According to the Zhitong Finance APP, Guoyuan has released a research report stating a bullish outlook on the investment line of AI, optimistic about the model iteration in 2025 and the continued prosperity on the application side, which is expected to drive the valuation and performance improvement in the media sector. In terms of sectors, for games: overall industry sentiment is improving with the launch of new games, mini-games and MR contribute incremental highlights, focusing on game developers with rich product pipelines such as Kingnet Network (002517.SZ), etc. Publishing: stable cash flow, high dividend, actively focusing on Southern Publishing and Media (601900.SH), etc. For film and IP, supply drives box office performance, AI promotes IP revaluation, with a focus on Mango Excellent Media (300413.SZ), etc.

Guoyuan Securities' main points are as follows:

AI: OpenAI officially launched the full version of o1 and the sora model, and released the o3 model; CES 2025 opens. In December, both domestic and foreign models continue to iterate, OpenAI launched a 12-day new product release event, rolling out the full version of o1, the sora model, and announcing the latest inference model o3. Other overseas companies are also continuously breaking through in model development, with Fei-Fei Li's team releasing WorldLabs, Google launching the image generation model Imagen3 and the video generation model Veo2, and Meta releasing the open-source AI model Llama3.3; meanwhile, the domestic model sector is also evolving, Tencent's Hunyuan large model available with open-source video capability, Kimi released the visual thinking model k1, and the domestic large model DeepSeek-V3 is open-source. CES 2025 opens, Jensen Huang delivers the opening keynote, announcing the launch of the RTX5090D GPU, NIVIDIA Cosmos world foundational model platform, and other key content.

Games: In 2024, the total market size of China's game industry is estimated at 325.783 billion yuan, a year-on-year increase of 7.53%, with the mobile game market at 238.217 billion yuan, a year-on-year increase of 5.01%. In December, 122 domestic game licenses were issued, along with 13 import game licenses, bringing the total for the year to 1306 domestic game licenses and 110 import game licenses. In the A-share market, Kingnet Network's "Sword of the Ancient Dragon", "Rise of the Overlord", "Little Soldiers Conquer the World", and "Super Soldier" along with Beijing Ultrapower Software's "Seventh Chronicle Survivor" were granted domestic game licenses; in the Hong Kong stock market, NetEase's "Infinity" received a domestic game license, while Tencent's "Monster Hunter: Travelers", "Red Alert: Glory", and NetEase's "Top Pursuit" received import game licenses. For new products, NetEase's mobile game "Yanyun Sixteen Sounds" is set to launch on January 9; G-bits Network Technology's "Wen Jian Chang Sheng" will be launched on January 2; Perfect World’s "God Demon Continent" is set to launch on January 17, and Mutong’s "Decisive Victory at the Peak" is scheduled for release in January, providing a boost to the industry's growth.

Film: In 2024, the total box office in China is projected to be 42.502 billion yuan, a year-on-year decline of 22.61%. The domestic box office champion is "Hot and Spicy", with a box office of 3.417 billion yuan, accounting for 8.0% of the total box office during the period. The second place is "Riding Life 2" (box office 3.361 billion yuan, accounting for 7.9%), followed by "Catching Stuffed Toys" (box office 3.328 billion yuan, accounting for 7.8%). The fourth and fifth places are "The Twentieth" and "Bears Unleashed: Time Reversal"; among the top five box office films, four were released during the Spring Festival.

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.