CASC Securities: Steady Growth in Edition Number, AI Empowerment and Resonance with Overseas Expansion - Structural Recovery of the Gaming Industry.

China Aviation Securities released a research report stating that the pace of game approvals is stable and accelerating, and the resonance of AI and going global is driving growth. By 2025, the gaming industry will enter a new development stage of "fine content + industrialized AI + systematic going global". Short-term policies are stable, mid-term AI implementation improves efficiency, and long-term globalization dividends open up opportunities. The current sector valuation still has cost performance. Key points from China Aviation Securities: - The stable pace of game approvals continues, and the regulatory environment of the industry continues to improve. - On May 21, the National Press and Publication Administration announced the approval of 130 domestic games and 14 imported games, covering key products from companies such as Tencent's "Mystery Blade", Perfect World's "Changing World", and 37 Interactive Entertainment Network Technology Group's "Really Good Vegetables", sending a friendly policy signal. By May 2025, a total of 654 domestic approvals and 44 imported approvals have been issued, a significant increase compared to the previous year, improving the supply side of the industry and accelerating the release of high-quality content, driving sector sentiment to warm up. In terms of approval structure, multiple products have been approved for both mobile + client/end/Gaming console versions, reflecting the supply direction of "cross-platform integration + boutique products". - Gaming companies maintain steady growth in performance, and the sector valuation center is expected to recover. - According to data released by the Game Publishing Committee (GPC) of China Audio-Visual and Digital Publishing Association, the actual sales revenue of the Chinese game market in the first quarter of 2025 was 85.704 billion yuan, a year-on-year increase of 17.99%. In Q1 of 25, Century Huatong's revenue increased by +91% year-on-year to 8.145 billion yuan, reaching a record high; Yoozoo Interactive achieved a net profit of 24.7 million yuan attributable to the parent company, a year-on-year increase of 43.7%; driven by the successful launch of "The World of Zu Xian", Perfect World's revenue increased by +52% year-on-year. According to Wind's consensus forecast, the dynamic PE ratio of top A-share gaming companies in 2025 is concentrated in the range of 11-17 times, still at the historical valuation bottom, coupled with the continuous high dividend payout of companies such as 37 Interactive Entertainment Network Technology Group, G-bits Network Technology, and Shanghai Yaoji Technology (with dividend yields reaching 4%-6%), offering a combination of "growth + dividend" and cost performance. Risk warning: Risks of macro policy changes, uncertainties in the international environment, and risks of consumer consumption confidence falling short of expectations.