According to the Intelligent Financial APP, Guoyuan Securities released a research report stating that it is bullish on the investment theme of AI. It is expected that the continuous prosperity of model iteration and application side in the second half of the year will help boost the valuation and performance of the media sector. In terms of sectors, for games: overall improvement in mood with the launch of new games, focus on small games, and contributions to MR. Emphasis on game developers with rich product pipelines, such as Kingnet Network (002517.SZ), Beijing Ultrapower Software (300002.SZ), Giant Network Group (002558.SZ), Perfect World (002624.SZ), etc. For publishing: stable cash flow, high dividends. Actively watching Southern Publishing and Media (601900.SH), Anhui Xinhua Media (601801.SH), etc. Film, TV, and IP: supply driving box office performance, AI driving IP revaluation, with a focus on Mango Excellent Media (300413.SZ), Beijing Enlight Media (300251.SZ), Shanghai Film (601595.SH), COL Group Co.,Ltd. (300364.SZ), etc.

Guoyuan Securities' main points are as follows:

Market performance.

Monthly price changes (2024.10.1-2024.10.31, the same below): The media industry (Wind) rose by 5.16%, ranking 8th in sub-industries. During the same period, the CSI 300 index fell by 3.16%, the SSE Composite Index fell by 1.70%, and the Chinext Price Index fell by 0.49%. The third quarter report has been disclosed. In the first three quarters of 2024, the overall revenue of the media sector (excluding ST stocks) was 356.801 billion yuan, a year-on-year increase of 0.38%; net profit attributable to the parent company was 22.661 billion yuan, a year-on-year decrease of 32.98%, and the profit side was under pressure year-on-year.

Key Sector Tracking

AI: OpenAI introduces Canvas, ByteDance releases the first AI intelligent body-ear headphone. Overseas, OpenAI launches Canvas, Adobe introduces the new AI video generator FireflyVideo Model, Lenovo builds personal AI intelligent body AI Now; domestically, ByteDance releases the first AI intelligent body-ear headphone, Zhipu releases the native multimodal world model Emu3, iFlytek releases the Spark 4.0 Turbo model.

Gaming: The Q3 gaming market size steadily increased, with 128 game licenses issued in October. In the third quarter of 2024, the size of China's gaming market reached 91.766 billion yuan, up +22.96% month-on-month and +8.95% year-on-year. In October, 113 domestic game licenses and 15 imported game licenses were issued. New games from major companies such as Kingnet Network's "Black Dragon Storm" and "Eternal Dragon Tribe", Tencent's "Dragon Stone War", "Burst Team", "Heaven II: Alliance", "Goddess of Victory: Neige", and Kuaishou's "Three Kingdoms: Bound to God Zhou" have obtained licenses, ensuring a continuous and sufficient supply of licenses. In terms of new product launches, Tencent's "Pokemon Gathering" will go live on November 7, G-bits Network Technology's "Echoes of Anomalies" will be released on November 13, Kuaishou's "Endless Dream Return" will launch on November 21. The expected supply of high-quality new games is likely to boost industry confidence and drive continuous growth in the gaming market size.

Film and Television: In October 2024, the total domestic box office reached 3.624 billion yuan. The monthly domestic box office champion was "Volunteers: Battle for Life and Death", with box office revenue of 1.115 billion yuan, accounting for 30.7% of the total box office during the period. The second place was "Road of Flames" (0.461 billion yuan, 12.7%), followed by the imported film "Venom: The Final Dance" (0.4 billion yuan, 11.0%), and the 4th and 5th places were taken by "749 Bureau" and "Panda Plan".

Risk warning

Risks include underperformance of product performance, slower-than-expected development of artificial intelligence technology, slower-than-expected macroeconomic conditions, stricter policy regulation, and intensifying industry competition.