** at the beginning of 2024 to **450,000** by the end of the year, with a target of reaching **500,000** [5] - Kying Network's current valuation is **17 times**, with potential advantages through its IP platform and AI initiatives, allowing it to break free from traditional gaming product cycles [3][10] - The company is also exploring AI toys and collaborating with Dapeng Glasses to develop an AI glasses ecosystem [9]