: The overall performance of the media industry is expected to show significant growth by 2025. The performance of the gaming and advertising marketing sectors in Q1 2026 has seen a substantial increase.

releases research report saying that the overall performance of the media sector is expected to improve by 2025, with some differentiation in sector performance. In Q1 2026, the gaming and advertising marketing sectors are expected to perform well. In the medium to long term, it is expected that with the gradual recovery of content supply, the continuous deepening of technologies such as AI, combined with policy support and expectations of consumer recovery, the industry's business climate is expected to improve. It is recommended to focus on companies with outstanding performance in the advertising marketing and gaming sectors, as well as companies that are involved in digital assets and AIGC-related technologies. Key Points from Wanlian Securities: Industry Core Views Significant growth in revenue and net profit attributable to mother in 2025, Q1 2026 revenue increased year-on-year, while net profit attributable to mother remained stable. In terms of revenue, the media industry achieved a significant year-on-year increase in operating income in 2025 to 535.27 billion yuan, setting a new high in recent years. Net profit attributable to mother also increased significantly, up 46.45% year-on-year to 26.973 billion yuan, indicating an overall improvement in performance. The gross profit margin remained stable, increasing slightly by 1.30 percentage points year-on-year to 32.38%; in terms of expenses, management and financial expense rates were relatively stable, while the selling expense rate continued to rise to 13.55%, and the net profit margin increased by 1.54 percentage points year-on-year to 5.16%. Looking at the quarterly performance, in Q1 2026, the overall operating income of the media industry increased by 3.50% year-on-year to 130.398 billion yuan. Net profit attributable to mother decreased slightly by 0.96% year-on-year to 10.951 billion yuan. Quarter-on-quarter, in Q1 2026, the overall operating income of the media industry decreased by 11.31% compared to the previous quarter, but net profit attributable to mother turned from loss to profit, following the cyclic trend. Gaming (1) Significant revenue growth in 2025, with a substantial rebound in net profit attributable to mother. The gaming sector achieved revenue of 114.919 billion yuan in 2025, an increase of 23.00% year-on-year, with a continued expansion in growth momentum. Net profit attributable to mother rebounded significantly, increasing by 222.16% year-on-year to 13.684 billion yuan. The increase in profitability was mainly due to leading companies in the sector such as Zhejiang Century Huatong Group and Perfect World deepening their core product operations and self-developed IP iterations in 2025, actively expanding into international markets, as well as the contribution of popular games and new game updates to a significant increase in revenue. Companies like Shenzhen Bingchuan Network also significantly reduced selling expenses and management expenses through cost reduction strategies, enhancing the overall profitability of the gaming sector in 2025, with gross profit margin and net profit margin increasing by 2.12 and 7.60 percentage points to 68.52% and 11.83% respectively. (2) In Q1 2026, operating income and net profit attributable to mother increased significantly, with Zhejiang Century Huatong Group performing well. In Q1 2026, the gaming sector achieved revenue of 32.155 billion yuan, an increase of 20.34% year-on-year. Net profit attributable to mother increased by 54.32% year-on-year to 5.374 billion yuan, with Zhejiang Century Huatong Group's popular products driving the growth in the gaming sector's performance for Q1 2026. In terms of profitability, gross profit margin increased by 3.74 percentage points to 70.76%, while net profit margin increased by 3.77 percentage points to 16.80%. (Film and Cinema Line) I'm running out of space so can't include more.