Cathay Pacific Haitong: AI applications accelerate development and superimpose an upward cycle on the performance of gaming, film and television sectors

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the media industry is at a critical point in the accelerated development of AI applications and the upward cycle of the entertainment industry. The 2025 index performed well, and is expected to continue to be strong in 2026 due to the resonance of products and policies. In terms of AI applications, the “State Council's Opinions on Further Implementing the “Artificial Intelligence +” Action was promulgated in August 2025, indicating that AI has risen to a national strategic level. “Artificial Intelligence +” is expected to continue the “Internet +” boom, creating a new ecosystem, new scenarios, and new businesses. Looking at the entertainment industry, local IPs such as “Nana” and “Black Myth: Goku” are not only loved by domestic consumers, but are also trending globally.

Cathay Pacific Haitong's main views are as follows:

The highest increase in the media index during the year was over 40%, with the gaming sector leading the way.

The date of the lowest point of the Media Index from January to November 2025 was January 13, and the highest point was on September 25. The biggest drop in the range was 6.42%, and the biggest increase was 42.24%, and the increase from the lowest point to the highest point was more than 50%. Among the secondary industries, the game index performed the brightest, with the biggest increase of 98.45%. In addition, the film and television cinema index benefited from the 2025 Spring Festival program catalyzed by the 2025 Spring Festival program, with a maximum increase of nearly 50%. In terms of performance, the total revenue of the media industry remained steady in the first three quarters of 2025, and the total net profit to mother increased by nearly 40% year on year. Among them, the game sector's total net profit to mother increased by nearly 90% year on year in the first three quarters, which is the main driving force for the growth of the entire industry.

A golden period of rapid development of AI applications and an upward cycle in the entertainment industry.

In terms of AI applications, the “State Council's Opinions on Further Implementing the “Artificial Intelligence +” Action was promulgated in August 2025, indicating that AI has risen to a national strategic level. “Artificial Intelligence +” is expected to continue the “Internet +” boom, creating a new ecosystem, new scenarios, and new businesses. Looking at the entertainment industry, local IPs such as “Nana” and “Black Myth: Goku” are not only loved by domestic consumers, but are also trending globally. However, forms of entertainment content born during the Internet period, such as games, movies, and TV, have also shown great vitality. Many popular entertainment content such as “Operation Supernatural”, “Endless Winter”, “Nacha's Monster Boy Nights the Sea”, and “Zootopia 2” will still shine brightly in 2025, attracting many players and viewers to participate deeply. Meanwhile, the State Administration of Radio and Television introduced a new policy in August to focus on promoting innovation in the entertainment industry and injecting new life and vitality into the content.

Pay attention to the sales performance of popular games and the implementation of the new radio and television policy.

After several new games were launched in 2025, they showed high traffic and high throughput, boosting the performance of related companies. The bank believes that similar trends are expected to continue in 2026. At the same time, new games such as “King's Glory World”, “Alien Ring”, and “Kill a Master” are ready to launch, and the game market is still worth looking forward to in the new year. However, after experiencing a “cold winter” for film and television for several years, with the implementation of the New Deal, the gradual cancellation or adjustment of existing regulatory policies, including the “ratio of costume dramas,” “two stars for one drama,” the “maximum limit of 40 episodes,” and “prohibition of advertising in the middle,” the entertainment industry, including film and television, is expected to see reversals at the policy and performance levels one after another.

Based on the development process of AI applications and the upward cycle of the culture and entertainment sector, we focus on recommending sectors such as games, film and television, AI applications, and IP.

Risk warning: market competition risk, industry and regulatory policy risk, technology development falling short of expectations, product performance falling short of expectations.