Group 1 - The report by Haitong International initiates coverage on China Ruyi (00136) with an "Outperform" rating and a target price of HKD 4.50, highlighting its potential to become "China's Netflix 2.0" [1] - China Ruyi operates across a wide range of sectors including content production and distribution, online streaming (Pumpkin Movies), cinema exhibition (Wanda Films), online gaming (Jingxiu Games), and IP derivatives, showcasing its comprehensive business layout [1] - The company has created and invested in over 100 film copyrights, achieving a cumulative box office of approximately RMB 40 billion, with projected total revenues of RMB 3.7 billion and RMB 2.2 billion for FY2024 and the first half of FY2025, respectively [1] Group 2 - Pumpkin Movies, as China's largest pure subscription-based streaming platform, focuses on content quality and personalized recommendations for paid users, boasting around 99.3 million registered users and 38.1 million paying users by June 2025 [2] - The gaming segment has become the largest revenue source for the company, contributing 55% of total revenue in the first half of 2025, with a nearly 500% compound annual growth rate from 2022 to 2024, supported by Tencent and various acquisitions [2] - Haitong International predicts adjusted net profits for China Ruyi to reach RMB 2.42 billion, RMB 2.63 billion, and RMB 2.73 billion from 2025 to 2027, based on a PEG valuation method referencing an industry average PEG of 0.8 and a 30% compound annual growth rate in net profit [2]

Group 1 - The core viewpoint of the report is that China Ruyi (00136) is positioned as a market leader in the Chinese film and television industry, with the potential to develop into a "Chinese version of Netflix 2.0" [1] - The company has a broad business layout covering content production and distribution, online streaming (Pumpkin Movies), cinema operations (Wanda Films), online gaming (Jingxiu Games), and IP derivatives [1] - China Ruyi has created and invested in over 100 film copyrights, with a cumulative box office of approximately 40 billion RMB [1] Group 2 - For the fiscal years 2024 and the first half of 2025, the company's total revenue is projected to be 3.7 billion RMB and 2.2 billion RMB, respectively, with adjusted net profits expected to grow significantly to 1.25 billion RMB and 1.3 billion RMB [1] - The company employs a "producer-centered system" that allows for strong control over content themes, production, and quality, successfully launching several high-grossing films [1] - Through its stake in Wanda Films, China Ruyi has enhanced its cinema operation capabilities and secured valuable pre-release investment windows for films, further solidifying its advantages in content investment and distribution [1] Group 3 - As the largest pure subscription-based streaming platform in China, Pumpkin Movies focuses on content quality and personalized recommendations for paying users, boasting approximately 99.3 million registered users and 38.1 million paying users by June 2025 [2] - The gaming business has become the largest revenue source for the company, contributing 55% of total revenue in the first half of 2025, with a nearly 500% compound annual growth rate from 2022 to 2024 [2] - The company is on a path to build a high-quality exclusive content library similar to Netflix, serving both online users through Pumpkin Movies and offline users through Wanda Films [2] Group 4 - The adjusted net profits for China Ruyi are forecasted to reach 2.42 billion RMB, 2.63 billion RMB, and 2.73 billion RMB for the years 2025 to 2027 [2] - The target price of 4.50 HKD is derived using the PEG valuation method, referencing the industry average PEG level of 0.8 times and the company's 30% compound annual growth rate in net profit [2]