Core Insights - Goldman Sachs reports that the Chinese gaming and entertainment sector experienced significant stock price increases in 2025, with large and mid-cap stocks rising by 50% to 80% compared to the Hang Seng China Enterprises Index's 26% [1] - The report indicates that the strong performance is driven equally by valuation expansion and earnings per share growth [1] - Looking ahead to 2026, the firm believes the risk-reward profile remains attractive, with a focus on "alpha" driven opportunities [1] Group 1: Market Trends - Chinese gaming publishers and content platforms, represented by Tencent Holdings and NetEase, are accelerating their overseas expansion, leveraging capital, talent, and technological capabilities [2] - The global market share of Chinese game manufacturers is expected to increase from the current level of approximately 15% [2] Group 2: AI Impact - AI is seen as a transformative force, reducing production and labor costs while enhancing efficiency and revenue potential, particularly in gaming and advertising sectors [2] - The total addressable market (TAM) for AI-generated film tools is projected to expand tenfold by 2028 [2] Group 3: Investment Recommendations - Goldman Sachs identifies key buy stocks including Tencent, NetEase, Kuaishou, Bilibili, and Tencent Music, with Tencent's core business expected to maintain low to mid-double-digit growth annually [2] - The firm maintains a "buy" rating on Tencent, lowering the target price from HKD 770 to HKD 752 [2]

Core Viewpoint - The report from Credit Lyonnais on October 27 indicates that SenseTime-W is expected to benefit from accelerated revenue from generative AI and reduced operating expenses due to business restructuring, leading to a 62% increase in the target price from HKD 1.85 to HKD 3, while maintaining an "outperform" rating [1] Group 1 - SenseTime has formed a strategic partnership with Cambricon Technologies to expand its AI computing power using domestic chips [1] - The company's AI models are accelerating commercialization in scenarios such as AI glasses and AI video generation tools, contributing to new revenue streams [1]