Minsheng Securities: Xiaohongshu reaches the top of the App Store's overall free ranking list in multiple countries, focusing on three major directions for commercialization.

Minsheng Securities released a research report, suggesting to continue to grasp the gradual landing of AI+ applications, as well as real feedback from B-end and C-end users, and focus on the extension of business models. At the same time, it is recommended to pay attention to investment opportunities in state-owned enterprises with quality assets, understand the business expansion possibilities and value reassessment of state-owned enterprises in the new era. Currently, the media sector's industry prosperity continues to rise, and it is recommended to continue to lay out along the direction of new channels + new content. Main points of Minsheng Securities: TikTok ban takes effect, Xiaohongshu tops the charts of multiple countries' App Store free lists On January 13th, Xiaohongshu topped the US App Store social free list, and on the 14th, it topped the US App Store total free list. As of the 19th, Xiaohongshu ranked first in the free list of 64 countries worldwide. The recent rise in rankings is due to the following reasons: On January 10th, the US Supreme Court held a hearing on the TikTok ban, which took effect on the 19th, with enforcement responsibility borne by the Trump administration after inauguration on the 20th. After this hearing, many TikTok users shifted to the Xiaohongshu platform. The community tone of the two platforms "sharing a wonderful life" is similar, coupled with Xiaohongshu's global service, overseas users can directly register with their phone numbers, further lowering the platform usage threshold. On the 19th, TikTok ceased services in the US. Focus on the Xiaohongshu ecosystem According to Questmobile, Xiaohongshu's user base reached 214 million in October 2024, a year-on-year growth of 11.9%. With TikTok users migrating, combined with the overseas natural traffic and content supply brought about by Xiaohongshu going global, Xiaohongshu's content and user ecosystem is expected to further strengthen, thereby enhancing commercialization in advertising, e-commerce, and other areas. Previously, Xiaohongshu had clearly stated three main directions for commercialization in 2025: 1) Industry focus on expanding from consumer goods to multiple industries, with a focus on lifestyle services, etc; 2) Product optimization in the grass planting advertising, post-grass planting metrics, and direct delivery of customer business leads; 3) Further openness in the ecosystem, connecting more platforms, merchants, brands, and MCN institutions directly. It is recommended to focus on the ecological aspects benefiting from Xiaohongshu users breaking the circle and accelerating commercialization progress, such as Inmyshow Digital Technology, Inly Media Co., Ltd, Foshan Yowant Technology, HuiZhou Intelligence Technology Group, Tianyu Digital Technology, BlueFocus Intelligent Communications Group, Guangdong Insight Brand Marketing Group, Simei Media, Shanghai Yaoji Technology, and Guangdong Advertising Group, etc. Market review From January 13, 2025, to January 17, 2025, the Shanghai Composite Index rose by 2.31%, the Shenzhen Component Index rose by 3.73%, the Shanghai and Shenzhen 300 Index rose by 2.14%, and the ChiNext Index rose by 4.66%. According to the CITIC Industry Classification, in all industry sectors, media (CITIC) ranked first with a 7.43% increase. Industry news iQIYI will deepen cooperation with Hongguo Short Drama to create high-quality micro-short dramas; Xiaohongshu topped the free iPhone app rankings in 77 regions worldwide. Company dynamics Mango Excellent Media released a 2024 performance forecast; Perfect World released a 2024 performance forecast; Hengdian Entertainment released a 2024 performance forecast; Zhejiang Jinke Tom Culture Industry released a 2024 performance forecast; Wanda Film Holding released a 2024 performance forecast; Zhejiang Talent Television and Film received approval for a 400 million share issuance; China Film Co., Ltd. and Beijing Sky City Film and Television intend to cooperate. Risk warning: New movie launches perform below expectations, new technology development is below expectations, industry competition intensifies, new product research and development launches and performance below expectations.