Core Viewpoint - The report from Dongfang Securities emphasizes the importance of vertical multi-modal AI application opportunities, highlighting that technological breakthroughs and cost optimization will accelerate industry trends, leading to user growth, increased payment penetration, and enhanced commercialization [1] Group 1: Industry Trends - Since the beginning of the year, the domestic multi-modal video generation sector has seen accelerated iteration of models, significantly narrowing the technological gap with overseas counterparts [2] - The most notable change is the introduction of intelligent storyboarding, which lowers the entry barrier for users, while a unified multi-modal architecture enhances the efficiency and flexibility of creative intent expression [2] - The firm predicts substantial progress in both B-end and C-end expansions by 2026, with a focus on observing AI penetration in the content sector [2] Group 2: Technological Advancements - The acceleration of model development among domestic video generation companies has led to significant improvements in foundational attributes such as physical realism, motion fluidity, and instruction adherence [3] - Recent model releases have enhanced capabilities in storyboard functions and audio-visual synchronization, addressing previous gaps in functionality [3] - The competition in the video generation sector is now akin to the state of large language models (LLMs) in 2025, with companies achieving high baseline capabilities, suggesting that future differentiation will depend on specific application scenarios [3] Group 3: User Accessibility - The video generation sector has transitioned to a "dashboard era" characterized by precision and control, with recent models supporting multi-modal input architectures [4] - The generation duration has become more user-friendly, increasing to approximately 15 seconds per generation, which further lowers the creative barrier for both B-end and C-end users [4] - The models now allow for detailed editing of generated content, facilitating quick adjustments and enhancing the efficiency of creative expression [4] Group 4: Investment Recommendations - Relevant investment targets include Alphabet Inc. (GOOGL.US), Kuaishou-W (01024), MINIMAX-WP (00100), and Meitu Inc. (01357) [4]

Investment Rating - The industry investment rating is "Positive" and is maintained [4] Core Viewpoints - The multi-modal video generation sector is experiencing accelerated iteration of domestic models, significantly narrowing the technological gap with overseas counterparts. The most notable change is the introduction of intelligent storyboarding, which lowers the entry barrier for users. The unified multi-modal architecture supports more efficient and flexible expression of creative intent, leading to substantial progress in both B-end and C-end expansions in 2026. Model vendors are focusing on the AI penetration in the content sector while continuing to enhance their technologies [1][7] Summary by Sections Industry Overview - The video generation sector is entering a phase of precise control, with recent iterations of models such as Vidu Q3, Kuaishou 3.0, and Seedance 2.0 supporting multi-modal inputs, which enhances controllability and improves the success rate of generated content. The duration for single generation has increased to around 15 seconds, further lowering the creative threshold for both B-end and C-end users [7] Investment Recommendations and Targets - Emphasis should be placed on vertical multi-modal AI application opportunities, with expectations that technological breakthroughs and cost optimizations will accelerate industry trends, driving user growth, payment penetration, and commercialization. Companies with multi-modal AI applications expanding overseas are particularly noteworthy, as they may experience faster growth rates. Recommended targets include Kuaishou-W (01024, Buy) and Meitu Inc. (01357, Buy) [2]