Changjiang: The overall media and internet industry continues to recover, with revenue increasing year-on-year. Sector performance is mixed.

Changjiang released a research report stating that the media and internet industry as a whole continued its recovery trend in the first half of 2024, with year-on-year growth in operating income, but with differentiated sector performance. With the issuance of game licenses becoming a regular occurrence and new games being launched continuously, the gaming industry continued its recovery trend, driving improvement in the revenue side of the gaming sector, but with varied profit performance. Due to the concentration of new game releases in 2024Q2, the increase in user acquisition costs, and the overall increase in marketing promotion efforts by manufacturers, the sector's sales expenses ratio increased year-on-year. In terms of the internet sector, macroeconomic factors had a certain impact on advertising business; the user base and market for short videos continued to grow; demand for movie viewing in the first half of 2024 still awaited recovery, putting pressure on the sector's performance. Overall Industry: In the first half of 2024, the media and internet industry as a whole continued its recovery trend, with year-on-year growth in operating income, but with differentiated sector performance. In the first half of 2024, Changjiang Publishing & Media's internet sector achieved a revenue of 255.2 billion yuan, a year-on-year increase of 1.9%; with a revenue of 131.8 billion yuan achieved in 2024Q2, remaining flat year-on-year but growing 7% quarter-on-quarter; influenced by changes in cost and tax preferential policies, Changjiang Publishing & Media's internet sector achieved a net profit attributable to shareholders of 15.82 billion yuan in the first half of 2024, a year-on-year decrease of 37.7%; with the net profit attributable to shareholders of the media sector in 2024Q2 decreasing by 40% year-on-year and increasing by 17% quarter-on-quarter to 8.55 billion yuan. Gaming Sector: With the issuance of game licenses becoming routine and new games continuously being launched, the gaming industry continued its recovery trend, driving improvements in the revenue side of the gaming sector, but with varied profit performance. In the first half of 2024, the domestic gaming market's revenue increased by 2.1% year-on-year to 147.3 billion yuan, with a year-on-year decrease of 2.7% to 74.6 billion yuan in 2024Q2 due to base effects. The gaming sector's revenue reached 19.2 billion yuan in 2024Q2, a year-on-year increase of 4.6% and a quarter-on-quarter increase of 4.7%, marking the fifth consecutive quarter of year-on-year growth since 2023Q2. Due to the concentration of new game releases in 2024Q2, an increase in user acquisition costs, and the overall increase in marketing promotion efforts by manufacturers, the sector's sales expenses ratio increased year-on-year, with the gaming sector's net profit attributable to shareholders in 2024Q2 decreasing by 32.9% to 1.83 billion yuan. With a continuous flow of product launches on the content side and gaming consumption remaining resilient under supply push, the sector's performance may continue to recover. In addition, there is still room for growth overseas. Internet Sector: Macro factors had a certain impact on the advertising business; the user base and market for short videos continued to grow. The internet sector achieved a revenue of 9.1 billion yuan in 2024Q2, a year-on-year decrease of 8.7%. On the profit side, the internet sector achieved a net profit attributable to shareholders of 1.04 billion yuan in 2024Q2, a year-on-year decrease of 20%, mainly due to changes in tax preferential policies. Marketing Sector: Since 2023, the elevator media sector has maintained a relatively high level of prosperity, with the overall advertising market showing weak recovery and the elevator media sector demonstrating relatively strong resilience. The overall advertising market achieved a year-on-year growth of 2.7% in the first half of 2024. In the first half of 2024, expenditures on elevator LCDs, elevator posters, and train/high-speed rail station advertisements continued to grow positively, with elevator scene advertisements showing double-digit growth year-on-year, exceeding the overall market growth and demonstrating steady progress. The advertising marketing sector achieved a revenue of 45 billion yuan in 2024Q2, a year-on-year increase of 3.8%, which was slightly lower compared to Q1; influenced by non-main business of individual companies, the sector achieved a net profit attributable to shareholders of 1.41 billion yuan in 2024Q2, a year-on-year decrease of 57.3%. With the gradual normalization of the domestic economy and the gradual release of consumer potential, the overall advertising market is expected to further recover. Film and Cinema Sector: Movie viewing demand in the first half of 2024 still awaited recovery, with significant increases in ticket prices putting pressure on the sector's performance. The overall box office in 2024Q2 was 7.418 billion yuan, a year-on-year decrease of 28.75%, reaching 58.74% of the level in 2019. The number of moviegoers was 183 million times, a year-on-year decrease of 31.46%, reaching 55.62% of the level in 2019. The average ticket price was 40.3 yuan, a year-on-year increase of 3.60%, and an increase of 5.22% compared to 2019. The cinema sector achieved a net loss of 340 million yuan in 2024Q2, with a reversal from a profit in the previous quarter. The film production sector also saw a decrease in revenue and profit in Q2. Publishing Sector: Operating performance remained steady, demonstrating industry resilience, with 2024Q2 performance continuing to be affected by tax policies. In the first half of 2024, the total retail sales of books decreased year-on-year by 6.20%, entering a period of major promotions in online bookstores in the second quarter, with the overall decline in the book retail market narrowing compared to the first quarter. The revenue of the publishing sector in the first half of 2024 and in 2024Q2 remained stable compared to the same period in 2023; affected by the expiration of tax relief policies, the net profit attributable to shareholders in 2024Q2 decreased by 22% year-on-year to 4.7 billion yuan; excluding the impact of tax preferential policies, the total profit of the sector in Q2 increased by 1% year-on-year to 6.3 billion yuan. Risk Warning: 1. Risks of the recovery not meeting expectations; 2. Risks of technological development falling short of expectations.