Kaiyuan Securities released a research report stating that AI may continue to fully empower various sub-industries in the media sector to reduce costs and improve efficiency, as well as to explore new monetization models. The media sector may welcome a resonance of valuation and performance.
According to Zhitong Finance APP, Kaiyuan Securities released a research report stating that the media sector experienced an increase in October, which may mainly stem from a market-wide rally driven by policy. Looking ahead, with the steady release of new games and several major films expected to be scheduled for the 2025 Spring Festival and other important release periods, the release of content supply may help restore performance in the gaming and film sectors, while the advertising sector's performance may continue to recover with consumer recovery. The publishing sector is expected to maintain stable performance and high dividend characteristics, and AI may continue to fully empower various sub-industries in the media sector to reduce costs and improve efficiency, as well as to explore new monetization models. The media sector may welcome a resonance of valuation and performance.
The major viewpoints of Open source Securities are as follows:
1. Review and Outlook: AI progress is the main catalyst for the market, and the performance of the content (film and television, gaming) sector is significantly impacted by the supply side, which may welcome a dual restoration of performance and valuation in the future.
The media sector is expected to see two rounds of increases in February-March 2024 and October 2024. The increase from February to March may primarily be driven by AI industry advancements such as OpenAI's introduction of the video generation model Sora and Kimi's record high visits. Since October, the rise is mainly attributed to a market-wide rally driven by policy. In the segmented sectors, the advertising and publishing sectors outperformed the overall industry, while the gaming and film sectors underperformed. In terms of valuation, the sector's PE (TTM) has declined since May. Regarding performance, in the first three quarters of 2024, the advertising and publishing sectors showed relatively stable performance, with the publishing sector exhibiting significant high dividend characteristics. The gaming sector suffered from weak supply of new games, while the film sector experienced a decline in performance due to insufficient supply of major films.
Looking ahead, with the steady release of new games and several major films expected to be scheduled for the 2025 Spring Festival and other important release periods, the release of content supply may help restore performance in the gaming and film sectors. The advertising sector's performance may continue to recover with consumer recovery, while the publishing sector is expected to maintain stable performance and high dividend characteristics. AI may continue to fully empower various sub-industries in the media sector to reduce costs and improve efficiency, as well as to explore new monetization models. The media sector may welcome a resonance of valuation and performance.
2. One of the core main lines for 2025: AI applications.
AI applications continue to innovate, and the commercialization space may gradually open up. "AI + Film and Television" new products are continuously emerging, AI companions for users are starting to be scaled, AI Agents are helping the e-commerce industry reduce costs and increase efficiency, AI is significantly enhancing marketing productivity, "AI + Education" is continually iterating, and commercial applications for B and C ends are beginning to be realized. Key recommendations include mango excellent media (300413.SZ), Kuaishou-W, hangzhou shunwang technology (300113.SZ), and beijing zhidemai technology, with beneficiary symbols including zhejiang huace film & tv (300133.SZ), zhejiang jinke tom culture industry (300459.SZ), dou god education (300010.SZ), southern publishing and media (601900.SH), etc.
3. The second core theme of 2025: Cultural going abroad.
Domestic companies' mobile games still have prominent competitiveness abroad, and "Black Myth: Wukong" is driving PC and console games to go abroad, which may become an important driving force moving forward; under the resonance of supply and demand, short dramas going abroad are expected to continue high growth, with the market size potentially reaching the hundred billion dollar level; TikTok users continue to grow rapidly, and commercialization may accelerate, providing growth space for overseas marketing companies. Key recommendations include tencent, xd inc, beijing ultrapower software (300002.SZ), perfect world (002624.SZ), g-bits network technology, with beneficiary symbols including wuxi boton technology (300031.SZ), col group co.,ltd. (300364.SZ), bluefocus intelligent communications group, and yidian tianxia, etc.
4. The third core theme of 2025: IP Derivatives.
(1) Anime and game peripherals: With the large user base of Generation Z, the emergence of the "Guzi" economy that provides emotional value and meets basic spiritual needs will drive the industry's scale to continuously expand. (2) Collectible card games: Under the various demands of collection and social interaction, volume and price may rise together, promoting sustained high growth of the market size. Key recommendations include shanghai film (601595.SH), shanghai yaoji technology, alpha group (002292.SZ), with beneficiary symbols including huali technology (301011.SZ), etc.
Risk reminder: Progress in AI large model research and development may fall short of expectations, new game launches may be delayed or revenue may fall short of expectations, and the scale growth of the IP derivative industry may not meet expectations.
