Zhongjin: IP-based companies in the media industry are accelerating their vertical expansion in the industrial chain. Key focus on Beijing Enlight Media (300251.SZ) and others.

CICC released a research report stating that since the beginning of 2025, with the strategic changes and business layout, the IP sector in the media industry has shown a significant acceleration in vertical extension of the industry chain. The domestic IP derivative market surpassed 100 billion yuan in 2024, with young consumers driving the continuous evolution of the "grain economy" due to their demand for emotional projection and instant gratification. Top IPs like "Nezha" have shown strong influence elasticity, coupled with improvements in the IP asset balance sheet and maturity of the supply chain, the industry is entering a period of capacity release. The bank maintains its profit forecast, rating, and target price for relevant covered companies unchanged, focusing on targets such as DAMAI ENT (01060), CHINA LIT (00772), Beijing Enlight Media (300251.SZ), and Shanghai Film (601595.SH). CICC's main points are as follows: What does the rapid development of the IP industry reflect? The key factors are structural changes in demand and maturity of the supply chain. Complexity is a prominent feature of current young consumer consumption demands, involving emotional expression and continuous iteration. From the results perspective, the "grain economy" is a manifestation of consumers' evolving search for emotional projection and "small pleasures" instant gratification. According to the prospectuses of Cayou and 52Toys, the scale of the domestic derivative market exceeded 100 billion yuan in 2024. Given the relative fluctuation of content monetization due to various factors, IPs are seeking to smooth performance volatility and focus on the top IPs like "Nezha" that are still highly favored by young consumers with great influence elasticity. In recent years, the balance sheet of media IPs has shown significant improvement, laying a foundation for external investment. Coupled with the increasingly mature supply chain of the IP industry, manufacturing advantages continue to penetrate the IP industry, leading the bank to believe that conditions are met for the release of IP derivative product capacity. In the long term, what are the evolution paths for IPs? Single top content - IP matrix platform - IP deep operators. IPs can be divided into IP content creators and IP operators, with the former having the ability to create top content and then develop an IP platform for IP matrix development, while the latter, based on the involvement depth in IP commercialization and industry chain layout, achieve revenue diversification and extend the value space of IPs. In recent years, IPs have significantly enhanced their awareness of multi-form development, made changes in their strategic architecture, and have mostly developed from IP content creators to IP operators through extensive authorization, self-operation, equity investment, and strategic cooperation. For self-owned IP development, companies leverage visual exposure, self-operation, and authorization to leverage industry chain capacity, such as CHINA LIT, Shanghai Film, and Beijing Enlight Media; while for agented IPs, companies promote localization or new product penetration through authorization, such as DAMAI ENT, among others. What are the future trends for IPs? Moving in the right direction: IP content providers are accelerating the construction of industrialized production capacity, and through capacity upgrades and technological innovation, the bank believes they are likely to achieve a dual leap in both content volume and quality in the future. Strengthening multi-dimensions of experimentation: The bank believes that building a networked value structure through "multiple income pillars + multiple regional markets" is crucial, with resource integration along the industry chain and product form iteration being important. IP operators are expected to cultivate IPs as core assets that can withstand economic cycles. Risks: Uncertainty in the IP lifecycle, policy and compliance risks, piracy risks, intensifying market competition.