Huajin Securities: December saw a record number of game licenses issued, with high-quality content and strong IP driving growth.

Huajin Securities released a research report stating that on the afternoon of December 24th, the National Press and Publication Administration released the "December 2024 Domestic Network Game Approval Information" and "December 2024 Import Network Game Approval Information". A total of 135 games received approvals, reaching the highest number for the year. The issuance of approvals reached a record high, indicating a positive trend in the domestic game industry for the year. Major companies with high-quality content IP products passed the approval process, setting a positive expectation for the gaming industry in the coming year. Recommended stocks to watch include: TENCENT (00700), NTES-S (09999), BILIBILI-W (09626), Zhejiang Jinke Tom Culture Industry (300459.SZ), 37 Interactive Entertainment Network Technology Group (002555.SZ), among others. Huajin Securities' main points are as follows: Event: In the afternoon of December 24th, the National Press and Publication Administration released the "December 2024 Domestic Network Game Approval Information" and "December 2024 Import Network Game Approval Information", with a total of 135 games receiving approvals, the highest for the year. Of these, 122 were domestic approvals and 13 were import approvals, with companies such as Tencent, NetEase, 37 Interactive Entertainment Network Technology Group, Kingnet Network, and Kemumu included. The record number of approvals issued at the end of the year, driven by high-quality content and IP, is empowering the healthy development of the gaming industry. Diverse distribution of approvals, domestic and international platforms driving the development of the gaming industry. This time, there were a total of 122 domestic approvals, categorized as follows: 120 under "Mobile", 33 under "Mobile-Casual Puzzle", 1 under "Client", and 1 under "VR Games". Eight games received approvals for both mobile and client platforms, while two received approvals for mobile, client, and game console platforms. In addition to domestic approvals, 13 import game approvals were issued this afternoon, with 11 being for mobile platforms, two of which received approvals for both mobile and client platforms, and two were only for client platforms. The diverse issuance of approvals across multiple platforms injects strong momentum into the gaming industry, enriching the supply side and expanding the domestic game ecosystem. Record-breaking number of approvals issued, driving the emergence of high-quality products driven by content and IP. A total of 135 games received approvals this time, including Tencent's "Monster Hunter: Traveler", NetEase's "Infinity", Youerha's "Red Alert: Honor", 37 Interactive Entertainment Network Technology Group's "Ancient Book Repairer" and "Fingertip Pixel City", Kemumu's "Survivor of the Seventh Era", Xinguangliumei's "Dark Shuttle", Lanfei Interactive's "Stack Blocks" and "Catch Big Goose", Kingnet Network's "Super Warrior" and "Ancient Dragon Chronicles" etc. Some well-known manufacturers gathered in December, with a concentration of game products driven by high-quality content and IP expectations for a positive outlook in the gaming industry next year. In 2024, the domestic game market saw record high revenue and user scale. According to the "2024 China Game Industry Report" released by China Audiovisual Association's Game Committee, in 2024, the domestic game market's actual sales revenue reached 325.783 billion yuan, a year-on-year increase of 7.53%, setting a new record. The number of game users reached 674 million, a year-on-year increase of 0.94%, also a historical high. Main drivers: an increase in new game products and the emergence of hit products; stable operation of many perennial products; prominent performance and strong growth momentum in small games; multi-platform distribution and cloud gaming bringing convenience to user consumption. Investment advice: The record high number of approvals issued indicates a positive trend for the domestic game industry for the year. Major companies with high-quality content IP products passing the approval process set a positive expectation for the gaming industry in the coming year. Recommended stocks to watch include: TENCENT, NTES-S, BILIBILI-W, Zhejiang Jinke Tom Culture Industry, 37 Interactive Entertainment Network Technology Group, Kingnet Network, Giant Network Group, G-bits Network Technology, Hangzhou Shunwang Technology, Ourpalm Co.,Ltd., Shenzhen Zqgame, Shanghai Film, KUAISHOU-W, Shanghai Yaoji Technology, among others. Risk Tips: Policy volatility, new game performance below expectations, macroeconomic volatility risks, etc.