A research report indicates that the media sector's overall performance improved in 2025, with varying results across different segments. The first quarter of 2026 saw particularly strong results from the gaming and advertising & marketing sectors. Looking ahead, a recovery in content supply, deeper integration of AI and other technologies, supportive policies, and an expected uptick in consumer spending are all anticipated to help restore the industry's vitality. Investors are advised to focus on companies with standout performance in advertising & marketing and gaming, as well as those investing in digital assets and applying AIGC technologies. The main points from the report are as follows:
Overall Sector Performance
For the full year 2025, the media industry's total operating revenue increased significantly by 5.32% year-on-year to RMB 535.527 billion, reaching a new high in recent years. Net profit attributable to shareholders showed a clear rebound, rising 46.45% to RMB 26.973 billion, indicating an overall positive performance. The gross profit margin remained stable, edging up 1.30 percentage points to 32.38%. On the expense side, management and financial expense ratios were relatively stable, while the sales expense ratio continued to rise to 13.55%. The net profit margin increased by 1.54 percentage points year-on-year to 5.16%.
On a year-on-year basis for the first quarter of 2026, the sector's total operating revenue grew by 3.50% to RMB 130.398 billion. Net profit attributable to shareholders saw a slight decrease of 0.96% to RMB 10.951 billion. Sequentially, Q1 2026 revenue declined by 11.31% quarter-on-quarter, while net profit turned from loss to profit, aligning with cyclical trends.
Gaming Sector
(1) 2025 saw a significant increase in revenue and a substantial rebound in net profit. The gaming segment achieved revenue of RMB 114.919 billion, a 23.00% year-on-year increase, continuing its growth momentum. Net profit attributable to shareholders rebounded sharply, surging 222.16% to RMB 13.684 billion. The profit increase was primarily driven by leading companies like Century Huatong and Perfect World, which continued to focus on core product operations and in-house IP iteration, actively expanded overseas, and benefited from revenue surges due to hit games and new version updates. Additionally, companies such as Bingchuan Network significantly reduced sales and management expenses through cost-cutting and efficiency measures, enhancing the segment's overall profitability in 2025. The gross and net profit margins rose by 2.12 and 7.60 percentage points to 68.52% and 11.83%, respectively.
(2) In Q1 2026, both operating revenue and net profit grew substantially, with Century Huatong performing notably well. The gaming segment's revenue reached RMB 32.155 billion, up 20.34% year-on-year. Net profit attributable to shareholders increased by 54.32% to RMB 5.374 billion. Century Huatong's hit products demonstrated strong revenue performance, contributing significantly to the segment's Q1 2026 growth. In terms of profitability, the gross margin rose 3.74 percentage points to 70.76%, and the net margin recovered by 3.77 percentage points to 16.80%.
Film & Cinema Sector
(1) Revenue recovered somewhat in 2025, and net losses narrowed significantly. The film market performed relatively well in 2025. The film and cinema segment achieved revenue of RMB 39.282 billion, a 9.93% year-on-year increase. The net loss attributable to shareholders narrowed significantly by 58.05% to -RMB 1.054 billion. A key driver was the outstanding box office performance of Enlight Media's hit film "Ne Zha: The Devil Boy Comes" in Q1 2025, which significantly boosted the company's results and helped pull the segment upward. Gross and net profit margins increased by 3.48 and 4.67 percentage points to 24.59% and -2.83%, respectively.
(2) Both operating revenue and net profit declined sharply in Q1 2026. Revenue for the film and cinema segment contracted significantly, falling 43.42% year-on-year to RMB 7.986 billion. Net profit attributable to shareholders plunged 95.13% to RMB 115 million. Over 80% of the companies in this sub-sector saw revenue decline. Profitability weakened, with the gross margin dropping 9.67 percentage points to 23.51% and the net margin also falling, down 15.44 percentage points year-on-year to 1.52%.
Digital Media Sector
(1) Full-year 2025 revenue saw a slight recovery, while net profit declined. The digital media segment generated revenue of RMB 29.392 billion for the full year 2025, up 2.73% year-on-year. Net profit attributable to shareholders was RMB 1.589 billion, down 7.48%. Profitability metrics softened, with gross and net profit margins falling by 2.31 and 0.46 percentage points to 33.58% and 5.55%, respectively.
(2) Q1 2026 revenue grew modestly, while net profit increased significantly. The digital media segment's revenue reached RMB 6.376 billion in Q1 2026, a 6.28% year-on-year increase. Net profit attributable to shareholders rose 20.59% to RMB 448 million. The gross margin fell 0.87 percentage points year-on-year to 32.26%, while the net margin increased by 0.71 percentage points to 6.93%.
Advertising & Marketing Sector
(1) Full-year 2025 revenue grew, but net profit declined significantly. The advertising and marketing segment achieved revenue of RMB 175.318 billion in 2025, up 7.62% year-on-year. Net profit attributable to shareholders fell 55.55% to RMB 1.577 billion. The gross margin decreased by 0.43 percentage points to 11.52%, and the net margin dropped 1.21 percentage points year-on-year to 0.92%.
(2) Both operating revenue and net profit rebounded positively in Q1 2026, with BlueFocus performing notably well. The advertising and marketing segment's revenue reached RMB 44.882 billion in Q1 2026, a 17.08% year-on-year increase. Net profit attributable to shareholders rose 50.97% to RMB 2.228 billion. This improvement was largely driven by BlueFocus's strong performance, with its revenue increasing by RMB 4.549 billion and net profit growing by RMB 31 million year-on-year. The gross margin fell 0.92 percentage points year-on-year to 10.86%, while the net margin increased by 1.20 percentage points to 5.05%.
Broadcasting & Television Sector
(1) 2025 revenue shifted from decline to growth, but net losses widened further. The broadcasting and television segment generated revenue of RMB 45.534 billion in 2025, up 2.37% year-on-year. However, the net loss attributable to shareholders widened further to -RMB 2.083 billion. Key companies like BGR and Guizhou Broadcasting saw traditional business income shrink while new ventures failed to provide sufficient support. Increased credit impairment losses and higher costs also contributed to the expanded losses exceeding RMB 2 billion for the segment in 2025. Gross and net profit margins fell by 1.07 and 1.06 percentage points to 22.90% and -3.84%, respectively.
(2) Q1 2026 operating revenue grew, but the segment continued to report net losses. Revenue for the broadcasting and television segment reached RMB 10.205 billion in Q1 2026, a 4.22% year-on-year increase. Net profit attributable to shareholders remained in negative territory at -RMB 145 million, though the rate of decline slowed. The gross margin fell 1.85 percentage points to 22.14%, and the net margin decreased by 0.09 percentage points to -0.85%.
Publishing Sector
(1) Full-year 2025 revenue declined, but net profit recovered. The publishing segment's revenue was RMB 131.082 billion in 2025, down 8.55% year-on-year. Net profit attributable to shareholders increased by 3.47% to RMB 13.259 billion, with most companies in the segment posting favorable net profit performance. The gross margin remained stable, inching up 0.42 percentage points to 33.98%, while the net margin rose 1.21 percentage points to 10.40%.
(2) Both operating revenue and net profit fell in Q1 2026. The publishing segment's revenue was RMB 28.793 billion in Q1 2026, down 7.19% year-on-year. Net profit attributable to shareholders decreased by 15.01% to RMB 2.930 billion. The gross margin increased slightly by 0.19 percentage points year-on-year to 34.15%, while the net margin fell by 0.91 percentage points to 10.38%.
Risk Factors
Key risks include changes in the policy environment, a slower-than-expected consumer recovery, intensifying market competition, slower-than-anticipated adoption of innovative technologies, and risks related to goodwill impairment.
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