CITIC SEC: Game license issuance maintains stable pace, focusing on top companies with strong research and development capabilities and global distribution.

CITIC SEC released a research report stating that overall, both leading companies and small and medium-sized companies continue to advance their product reserves, conducting long-term operation of intellectual property. The industry's mid-term outlook is stable, and it is recommended to pay attention to leading companies with strong R&D capabilities and global positioning. It is optimistic about the continuous relaxation of the issuance of online game licenses, and believes that the new product cycle in the gaming sector under the trends of AI and IP commercialization will bring about performance improvement. It is recommended to select targets from three dimensions: 1) High-performance and high-dividend targets: focus on high-quality gaming companies with stable fundamentals and dividend capabilities; 2) New technologies and consumer trends: AI-enabled game development and operational efficiency improvement, exploration of new interactive modes in 2C applications, and focus on companies with technological accumulation and product innovation capabilities; 3) High-quality content reserves under a relaxed regulatory environment: stable release of game licenses will help promote the launch of new products, and companies with content reserves and product cycle advantages are recommended. CITIC SEC's main points are as follows: The issuance of licenses maintains a stable pace, and the supply side continues to normalize. The National Press and Publication Administration announced the approval information for online games in March. This batch issued a total of 133 licenses, including 130 domestic online games and 3 imported online games. In Q1 2026, a total of 467 game licenses were issued, including 453 domestic licenses and 14 imported licenses. The monthly issuance has maintained above 100 licenses, and the supply side has continued to normalize. Leading manufacturers have rich product reserves, and Tencent's "Every Little Person's Country" attracts attention. In terms of key products, domestic online game licenses include: Tencent's "Every Little Person's Country", 37 Interactive Entertainment Network Technology Group's "Little Helmet Adventure", Kingnet Network's "Chuanshi Quyingchuan", Rastar Group's "Joy of Years: Southern Qing Tycoon", Youka Network's "Town Soul Street King Return", Poko Technology's "Master Please Come Out", Lanfei Interactive Entertainment's "Big Goose Farm", Zhongqingbao's "My Hero: Mo Shadow City" "Endless Defense" "Endless Evolution" "Patrolling Battle Machine", Wanhxinbuzhi's "Jiuxiao Lingxu" etc.; among them, Tencent's "Every Little Person's Country" is a life simulation product, and the current number of reservations has exceeded 2.1 million. Imported online games include: Xiamen Kuan Entertainment's "Duzhen Knight", Shanghai Qingyu's "Post-Disaster Company", Nanjing Chenqu's "Shenqi: Struggle". Improved supply stability, optimizing structure in parallel. From a structural perspective, mobile online games remain the absolute main force, with 72 "mobile" games and 55 "mobile-leisure puzzle" games in this batch of domestic games, accounting for over 97%; there are only 2 client-side online games, and one VR product has been approved, showing that the industry is still exploring multiple platforms and new forms (such as VR). Overall, the pace of license issuance is stable and the structure is clear, ensuring the continuity of industry product supply on the one hand, strengthening the predictability of manufacturer scheduling and liquidity release; on the other hand, the proportion of leisure and light products is increasing, combined with leading manufacturers' continued layout of medium-heavy and IP products, the industry presents a diversified supply pattern. It is recommended to continue to focus on leading companies with rich product reserves, global distribution, and outstanding long-term operational capabilities. Risk factors: Product launches are lower than expected; policy regulation becomes stricter; industry competition intensifies; acquisition costs increase.