Founder: CHINA RUYI (00136) is expected to fully benefit from the reshaping of content production, distribution and other processes by AI. First giving a "recommended" rating.

The Founder released a research report, covering CHINA RUYI (00136) for the first time, giving it a "buy" rating. It is expected that the company will achieve adjusted net profits of 21.57/24.47/28.50 billion yuan respectively in 2025-2027, corresponding to PEs of 19/16/14 times. Considering CHINA RUYI's growth momentum, clear development path behind the growth, and investment support; and as a new leader in film and television, it is expected to fully benefit from the reshaping of the AI wave in content production, distribution, and other areas. Against the backdrop of the thorough clearance of industries and the reshaping of various industries by AI in 2025, the bank predicts that the film and television sector, as a classic content industry, will establish a new pattern and create new leaders in the development process. In terms of film content, the company has the ability to deeply explore and create high-quality content; in production and distribution, as well as diversifying content layouts, the company has a large reserve. In terms of television drama content, the company's outstanding ability in whole process production, focusing on high-quality IP development and high-quality content production, actively cooperates with major domestic video platforms, and expands overseas markets at the same time. Pumpkin Films, as a long video platform, has always adhered to "empowering content distribution with technology"; the company values the penetration of AI technology in content creation, user services, and channel operations, driving the differentiation competitiveness of streaming media business with technological innovation, aiming to consolidate and improve its industry position more smoothly. The company's game business maintains high-level growth strategies, including: 1) refined research and development operations; 2) deepening the integration of film and games; 3) commercialization of IP operations. Actively expanding into sports, MMORPG, rhythm dance, and other fields; 4) Enhancing research and development efficiency with AI empowerment. In the process of becoming a new leader in the industry, investment and mergers and acquisitions have become important support for the company; the company's investment and M&A focus on core areas: 1) Investment and acquisition of Wanda Film Holding, showing strong strategic synergy. After the investment is completed, the company achieves full process integration from content creation, production to end projection; 2) Strategic investment in 52TOYS, laying out IP derivative business. 52TOYS has rich proprietary IP resources and has established cooperation and authorization agreements with many internationally renowned IPs; 3) Launched the acquisition of 30% stake in Kuaiqian, deepening the strategic layout of "culture + technology + finance".