Jianghai Securities: High Market Attention in the Gaming Industry, Continued Optimism in Sector Investment Opportunities.

Jianghai Securities released a research report stating that from January to August this year, the National Press and Publication Administration issued 1050 domestic network game licenses, a year-on-year increase of 23.53%. The normalization of the issuance of game licenses reflects the increasing support of regulatory policies for the development of the gaming industry. The gaming sector has a good cash flow, continuous increase in policy support, and continuous deepening of AI game development. Recently, the gaming sector has shown significant growth, with high market attention. The investment opportunities in the gaming sector are still promising, with a focus on Kingnet Network (002517.SZ), Giant Network Group (002558.SZ), G-bits Network Technology (603444.SH), TENCENT (00700), XD INC (02400), and others. Jianghai Securities' main points are as follows: From January to August 2025, the National Press and Publication Administration issued a total of 1050 domestic network game licenses, a year-on-year increase of 23.53%. On August 21, 2025, the National Press and Publication Administration issued the domestic and imported network game licenses for August 2025. A total of 173 licenses were issued this time, including 166 domestic network games and 7 imported network games. Specifically, key games with licenses this time include Bilibili's "Dudu Face Prank", Tencent's "Kaes Dreamland", Zhejiang Century Huatong Group's "Age of Discovery: Origin", and others. From January to August 2025, the National Press and Publication Administration issued a total of 8 batches, totaling 69 imported network game licenses; compared to the same period in 2024, a total of 4 batches, totaling 75 imported network game licenses were issued. From January to August 2025, a total of 1050 domestic network game licenses were issued by the National Press and Publication Administration, a year-on-year increase of 23.53%; compared to the same period in 2024, a total of 850 domestic network game licenses were issued by the National Press and Publication Administration. The normalization of the issuance of game licenses reflects the increasing support of regulatory policies for the development of the gaming industry. In July 2025, the Chinese gaming market maintained positive growth, with impressive performance in the client game market. According to Gamma Data, in July 2025, the size of the Chinese gaming market was 29.084 billion yuan, a year-on-year increase of 4.62%; mobile and client game markets were the main drivers of growth. In terms of specific products, the main sources of increment this month were new products and mature products, with summer-related operation activities being the main factor. In July 2025, the actual sales revenue of Chinese self-developed games in overseas markets was 1.693 billion US dollars, with a year-on-year increase of 6.76%; among them, mature products such as "Honkai: Star Sky Railway" and "LastWar: Survival" showed significant increments, while new products like "Legend of Swords" performed well. In July 2025, China Mobile Limited's gaming market size was 21.36 billion yuan, a year-on-year increase of 0.92%; in the mobile game market, some products in the new products and mature product categories performed well; in the new product category, "Delta Operation" benefited from season updates and collaborative activities, achieving a doubled growth in revenue for the month; In the mature product category, "King of Glory" launched multiple operation activities in the month to stimulate revenue growth. In July 2025, the size of the Chinese client game market reached 6.637 billion yuan, a year-on-year increase of 16.56%; the main sources of market increment came from mature products, new products, and cross-platform products; among them, new products such as "Douluo Continent: Soul Hunting World" and "Age of Discovery: Legend" contributed increments; new products like "Delta Operation" and long-term products like "Honkai: Star Sky Railway" achieved significant revenue growth through version updates, collaborative activities, etc.; In addition, the fourth anniversary celebration of "Eternal Hunt" and new gameplay launches, and the limited-time event "PUBG" Summer Carnival effectively boosted product revenue. In July, the overall prosperity of the gaming market remained stable, and leading companies continued to perform well with blockbuster products. Risk warning: Risks of changes in industry policies, risks of AI game development falling short of expectations, risks of target companies' performance falling short of expectations.