Summary of the Conference Call Industry Overview - The gaming industry is experiencing a new product cycle that drives performance growth for leading companies such as Giant and Jibite, with mobile gaming growing by 17% in the first half of the year. However, the suspension of game license approvals has caused performance fluctuations for some companies, making those with rich product reserves more advantageous [2][3][6]. Company Insights: Kaiyin - Kaiyin has been re-included in the "Golden Stock" list, achieving rapid progress through strategic investments and new contracts. The company has resolved legal disputes with Yumeide and maintained stable profitability after restructuring its business framework. Its main operations include R&D, publishing, and IP investment [2][4][5]. - The company has a strong presence in the "Legend" gaming sector, having launched "Miracle" with a peak MAU of 16 million. The Legend IP remains highly popular, with the global and domestic IP gaming market showing single-digit growth in the first half of 2025 [2][7]. - After the management takeover by Jin Feng, the company has streamlined operations, enhancing overall profitability through mergers and acquisitions. The current business structure includes R&D, publishing, and IP investment, which has laid a solid foundation for future growth [4][8][9]. Market Trends and Future Potential - The gaming industry still holds growth potential, especially for companies with rich product reserves, which may continue to see performance upgrades driven by new products. The mobile gaming sector achieved a 17% growth in the first half of 2025, indicating robust vitality [6]. - Despite challenges from the suspension of game licenses leading to the end of life cycles for older products, companies like Kaiyin and Perfect World, which have significant product reserves and expected discrepancies, are recommended as key investment targets [6]. Specific Strategies in the Legend Sector - Kaiyin has a well-defined strategy in the Legend sector, collaborating with Century Huachong and Tanwan to form a clear upstream and downstream deployment. This includes sharing technology platforms to enhance product supply capabilities and maintaining innovation through version iterations and continuous operations [11]. - The company is also investing in the SLG sector, with anticipated releases such as "Three Kingdoms: The World Returns" expected to contribute to revenue and profits in Q4 2025 or Q1 2026 [11]. Diversification Efforts - Beyond the Legend sector, Kaiyin is diversifying into other game series such as Hot River and Xianxia, as well as making strides in the SLG sector with major IP games expected to launch in Q1 2026. The company is also exploring new monetization avenues through mini-program games and AI applications, including the Soo platform and AI 3D companion product Eve [12]. Governance Improvements - Since Jin Feng's appointment, the company has made governance improvements, including a five-year no-reduction commitment and a recent buyback of 200 million. These measures address previous concerns and enhance shareholder returns, supporting the valuation through core drivers such as high-margin products and potential blockbuster logic [13]. Box Business Potential - The box business boasts over 90% gross margin and over 50% net margin, with significant order growth observed. Revenue for the first half of the year exceeded 600 million RMB, with expectations for accelerated growth in the second half. A price increase is also anticipated in October, indicating substantial integration and enhancement potential [14][15]. Impact of AI Technology - Although AI technology has not yet reflected in gaming sector premiums since 2024, the company has made notable advancements in AI applications. Innovations such as the Soo distribution platform and AI toys are expected to increase user engagement and generate advertising revenue, potentially enhancing valuation if blockbuster products emerge [16].