Zhonghang Securities: The media industry will evolve along the dual main lines of "IP assetization" and "AI agentization" by 2026.

Zhonghang Securities released a research report stating that in retrospect, the media sector showed strong resilience in 2025. The Shenwan Media Index rose 27.17% for the full year, outperforming the Shanghai and Shenzhen 300 Index. In the first three quarters of 2025, revenue reached a historical high of 387.48 billion yuan, with a significant year-on-year turnaround in net profit attributable to the mother (37.12%). The driving factors have shifted from simply mirroring the US stock market to the landing of self-controlled applications. Domestic models such as DeepSeek have driven the frequent emergence of popular applications and the commercialization of business models through cost reduction. The bank believes that in 2026, the media industry will evolve along the dual main themes of "IP assetization" and "AI Agentization", with consumer logic transitioning from functionality to emotional value, and AI roles transitioning from auxiliary tools to business leadership. Key points from Zhonghang Securities include: Overall market performance of the media industry: Event-driven market trends and valuation differentiation From the beginning of 2025 to March 2026, the media sector saw a cumulative increase of 48.29%, showing a three-stage event-driven market trend: starting with the breakthrough of DeepSeek technology, following the upward trend of the market, and a high retracement under the catalysis of the GEO marketing model and Seedance video model within the sector. Significant internal structural differentiation was evident, with Game II leading the way and video media and educational publishing showing weak performance. The current PE ratio of the sector is 27 times, at 67.8% of historical percentile since 2020, with significant valuation differences within sub-sectors, with digital media and film production having high valuations, while the publishing sector maintains a stable undervaluation. Segmented tracks: Recovery of supply and AI empowerment resonance 1) In the gaming sector, both supply and demand are strong, with a record high in the issuance of game approvals and AI technologies effectively reducing costs and improving efficiency, leading to the frequent launch of interactive new products. 2) The film industry relies on blockbusters like "Ne Zha 2" to achieve a box office recovery, transitioning towards comprehensive IP operations, with AI animation becoming a new growth point. 3) The publishing sector, with educational aids and tax incentives, maintains a defensive position, transitioning towards content copyright management. 4) Advertising marketing benefits from AI-driven efficiency improvements, the commercialization of GEO engine, and international marketing becoming a growth focus. Core trends: AI Agent leads industry-wide transformation in all scenes AI has upgraded from an auxiliary tool to AI Agent, utilizing a dual-curve model of "empowering creativity with large models and precise execution with small models," taking over all core scenes of marketing, film, e-commerce, and AI toys. In marketing, the switch from SEO to GEO has AI become a traffic super-intermediary, reconstructing brand exposure and conversion logic. In film, multiple Agents cooperating achieve automation from script to video production, AI animation capacity is exponentially released, driving the integrated development of IP. In e-commerce, AI penetrates the entire chain from traffic acquisition to shopping guide conversion and cross-border operations, reshaping consumer experience and international competitiveness. In the AI toy sector, products transition from educational tools to emotional companions, experiencing rapid growth in the global market, with IP licensing and end-to-end technology serving as core barriers, gradually transitioning towards a results-based payment (RaaS) business model. In 2026, the media sector will shift from valuation recovery to true profit-driven growth 1) Marketing End (Algorithm Leading): Companies that have taken the lead in setting up GEO (Generative Engine Optimization) and global programmatic advertising, with the ability to validate RaaS models, are recommended to focus on Merit Interactive, BlueFocus Intelligent Communications Group, Easy Click Worldwide Network Technology, and Beijing Zhidemai Technology. 2) Content End (IP Assets): Companies with a massive reserve of copyrights that can be quickly transformed into AI animation short films, with the ability to operate IP in various forms, are recommended to focus on Beijing Enlight Media, Zhejiang Huace Film & TV, COL Group Co., Ltd., and China Publishing & Media Holdings. 3) E-commerce: AI e-commerce is still in its initial stage of industry empowerment, with the deepening commercialization and cost structure improvement, it is expected to continue releasing a dual value of "efficiency enhancement and valuation elasticity," recommended to focus on Focus Technology, Beijing Zhidemai Technology, Saivetsu, and Xiamen Jihong Package Technology. 4) QA Toys: Emotional companionship and mental drive promote global penetration, with IP and end-to-end model driving growth, recommended to focus on Kingnet Network, Alpha Group, and CHINA LIT. Risk Warning Risks of economic recovery falling short of expectations, consumer confidence falling short of expectations, industry regulatory risks, risks of policy tightening, risks of technology development falling short of expectations, risks of content ecosystem construction not meeting expectations, risks of underperforming monetization, risks of speculative hype, and market competition risks.