Central China: "Black Myth: Wukong" becomes popular, focus on game sector valuation recovery.

Central China released a research report stating that on August 20th, the domestic buyout-style 3A game "Black Myth: Wukong" was released, with a peak of over 3 million online players after going live, becoming incredibly popular. Major mainstream media outlets have reported on it, and consumer products related to the game such as electronic products, concerts, and coffee have seen a surge in sales. The value of the gaming industry is beginning to spill over into sectors like culture and tourism, and consumer goods. A document released by the State Council on August 3rd for the first time mentioned the internet gaming and electronic sports industry, with the number of game licenses issued increasing by nearly 40% year-on-year. The positive value of the gaming industry has been recognized at the national level by government departments, media, and commercial organizations, which is beneficial for the valuation repair of the gaming sector. Central China's main points are as follows: Market review and valuation performance: In August, the media sector fell by 1.56%, while the Shanghai Composite Index, the CSI 300, and the Growth Enterprise Market fell by 3.28%, 3.51%, and 6.38% respectively. Compared to the benchmark indices, the media sector had a significantly smaller decline in August, ranking fifth in terms of industry-wide increases and decreases. Among the sub-sectors, the animation, gaming, and radio and television sub-sectors saw increases, with growth rates of 4.29%, 2.33%, and 1.08% respectively; all other sub-sectors saw declines, with significant drops in social and interactive media, information search and aggregation, and other cultural and entertainment sub-sectors by 9.89%, 5.41%, and 5.09% respectively. The overall valuation of the sector in August was not significantly different from that in July. As of August 30, 2024, the PE (ttm, whole sector, excluding negative values) of the CITIC media sector was 19.00 times, the average PE since 2019 was 24.60 times, the median was 24.06 times, the maximum was 42.74 times, the minimum was 16.46 times, and the current PE historical percentile was 10.1%. In a slightly weak market environment, it is recommended to continuously focus on the high dividend and low-risk attributes of the publishing sector. Looking at the recent release of performance reports, the dividend distribution strength of listed companies in the media sector has increased to varying degrees, and with policy encouragement, listed companies will continue to improve the quality of dividends in the future and enhance investor returns. Recommended to focus on: 37 Interactive Entertainment Network Technology Group (002555.SZ), G-bits Network Technology (603444.SH), Kingnet Network (002517.SZ), Focus Media Information Technology (002027.SZ), Beijing Enlight Media (300251.SZ). Risk warning: Macroeconomic fluctuations affecting cultural consumption demand; regulatory policies tightening unexpectedly; intensification of market competition; lower-than-expected quality of output content; project characteristics leading to fluctuations in company performance.