Group 1: AI Tool Launch - Tencent Games has launched an AI creation tool called VISVISE, aimed at enhancing the efficiency of game art production across four major pipelines: animation production, 3D model production, intelligent NPCs, and digital asset management [2] - The tool significantly improves efficiency in various stages of game creation, such as skin binding, which can be reduced from 1-3.5 days per item to over 8 times faster with VISVISE [2] - The core value of VISVISE is to balance quality and efficiency in game production, addressing the industry's need for cost reduction and efficiency improvement [2] Group 2: Revenue Challenges - Tencent's flagship game, Honor of Kings, has experienced a revenue decline, with June's income dropping to $143 million, a nearly 25% decrease month-over-month [3] - Despite maintaining a daily active user count of over 100 million, the game's revenue growth shows significant uncertainty, with no substantial increase in user scale since November 2020 [4] - The revenue for Honor of Kings fell from $2.22 billion in 2022 to $1.48 billion in 2023, with a slight recovery projected for 2024 at $1.87 billion, indicating volatility in earnings [5] Group 3: Competitive Landscape - Tencent faces increasing competition from emerging companies like miHoYo and Eagle Dynamics, which have successfully launched popular titles such as Genshin Impact and Arknights, respectively [6][7] - The contrasting strategies between Tencent's established titles and the innovative approaches of competitors highlight a potential stagnation in Tencent's game development capabilities [8] - miHoYo's Genshin Impact generated $4 billion in revenue in 2023, showcasing the effectiveness of its global content strategy, while Tencent's reliance on traditional revenue models is under scrutiny [9] Group 4: International Expansion - Tencent has invested approximately 978.67 billion yuan in 33 overseas game companies since 2012, indicating a strategy to bolster its game business through international partnerships [9] - The company has successfully acquired rights to popular games like CrossFire and Dungeon & Fighter, which have contributed significantly to its portfolio [9] - However, there are concerns that relying heavily on acquisitions may lead to a lack of focus and potential inefficiencies in Tencent's international strategy [10][11] Group 5: Future Considerations - Tencent must reconsider its dependency on social and channel strategies as it introduces VISVISE to the market, aiming to break free from past reliance [12] - The company faces a critical decision on whether to adapt to changing market dynamics or risk becoming a stable yet unremarkable cash cow [12]

Group 1 - The core view of the report indicates that the Hong Kong internet sector is currently undervalued globally, with AI driving the release of mid-term performance results [1][3][21] - The Hang Seng Technology Index rose by 4.1% in August, outperforming the Nasdaq Internet Index, which increased by 2.7% during the same period [1][11] - Key stocks that performed well in August include Reading Group, JD Health, and Weimeng Group in Hong Kong, and iQIYI, BOSS Zhipin, and SEA in the US [1][17] Group 2 - The report highlights that AI has shown significant effects on the advertising business, cloud computing scenarios, and corporate efficiency for internet giants, with Tencent's advertising growth maintaining at 20% and Alibaba Cloud's growth accelerating to 26% [3][4] - The report recommends continued investment in Tencent Holdings, Alibaba, Kuaishou, Meitu, and Tencent Music, which are less correlated with macroeconomic conditions [3][4] - The report provides earnings forecasts and investment ratings for key companies, with Tencent Holdings expected EPS of 23.83 in 2025 and a PE ratio of 23.9, while Alibaba is projected to have an EPS of 6.89 and a PE of 18.7 [4]

Core Insights - The article discusses the Chinese government's "Artificial Intelligence +" initiative, which aims to integrate AI into six key sectors to enhance productivity and innovation [3][9]. Group 1: Action Plan Overview - The initiative emphasizes a people-centered approach, leveraging China's unique advantages in data, industry scale, and application scenarios [3]. - The strategy focuses on forward-looking planning and systematic layout, encouraging open sharing while ensuring safety and control [3]. Group 2: Goals and Timelines - By 2027, the goal is to achieve over 70% penetration of AI applications in the six key sectors [4]. - This penetration is expected to exceed 90% by 2030 [5]. - By 2035, the initiative aims to transition China into a new phase of intelligent economy and society [6]. Group 3: Key Action Areas - The six core action areas include technology innovation, industrial upgrading, quality improvement in consumption, enhancing public welfare, modernizing governance, and global cooperation [9]. Group 4: Implementation Mechanisms - The plan encourages enterprises to deeply integrate AI into their strategies, organizations, and business processes, fostering a new generation of "intelligent native" companies [11]. - The initiative will be coordinated by the National Development and Reform Commission, with local adaptations and specific implementation plans [12]. Group 5: Technological Support - Eight key supports include enhancing foundational model capabilities, innovating data resource supply, and establishing a national AI application testing base [13].

Core Insights - The article emphasizes the comprehensive promotion of the "Artificial Intelligence +" initiative by the State Council, aiming to position AI as a core engine of new productive forces through systematic planning and targeted policies across six key areas [3][4][6]. Summary by Sections 1. Core Principles and Positioning - The action plan focuses on a people-centered approach, leveraging China's unique advantages in data, industrial scale, and application scenarios. It emphasizes forward-looking planning and systematic layout while encouraging open sharing under safe and controllable conditions [3]. 2. Roadmap and Goals - By 2027, the plan aims for over 70% penetration of new-generation smart terminals and applications in six key areas [4]. - By 2030, this penetration is expected to exceed 90% [5]. - By 2035, the initiative aims to propel China into a new stage of intelligent economy and society [6]. 3. Six Core Action Areas - The initiative will focus on six major areas: technology, industry, consumption, livelihood, governance, and global cooperation [8]. 4. User Application Layer - The plan aims to develop both service and product ecosystems, creating a seamless, integrated interaction experience through smart assistants and various smart terminal products [9]. 5. Technology Supply Layer - Eight key supports will be established to enhance model capabilities, data supply, intelligent computing power, application environments, open-source ecosystems, talent cultivation, policy frameworks, and safety capabilities [10][14]. 6. Industry Implementation Path - Enterprises are encouraged to deeply integrate AI into their strategies and operations, fostering "intelligent native" technologies, products, and services [11]. 7. Implementation Mechanism - The initiative will be coordinated by the National Development and Reform Commission, with local adaptations and specific implementation plans developed by various departments [12]. 8. Technological Innovation - The initiative promotes deep integration of AI with scientific and technological advancements, accelerating industrial intelligence development, enhancing consumer product quality, and improving social governance [13]. 9. Key Industry Trends - The article highlights the need for entrepreneurs to focus on specific vertical opportunities rather than broad approaches, aligning policy benefits with industry expertise to address concrete pain points [33]. - It discusses the necessity for startups to choose between building platform ecosystems or specializing in niche markets to compete against giants like Google [34]. - The evolution of visual AI technology is noted, with opportunities shifting from entertainment to deeper industrial applications [35]. - The article suggests a pragmatic approach to AI employee deployment, advocating for a "human in the loop" model to gradually increase AI's role in business processes [36]. - The hardware foundation for "physical AI" is established, opening new opportunities for domestic manufacturers to innovate in robot applications and core components [37].

Core Insights - The Cologne International Game Show recently showcased Tencent Games' first professional AI model, VISVISE, which garnered significant attention through live demonstrations [1][3]. Group 1: VISVISE Overview - VISVISE is designed as a comprehensive solution for game art production, covering four main pipelines: animation production, 3D model generation, intelligent NPCs, and digital asset management [4][10]. - The model streamlines six key stages of game creation: model generation, texture production, skin binding, animation production, scene construction, and rendering [4][6]. Group 2: Industry Adoption and Trends - Over 50 external companies, including Perfect World and Kuro Game, have adopted VISVISE, indicating its growing influence in the industry [3][8]. - According to Unity's 2025 Game Industry Trends Report, 96% of game studios are integrating AI tools into their workflows, although developers are becoming more cautious and focused on practical solutions [9]. Group 3: Efficiency and Cost Reduction - VISVISE significantly enhances efficiency, with skin binding processes reduced from 1-3.5 days per item to over eight times faster, and animation production becoming fully automated through keyframe generation and intelligent interpolation [3][6]. - The AI tools allow for rapid response to changing game design requirements, reducing costs and time associated with traditional motion capture methods [7][10]. Group 4: Customization and Unique Styles - The application of VISVISE allows game developers to input unique data sets, enabling the creation of distinctive styles tailored to specific projects, thus addressing concerns about aesthetic homogenization in AI-generated content [9][10]. - The product operates on a SaaS-like business model, charging based on service usage, and aims to continuously introduce advanced AI tools to support global game developers [10].

Economic News - Shanghai real estate policy adjustments include reducing housing purchase restrictions and optimizing housing credit policies, effective from August 26, 2025 [1] - The central government aims to establish a national carbon trading market by 2030, covering major industrial sectors and enhancing voluntary emission reduction mechanisms [1] - The National Development and Reform Commission is gathering opinions from enterprises on the 14th Five-Year Plan, focusing on expanding domestic demand and stabilizing employment [1] - The People's Bank of China is promoting financial support for high-quality forestry development, including innovations in forest rights mortgage loans [1] - The People's Bank of China conducted a 7-day reverse repurchase operation of 288.4 billion yuan at an interest rate of 1.40% [1] - U.S. President Trump plans to deploy troops to cities like Chicago to combat crime, which has sparked public discontent [4] Company Insights - Nvidia has launched the Jetson AGX Thor developer kit for robotics applications, priced at $3,499, available globally [10] - Huida Technology's president is under investigation for insider trading, but the company asserts that it will not affect its operations [10] - Elon Musk's xAI has filed a lawsuit against Apple and OpenAI, alleging collusion to maintain dominance in the AI sector [10] - Yangfan New Materials is under investigation, but the company's control remains unchanged and operations continue normally [10] - Tencent has unveiled a global game creation AI solution, VISVISE, aimed at streamlining game art development processes [10] Industry Research - The report analyzes the white liquor industry's historical cycles, identifying four key periods since 2000, with a focus on the 2013-2015 downturn [9][10] - It notes that white liquor stock prices typically bottom out two quarters before fundamental improvements are confirmed [10] - Current indicators suggest a positive trend in demand for white liquor, particularly with the upcoming Mid-Autumn Festival and National Day [10] - The report recommends focusing on leading companies like Kweichow Moutai and Wuliangye, as the white liquor sector is expected to rebound [10] Banking Sector Analysis - Jiangsu Bank reported a 7.8% year-on-year increase in revenue for the first half of 2025, with net profit rising by 8.0% [12][13] - The bank's asset quality remains strong, with a non-performing loan ratio of 0.84%, down 2 basis points from the previous quarter [14][15] - The bank's net interest margin is 1.78%, reflecting a slight decline, while total assets and loans grew by 27.0% and 18.3%, respectively [14][15] - The report projects net profit growth rates of 10.9%, 11.5%, and 11.7% for 2025-2027, maintaining a "strongly recommended" rating for the bank [16]

Core Insights - The article highlights the significant advancements in AI technology within the gaming industry, particularly showcased at the recent Devcom developer conference alongside the Cologne International Game Show. Major companies like Microsoft, Tencent, Google, and Meta presented over 20 discussions focused on how AI can enhance game art production efficiency and integrate seamlessly with traditional workflows [1][3]. Group 1: AI Tools and Solutions - Tencent Games launched its AI-driven comprehensive game creation solution, VISVISE, which includes tools for animation production, model creation, digital asset management, and intelligent NPCs, aimed at alleviating the repetitive and labor-intensive tasks in game art development [3][8]. - The MotionBlink tool within VISVISE can automatically complete animation sequences based on minimal user input, significantly reducing the time required for animation production from several days to just seconds [3][15]. - The GoSkinning tool, part of VISVISE, automates the skinning process for 3D models, improving efficiency by up to 60% in animation skinning tasks, and has been successfully implemented in popular games like "PUBG Mobile" and "Peacekeeper Elite" [8][24]. Group 2: Challenges in Game Art Production - Traditional game art production consumes 50%-60% of time on asset creation, with 3D modeling and animation being the most labor-intensive processes. The complexity of these tasks often leads to inefficiencies, particularly in skinning and animation adjustments [9][10]. - The article discusses the limitations of traditional methods such as manual keyframing and motion capture, which can be time-consuming and require extensive corrections, highlighting the need for AI solutions to streamline these processes [10][11]. Group 3: Development and Future of AI in Gaming - Tencent's approach to developing VISVISE was driven by actual development needs, beginning its exploration of AI in gaming as early as 2016. The system was officially launched in 2024, integrating various AI tools tailored to different aspects of game creation [24][26]. - The future of AI in gaming is seen as a critical area for development, with the potential for AI to enhance NPC interactions and create more immersive gaming experiences. The relationship between gaming and AI is described as symbiotic, with games serving as both a testing ground and a catalyst for AI advancements [29][30][32].

Core Viewpoint - The article discusses the significant advancements in AI technology within the gaming industry, particularly focusing on Tencent's VISVISE, a comprehensive AI solution aimed at enhancing the efficiency of game art production processes. Group 1: AI in Game Development - Major international companies like Microsoft, Tencent, Google, and Meta presented over 20 AI-related topics at the Devcom developer conference, highlighting AI's role in improving game art production efficiency and integrating AI tools into traditional workflows [1] - The demand for precision in game art has increased exponentially, leading to a geometric rise in workload [2] Group 2: VISVISE Overview - Tencent Games launched VISVISE, an AI-driven solution that encompasses a full suite of tools for animation production, model creation, digital asset management, and intelligent NPCs, aimed at assisting game artists with repetitive and labor-intensive tasks [4] - VISVISE's MotionBlink tool can automatically complete animation sequences based on minimal user input, significantly reducing the time required for animation production [5][7] Group 3: Efficiency Gains - Traditionally, animators spent 60%-70% of their time on manual frame completion, with a 10-second animation taking 3-7 person-days to finalize. In contrast, AI can generate 200 frames of animation in just 4 seconds [6][7] - The GoSkinning tool within VISVISE has been successfully implemented in popular games like "PUBG Mobile" and "Peacekeeper Elite," showcasing its practical application [11] Group 4: Challenges in Game Art Production - 50%-60% of the work in traditional game art production is dedicated to creating art assets, with 3D modeling and animation being the most labor-intensive processes [13] - The complexity of game data poses challenges for AI, as it must seamlessly integrate into existing workflows while allowing artists to make adjustments [17] Group 5: Development of VISVISE - VISVISE was developed based on actual development needs, with Tencent starting its exploration of AI in gaming as early as 2016. The focus shifted to art production pipelines by 2018, leading to the introduction of the GoSkinning tool in 2022 [33][34] - The efficiency of the GoSkinning tool has improved by over 60% in animation skinning processes, demonstrating the effectiveness of AI in enhancing production workflows [34] Group 6: Future of AI in Gaming - The article suggests that the gaming industry will continue to be a testing ground for AI technologies, with the potential for AI to revolutionize NPC behavior and interactions, moving beyond scripted responses to more human-like understanding [40][45]

Core Viewpoint - Tencent Games showcased its full-chain AI creation solution, VISVISE, at the annual Gamescom in Cologne, which aims to enhance efficiency and quality in game art production [1] Group 1: VISVISE Overview - VISVISE covers four major pipelines: animation production, 3D model generation, intelligent NPCs, and digital asset management, streamlining six key stages of game creation [1] - The solution has been applied internally at Tencent and has served over 50 domestic and international companies, including Lilith Games and 37 Interactive Entertainment [1] Group 2: Efficiency Improvements - Traditional skinning processes take 1 to 3.5 days per piece, while VISVISE can enhance skinning efficiency by over 8 times [2] - GoSkinning, an AI automatic skinning tool, can complete skinning tasks in 1 to 3 hours, compared to the traditional 1.5 to 3.5 days [3] - MotionBlink, an animation generation model, can produce 60 frames of smooth animation from 5 to 10 key frames, improving efficiency by 3 to 5 times [4] Group 3: Industry Impact - Over 80% of players demand higher immersion and realism in virtual worlds, pushing game developers to elevate art quality standards [1] - VISVISE addresses core pain points in game art production, helping developers enhance production efficiency and adapt to industry demands [4] - The integration of AI in game development is expected to liberate animators from repetitive tasks, allowing them to focus on more creative work [6]

Investment Rating - The report maintains an "Outperform" rating for the internet sector, indicating expected performance above the market index by more than 10% [4][33]. Core Insights - The e-commerce industry remains highly competitive, with platforms increasing investments in instant retail to seek new growth. AI is the current investment focus, benefiting major players in cloud computing and advertising, with North American giants seeing accelerated revenue growth in Q2 and raising their annual CAPEX [2][29]. - Key companies recommended for investment include Tencent Holdings, Alibaba, Meitu, Kuaishou, NetEase Cloud Music, and Tencent Music, which are expected to benefit from AI advancements [2][29]. Company Dynamics - Meta has restructured its AI team into four sub-departments, focusing on foundational research, AI infrastructure, consumer products, and advanced models [15][17]. - OpenAI plans to establish a local team in India and launch a tailored ChatGPT program to tap into the growing AI market [18]. - Google is expanding its AI capabilities globally, introducing new features to enhance user experience in search tasks [19]. - Alibaba is seeking to spin off its subsidiary, Zhibo Zhixing, for an independent listing in Hong Kong, aiming to enhance its smart vehicle and AI strategy [20]. - Tencent launched a new AI art creation tool, "VISVISE," aimed at improving efficiency in game development [21]. Underlying Technology - DeepSeek-V3.1 has been officially released, featuring significant upgrades in user interaction and performance [23][27]. - ByteDance introduced a new open-source AI model, Seed-OSS-36B, enhancing capabilities for developers [24]. - Alibaba's Tongyi Lab and DingTalk launched a new end-to-end speech recognition model, Fun-ASR, significantly improving accuracy in various industries [24]. Industry Policy - Shanghai's government has released a plan to accelerate the integration of AI and manufacturing, aiming to create competitive AI+manufacturing ecosystems by 2027 [25]. - The Ministry of Industry and Information Technology is collecting typical application scenarios for AI to support small and medium enterprises [28].