Guosen Securities has released a research report suggesting attention to the potential improvement in the narrative logic of AI applications and the opportunity to grasp bottom opportunities in gaming and IP trendy toys. 1) The iteration speed of major companies' AI applications is accelerating in 2026, with OpenClaw leading the transition of AI applications from single-point tools to workflow agents; driven by new products, demand-side performance in gaming and IP trendy toys is favorable, maintaining a positive outlook on the industry prosperity of gaming and IP trendy toys as well as the industrial trend of AI applications. 2) AI Applications: The ecosystem for traffic and content services is being restructured, and advancements in multimodal technology are accelerating cost reduction and efficiency improvement in areas such as AI comics and games. Attention should be paid to the potential correction of negative logic in AI applications. 3) Focus on the sustainability of the new product cycle. Against a backdrop of low valuations and low crowding, the gaming sector possesses good value for medium-term allocation. A bottom-up approach should be taken to grasp product cycles and performance, as well as related targets with AI product implementations. The main views of Guosen Securities are as follows:
Performance Review for 2025: Overall Profitability Rebounds, Gaming Sector Stands Out 1) In 2025, listed companies in the A-share media sector achieved total operating revenue of 533.8 billion yuan and net profit attributable to shareholders of 27.1 billion yuan, representing year-on-year growth of 4.57% and 45.84% respectively. Revenue showed a recovery compared to 2024, with net profit significantly improved. The main reasons include the low base effect from the same period last year and a significant reduction in expense items (such as management expense ratio/income tax, etc.). 2) The gross profit margin of the media sector remained stable with a slight increase, rising by 1.31 percentage points year-on-year to 32.44%. The net profit margin increased by 1.58 percentage points year-on-year to 5.2%. The management expense ratio was 7.71%, down 0.42 percentage points from the same period last year. The sales expense ratio increased slightly by 0.82 percentage points year-on-year to 13.59%. 3) Looking at sub-sectors, the gaming industry achieved a net profit attributable to shareholders of 13.7 billion yuan, a year-on-year increase of 222.15%, with its industry share rising to 41%, surpassing the publishing industry to become the largest profit-generating sector. Overall, all sub-sectors except digital media and television broadcasting achieved positive growth.
Q1 2026 Revenue Shows Slight Growth 1) In Q1 2026, listed companies in the A-share media sector achieved total operating revenue of 130.4 billion yuan and net profit attributable to shareholders of 11 billion yuan, representing year-on-year growth of 2.94% and -1.31% respectively. Revenue maintained a mild upward trend after a continuous decline since Q3 2024. The slight decline in profit was mainly constrained by the high base in the film and television industry from Q1 last year. 2) The gross profit margin remained stable with a slight increase, rising by 0.12 percentage points year-on-year to 33.48%. The net profit margin decreased slightly by 0.33 percentage points year-on-year to 8.54%. The management expense ratio remained stable at 6.59%, essentially consistent with the previous year. The sales expense ratio increased by 1.93 percentage points year-on-year to 15.03%. 3) In terms of growth rate, due to the high performance base brought by a major film release in Q1 last year, the net profit attributable to shareholders in the film, television, and cinema line industry fell by 95.12% year-on-year. The gaming industry continued its high growth momentum, with Q1 growth of 54.32% year-on-year.
Sub-Industry Performance: Gaming Industry Maintains High Growth in Q1; Focus on Product Cycle Performance and Potential Valuation Repair 1) In Q1 2026, listed companies in the A-share media gaming sector achieved total operating revenue of 32.2 billion yuan and net profit attributable to shareholders of 5.4 billion yuan, representing year-on-year growth of 20.34% and 54.32% respectively. The growth rate of net profit attributable to shareholders turned positive from Q1 2025 and showed an accelerating upward trend. Revenue also continued its upward inflection point. This is mainly attributed to the excellent performance of new products from some listed companies. In terms of trend, the new product cycle in gaming remains strong, and high industry prosperity is expected to continue in 2026. 2) After continuous adjustments, valuations in 2026 possess a favorable safety margin. The current dynamic PE valuation, historical percentile of trading crowding, and absolute levels are all in a bottom range. The core product flow performance of listed companies is good, and fundamentals are solid, providing a safety margin on the downside and noteworthy upside potential.
Risk Warnings: Performance below expectations, technological progress below expectations, regulatory policy risks, etc.
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