Guosen: DouBao AI video generation internal testing continues to be bullish on the prospects of the media internet sector moving upwards.

Guosen Securities released a research report stating that it continues to be optimistic about the opportunities for the media and internet sector driven by themes and economic recovery. 1) Economic conditions are expected to continue to improve, with the gaming sector recommending targets such as Kingnet Network (002517.SZ); supply improvement and the box office market expected to continue to improve, focusing on the possibility of a recovery in the film and television sector, recommending channels such as Wanda Film Holding (002739.SZ) and content such as Beijing Enlight Media (300251.SZ); on the media side, focusing on advertising growth brought by the economic recovery, recommending companies such as Focus Media Information Technology (002027.SZ); recommending IP-related companies such as Shanghai Yaoji Technology (002605.SZ); also paying attention to the publishing sector from the perspective of high dividends and low valuation. 2) Optimistic about opportunities in themes such as overseas expansion, AIGC, VR/AR; in the short term, focusing on the significant updates from Zhipuqingying, the nomination of "Black Myth: Wukong" for the Golden Joystick Awards, Byte's Dou bao's internal testing of AI video generation, and the outstanding performance of AI search applications in October, focusing on intellectual property, large models, and application processes. Guosen's main points are as follows: Performance of the media sector this week: The industry rose by 3.25%, lagging behind the Shanghai and Shenzhen 300, and lagging behind the Growth Enterprise Market Index. This week (November 1st to 8th), the media industry rose by 3.25%, lagging behind the Shanghai and Shenzhen 300 (3.25%), and lagging behind the Growth Enterprise Market Index (7.26%). Top risers include KAISA JiaYun Technology Inc., Huawen Media Group, Zhejiang Sunriver Culture Tourism, Perfect World, while top decliners include Simei Media, Hunan TV & Broadcast Intermediary, Guangdong Insight Brand Marketing Group, and QITIAN Technology Group. In comparison, the media sector ranks 23rd in terms of gains and losses among all sectors this week. Key points to focus on: Dou bao's AI video generation internal testing, outstanding performance of AI search applications in October. 1) On November 8th, Zhipuqingying's video generation quality reached a cinematic level, and the new Qingying can also generate matching sound effects, this feature will be launched for public testing this month; 2) On November 5th, the Golden Joystick Awards officially announced the nomination list for "Best Game of 2024," with "Black Myth: Wukong" receiving a nomination. 3) AI assistant Dou bao under ByteDance is currently testing video generation functionality. 4) The AI product rankings for October show outstanding performance from AI search applications. Key data to track this week: Continued recovery in November box office sales. 1) This week (November 2nd to 9th), box office sales reached 399 million yuan. The top three movies were "Burn City" (87.21 million, accounting for 21.8% of sales), "Venom: Let There Be Carnage" (81.49 million, accounting for 20.3% of sales), and "The Story Not Known to Anyone" (75.84 million, accounting for 18.9% of sales); 2) In terms of variety shows, "Goodbye Lover Season 4," "Blind Box Travel Bureau," "Heartfelt Signal Season 7," "Running Man Season 8," and "Flowers and Youth Season 6" are among the top shows; 3) In the gaming sector, the top three Chinese mobile game revenues in September 2024 were DotDot Interactive's "Whiteout Survival," miHoYo's "Collapse: Star Rail," and Tencent's "PUBG MOBILE." Risk alerts: Regulatory policy risks; performance risks; risks of goodwill and asset impairment, etc.