Investment Rating - The report maintains a "Buy" rating for Tencent, NetEase, and Bilibili, with target price adjustments reflecting positive growth expectations [5][12]. Core Insights - The Chinese gaming market experienced strong growth in the first half of 2025, driven by new products, AI integration, and refined operations, with Tencent, NetEase, and Bilibili outperforming their peers [1][36]. - The report anticipates continued revenue growth for Tencent, NetEase, and Bilibili in Q2 2025, with expected year-on-year increases of 15%, 17.7%, and 60% in gaming revenue respectively [2][3][4]. - AI applications are becoming increasingly prevalent in the gaming industry, with approximately 60% of game companies utilizing AI to enhance content production efficiency by 30%-50% [1][39]. Summary by Company Tencent - Expected Q2 2025 total revenue growth of 11%, with gaming revenue up 15% and advertising revenue up 19% [2]. - Key game reserves include "Honor of Kings World," "Valorant: Source Action," and "Fate Trigger," with a target price raised to 670 HKD, corresponding to a 23/20 times P/E ratio for FY25/26 [2][47]. NetEase - Anticipated Q2 2025 revenue growth of 12.6%, with gaming revenue expected to rise by 17.7%, primarily driven by strong growth in PC games [3]. - Target price adjusted to 166 USD, reflecting an 18.2/17.1 times P/E ratio for FY25/26 [3][47]. Bilibili - Projected Q2 2025 revenue growth of 20%, with gaming revenue expected to increase by 60% [4]. - Target price increased to 28 USD, corresponding to a 38/26 times P/E ratio for FY25/26 [4][47]. Industry Trends - The Chinese gaming market saw a 17% year-on-year growth in the first five months of 2025, with mobile games growing by 20% [1][36]. - Policy support for high-quality game development has intensified, with 991 game licenses approved in 2025, up from 857 in the previous year [1][36]. - The average operational lifespan of top 100 games in China has increased, indicating a shift towards long-term game management strategies [1][36].