Core Insights - The domestic gaming market in China achieved a record sales revenue of 168 billion yuan in the first half of 2025, marking a year-on-year growth of 14.08% [3] - The number of gaming users reached 679 million, also a historical high, with a year-on-year increase of 0.72% [3] Group 1: Market Performance - The gaming sector is experiencing strong growth, driven by the successful launch of new games and the steady performance of established titles [3] - The rise in e-sports and mini-program games is contributing significantly to market expansion [3] - The overall improvement in industry sentiment and accelerated technological advancements are providing robust support for the gaming sector [3] Group 2: Regulatory Environment - The National Press and Publication Administration continues to issue gaming licenses, with 134 licenses granted in July 2025, including 127 domestic and 7 imported games [4] - A total of 884 domestic gaming licenses were issued from January to July 2025, reflecting a year-on-year increase of 20.60% compared to the same period in 2024 [4] - The regular issuance of gaming licenses indicates ongoing regulatory support for the gaming industry [5] Group 3: Investment Opportunities - The current market conditions and the positive outlook for the gaming sector present attractive investment opportunities, particularly in gaming ETFs [5]

Investment Rating - The industry investment rating is "Positive" and maintained [7] Core Insights - In July, the National Press and Publication Administration approved 127 domestic game titles, including key products from Huatuo and Giant Network. The summer gaming season has seen strong performance from multiple new games, indicating a sustained high level of activity in the gaming sector [2][4] - The new game cycle, favorable policy trends, and AI catalysis are expected to drive continued improvement in the gaming sector's fundamentals, suggesting that the valuation of the gaming sector still has upward elasticity. Investors are encouraged to continue monitoring investment opportunities in this sector [2][4] Summary by Sections Game License Issuance - In July, 127 domestic games received approval, including Huatuo's "Kingshot" and Giant Network's "Famous Generals Kill." Additionally, 7 imported game licenses were granted [9] - "Kingshot" has seen significant revenue growth, doubling in May and increasing by 56% in June, ranking third in China's mobile game overseas revenue growth [9] New Game Performance - Several new games from listed gaming companies have performed strongly during the summer season. For instance, Giant Network's "Supernatural Action Group" reached the top 4 in the free game rankings and top 20 in the revenue rankings on its launch day [9] - Other notable performances include Jiubite's "Staff Sword Legend," which entered the iOS revenue rankings top 13, and Tencent's "Dungeon and Fighter Mobile," which topped the iOS revenue rankings [9] Future Outlook - The pipeline for key gaming companies is robust, with several new titles set to launch, including "Tomb Raider: Journey" and "Douluo Continent: Evil Legend" [9] - The new game cycle is expected to enhance the sector's fundamentals, with ongoing policy stability and the integration of AI in gaming likely to boost valuations and performance [9]

Market Overview - On July 23, both the Hong Kong Hang Seng Index and the A-share Shanghai Composite Index rose, with the former stabilizing above 25,500 points, reaching a new high since November 2021, while the latter touched the critical 3,600 points [2] - The gaming sector in Hong Kong saw significant capital inflow, rising by 4%, with Tencent (00700.HK) being the largest contributor, increasing by 4.94% to HKD 552.0 per share, marking a new high since June 2021 [2][3] Company Performance - Tencent's stock performance was notable, with a significant increase in market capitalization, while other gaming stocks like Kingsoft (03888.HK), NetEase (09999.HK), Bilibili (09626.HK), and Xindong Company (02400.HK) also saw gains of 3.89%, 2.59%, 2.33%, and 1.56% respectively [2][3] - Flying Fish Technology (01022.HK) experienced the highest single-day increase of 49.15% following a profit announcement, projecting a net profit of approximately RMB 55 million to 70 million for the first half of 2025, compared to a loss of RMB 2 million in the same period last year [3][7] A-share Market - In the A-share market, the gaming sector also performed well, with ST Huatuo (002602.SZ) rising by 4.22%, and other companies like Gigabit (603444.SH) and 37 Interactive Entertainment (002555.SZ) also recording gains [4] Regulatory Environment - The National Press and Publication Administration approved 127 domestic games and 7 imported games in July, contributing to the positive sentiment in the gaming sector [5] - Notable approvals included Tencent's "Summon Adventure" and NetEase's "Diablo IV," indicating a steady release of new content in the market [5] Industry Trends - Analysts noted a solidifying trend of regular game approvals, coupled with domestic gaming innovations, suggesting a recovery in the industry's growth pace [6] - The summer season is a critical period for game developers, with many launching new titles aimed at enhancing player engagement through strong narratives and social elements [6] Financial Outlook - Market expectations for Tencent's Q2 2025 revenue and gross profit are optimistic, with projected year-on-year growth of 12% and 17% respectively, driven by an 18% increase in online gaming revenue [7] - HSBC forecasts NetEase's Q2 performance to be stable, with an expected revenue growth of 11%, supported by a significant increase in PC game revenue [8] - Analysts express a positive outlook for the gaming sector, citing improvements in supply and the emergence of quality content, alongside the impact of AI technology on cost reduction and efficiency [8]

Core Insights - The National Press and Publication Administration announced the approval of 134 game licenses in July, consisting of 127 domestic and 7 imported games, maintaining a high issuance level [1] Group 1: Game License Approvals - A total of 134 game licenses were issued in July, including 127 domestic and 7 imported games [1] - The cumulative number of game licenses issued this year has reached 946, with 884 being domestic, showing significant year-on-year growth [6] - The issuance of game licenses has returned to a normalized state, supporting the development of the gaming industry [6] Group 2: Notable Games and Companies - Major companies such as Tencent, NetEase, 37 Interactive Entertainment, Giant Network, and others have successfully obtained licenses for various games [2][3] - Notable games include NetEase's "Diablo IV" and "Marvel's Midnight Suns," which are highly anticipated by players [3] - Tencent's "Ultimate Showdown" has also received a license, with player reservations now open [5] Group 3: Market Trends - In the first half of the year, a total of 757 domestic game licenses were issued, representing over a 20% increase compared to the same period in 2024 [5] - The focus on game quality and social responsibility in content is expected to accelerate the introduction of high-quality games [6]