GTHT: AI Applications Accelerate as Entertainment Industry Cycle Turns Upward

Stock News11:16

Media and entertainment sectors are at a pivotal juncture with accelerating AI adoption and an upward industry cycle, according to a research report by Guotai Haitong Securities. The sector index performed well in 2025 and is expected to maintain strength in 2026 driven by product innovation and policy tailwinds. The firm recommends focusing on gaming, film/TV, AI applications, and IP sectors. Key highlights include:

1. **Sector Performance**: The media index surged over 40% at its peak in 2025, with gaming leading gains. From January 13 to September 25, the index rebounded more than 50% from its low, while the gaming sub-index soared 98.45%. Box office-driven film sector rose nearly 50%.

2. **Earnings Growth**: In the first three quarters of 2025, the media industry reported stable revenue with net profit up nearly 40% YoY. Gaming stood out with 90% profit growth, becoming the primary growth driver.

3. **AI Momentum**: China's State Council issued guidelines in August 2025 to advance "AI+" initiatives, elevating AI to national strategic importance. This mirrors the earlier "Internet+" boom, promising new ecosystems and business models.

4. **Entertainment Revival**: Domestic IPs like "Ne Zha" and "Black Myth: Wukong" gained global traction. Hit titles such as "Supernatural Task Force," "Endless Winter," and "Zootopia 2" sustained strong engagement. New broadcasting policies in August further stimulated content innovation.

5. **2026 Outlook**: High-revenue games launched in 2025 may sustain momentum, with anticipated releases like "Honor of Kings World" and "Name of Generals" boosting the market. Post-regulatory adjustments (e.g., loosened drama quotas and ad rules), film/TV sectors may see policy-driven recovery.

**Risks**: Market competition, regulatory changes, technological delays, and product underperformance.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment