Core Viewpoint - The rapid iteration of AI video models has created a landscape where users can easily generate videos, but practical application remains a challenge for ordinary users [2][3][4]. Group 1: User Needs and Model Evaluation - Many users require clear narratives, reasonable actions, and smooth visuals rather than complex effects [4][6]. - The evaluation focuses on whether these models can solve real problems in practical applications, particularly for novice content creators [5][7]. - A series of assessments were designed to test the models' capabilities in real-world scenarios, emphasizing practical video content creation [8][9]. Group 2: Model Selection and Testing - Eight popular video generation models were selected for testing, including Veo3, Hailuo02, and Jimeng3.0, which represent the core capabilities in the current video generation landscape [11]. - The testing period was set for July 2025, with specific attention to the models' performance in generating videos from text prompts [11]. Group 3: Evaluation Criteria - Five core evaluation dimensions were established: semantic adherence, physical laws, action amplitude, camera language, and overall expressiveness [20][25]. - The models were assessed on their ability to understand prompts, maintain physical logic, and produce coherent and stable video outputs [21][22][23][24][25]. Group 4: Practical Application and Limitations - The models can generate usable visual materials but are not yet capable of producing fully deliverable commercial videos [57]. - Current models are better suited for creative sketch generation and visual exploration rather than high-precision commercial content [65]. Group 5: Future Directions - Future improvements may focus on enhancing structural integrity, semantic understanding, and detail stability in video generation [60][61][62]. - The rise of image-to-video models may provide a more practical solution for commercial applications, bypassing some of the challenges faced by text-to-video models [62].

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2][8] Core Insights - The domestic video generation models are continuously advancing, driving industry development. The first global AI unit story collection "New World Loading" premiered recently, showcasing the capabilities of the Kuaishou Keling AI model [5] - Keling AI has achieved significant revenue growth, reaching 150 million yuan in Q1 2025, with nearly 70% of its revenue coming from paid subscriptions by professional users in the self-media and marketing sectors [5] - The top five domestic video generation models have made notable progress, with ByteDance's Seedance 1.0 ranked first, followed by Minimax Hailuo02 and Kuaishou Kling2.0 [5] Summary by Sections Industry Performance - The industry has shown strong relative returns over the past year, with a 34.3% increase in relative returns over 12 months and a 47.59% increase in absolute returns [4] Investment Recommendations - The report suggests focusing on companies such as Zhongwen Online, Yuedu Group, Kaiying Network, Shanghai Film, Kunlun Wanwei, and others, as they are expected to benefit from the ongoing advancements in video generation applications [5]

Investment Rating - The report maintains a "Buy" rating for the AI video generation industry, highlighting the accelerated commercialization and strong performance of domestic manufacturers [2]. Core Insights - The AI video generation industry is entering a commercial development fast track, with significant advancements in technology and diverse application scenarios. The global market size is projected to reach approximately 25.63 billion USD by 2032, with a compound annual growth rate (CAGR) of 20% from 2025 to 2032 [4][40]. - The industry is driven by both pricing and model capabilities, with current API prices ranging from 0.2 to 1 RMB per second. The cost advantages of AI video generation compared to traditional video production methods are substantial [46][47]. - Domestic manufacturers, such as Kuaishou and Meitu, are showing outstanding performance in the competitive landscape, with products like Kuaishou's Kling and ByteDance's Seedance leading the market [58][62]. Summary by Sections 1. Technology Path - The evolution of AI video generation technology has progressed from static image sequences to GAN, Transformer, Diffusion Model, and DiT, enhancing content richness and controllability [4][7]. - The DiT architecture, which combines diffusion models with transformers, has emerged as a key direction in the industry, validated by the Sora model's performance [23][31]. 2. AI Video Generation Industry 2.1 Driving Factors - The growth of the AI video generation industry is fueled by both pricing and performance improvements, with significant cost advantages over traditional video production methods [46][47]. - The current mainstream generation duration is 5-10 seconds, with advancements allowing for longer video generation, enhancing narrative capabilities [47]. 2.2 Industry Applications - The industry has diverse applications in B2B sectors such as film content creation, commercial advertising, e-commerce marketing, and education, as well as in C2C scenarios that enhance user engagement [51][54]. 2.3 Product and Competitive Landscape - Domestic manufacturers like Kuaishou and ByteDance are leading the market with their advanced models, achieving high usage and web traffic [58][62]. - The competitive landscape shows that products like Seedance1.0 and Veo2/3 are among the top performers, indicating a strong domestic capability in AI video generation [58][62]. 3. Investment Recommendations and Related Stocks - The report suggests focusing on Kuaishou (1024.HK) and Meitu (1357.HK) as key investment opportunities in the AI video generation sector, given their strong commercial performance and growth potential [64][75].

Investment Rating - The report maintains an "Outperform" rating for the media sector [5][40]. Core Views - The short-term performance cycle is expected to improve, with a long-term positive outlook on AI applications and IP trends [4][40]. - The report highlights the importance of focusing on individual stocks within the gaming, advertising media, and film sectors, as the fundamentals show signs of recovery [4][40]. Summary by Sections Industry Performance - The media sector experienced a decline of 1.78% during the week of June 16-20, underperforming both the CSI 300 index (-0.45%) and the ChiNext index (-1.66%) [12][14]. - Notable gainers included Lianjian Optoelectronics, Baina Qiancheng, and ST Huatong, while major decliners were Yue Media and Yuanlong Yatu [12][13]. Key Developments - OpenAI signed a $200 million contract with the U.S. Department of Defense and launched a new feature called "ChatGPT Record" [2][17]. - ByteDance introduced the AI video generation model Seedance 1.0, outperforming Google's latest model [2][18]. - MiniMax launched a video agent tool that generates videos from text commands and maintains character consistency using uploaded images [2][19]. - Beijing introduced support measures for the gaming and esports industry, offering up to 5 million yuan for outstanding projects [2][19]. Important Data Tracking - The box office for the week of June 16-22 reached 366 million yuan, with the top three films being "Sauce Garden Case" (150 million yuan), "New Dragon Trainer" (73 million yuan), and "Breakup List" (32 million yuan) [3][21]. - The top-grossing mobile games in May 2025 were "Whiteout Survival," "Gossip Harbor: Merge & Story," and "PUBG MOBILE" [28][29]. Investment Recommendations - The report suggests focusing on gaming, advertising media, and film sectors, with specific stock recommendations including Kaiying Network, Giant Network, and Yaoji Technology [4][40]. - The report emphasizes the potential of AI applications across various sectors, including marketing, education, and gaming, and recommends companies like Bubble Mart and Yaoji Technology for IP trends [4][40].